Effect Of Digital Disruption On Otto: An Essay.

You are to write a report outlining the changes that have occurred in a business due to digital innovation using a work centred analysis approach. Two matrices will be required,

1) a work centred analysis (WCA) of a company of your choosing prior to a digital disruption event. This will involve a retrospective analysis and any assumptions, due to a lack of relevant information should be included. The second matrix will be another WCA of the same company after the digital disruption event. In the report you will need to provide an assessment of the effect of a digital disruption event, provide recommendations on how to handle the event and provide an implementation plan for your recommendations. This is an individual assessment and needs to be submitted electronically through SafeAssign.

• Identify the salient points associated with a digital disruption event in a company of your choosing.

• Provide recommendations and an implementation plan to help the company cope with the event 

Introduction to Otto

The purpose of this report is to study the effect of digital disruption event on Otto with the help of two work centred analysis approach where the first analysis would discuss about the status of Otto before digital disruption and the second analysis would discuss about the effects of digital disruption on Otto. This report elaborates on the case study of Otto focussing on the different challenges and goals related to the event of digital disruption. Some recommendations are provided to the company that would help them to handle digital disruption. The plans required for the implementation of the previously mentioned recommendations are also provided.

Otto is an autonomous trucks manufacturing company. Uber acquired the company in August 2017 to start a new line of freight services that will potentially replace the existing system (Steinmetz 2017). Majority of the individuals who are able to earn a decent wage by working in this industry are non-college educated. This company has been chosen particularly for the study of digital disruption as with the advent of autonomous trucks, there will be vast unemployment of truck drivers.

Automated Driving Technology provides a huge number of advantages for the logistics and the freight industry (American Transportation Research Institute. 2017). The major goals behind creating autonomous trucks are as follows:

• A huge portion of the operational costs of this industry is labour costs. It amounts to around 40-75% of the total costs (Knight 2017). The current law structure asserts that a human must be present in the truck to handle or intervene in extreme situations while the autonomous technology is being used. However, the intended goal is to phase out the use of drivers.
• The present laws permits the drivers to drive only for eleven hours a day followed by a eight hour long break. This law helps to prevent accidents by keeping the drivers in sound mental and physical state. On the other hand, autonomous trucks will be able to operate for almost an entire duration of twenty-four hours, which would allow a company to achieve revenues as high as double the previous amount.
• High shipping costs add up to the overall cost of a product that is being transported (Cohen 2017). Low shipping costs mean the price of a product to a consumer could be reduced. This would mean that companies using the autonomous trucks would be able to provide competitive price quotations.
• The application of this technology would also help in reducing the number of accidents to a great extent that involves trucks used for commercial purposes. In the United States, about 300,000 trailers crash that creates approximately 4000 deaths every year (Trucking.org 2017). Most of these crashes are a result of errors originating from the drivers. The automated trucks are programmed keeping the safety of the roads in mind. These trucks would never over speed, always stick to their lanes and would never change their lanes abruptly. Removing the human factor from the trucks would thus would definitely help in reducing the accidents (Chafkin 2017).
• Highways have very low pedestrian risks and very little or no traffic lights. Thus, the implementation of autonomous trucks on highways is ideal, as there are little to no risks.  

Autonomous technology driven trucks would be very helpful for the future times to come but there are different limitations that might hinder the application of this technology in the future.

• A machine by itself would never be able to take critical decisions in extreme scenarios. Such scenarios might include a sudden loss of control of the truck due to any malfunction. Thus, a human will always be required who can assess the extreme situations and take decisions accordingly.
• In the US, trucks that are driven by almost four million drivers transport approximately seventy percent of all the freight (Trucking.org 2017). Using automated trucks would render all of these truck drivers jobless as the ultimate goal Otto is to use this technology to replace the drivers (Wadhwa 2017). None of these people can be put out of their jobs, as the company will face resistance from both internal and external sources. Human Rights and the Labour Unions would be at the frontlines defending the jobs of the truck drivers. Most of the truck drivers have never attended college and thus it will be very difficult for them to find jobs in other positions. There are no direct labour laws that would assist the truck drivers in fighting the unemployment wave that would strike them once the autonomous trucks are put into service (Dubofsky and McCartin 2017).

Some recommendations could be suggested to tackle the above-mentioned problems.

• Autonomous trucks can be fitted with remote manual driving options where a person can connect to the truck remotely and drive. This would greatly benefit for cases and scenarios where human judgement is needed for driving.
• A proactive team supported by a fast transport service can be used to handle any malfunctions that may have occurred while the autonomous truck was driving on the highway and provide the necessary repairs.
• A backup system could also be implemented that would help in the event of the primary system failure.
• There is no proper and just solution to the unemployment problems of the truck drivers that would be generated from the digital disruption event by implementing autonomous trucks. However, Otto and Uber can train the existing truck drivers employed by them to function in other job roles. There are different positions in a company that can be filled by them. With the right training plans and the right attitude, they would be able to adjust to their new job environment in a very little amount of time.

• An IT team can be developed and trained through simulations to drive the trucks remotely when needed (Trenholm 2017). The development of the simulation software can be outsourced. This training can be provided by developing a facility that can later be used by the team for their operations.
• A separate team can be developed that would be in charge of the repairs to the trucks (). This team can be developed by carefully selecting some individuals who are well versed in the field of automobile engineering and some who would have in depth knowledge of the technology being used for automation (US Department of Transportation. 2017).
• Different training modules can also be implemented to train the drivers in other fields of work. Seminars can be conducted that would help these people to generate interest in other lines of work. Any surplus work force can be outsourced, which would in turn provide more revenue to the company.

Conclusion:

Thus, it can be concluded that self-driving automobile is the future of the automobile industry and autonomous trucks is the future of the freight and logistics industry. Trucks controlled by computers would definitely help in reducing the operating costs of a freight company. From the above discussion, it can also be concluded that there will be reduction in the number of accidents arising from human errors. All of the discussed advantages would also come with a cost. There would be widespread unemployment issues as the need for truck drivers would be completely eliminated. Autonomous trucks will always need decision making by a human during complex cases. Fast repair teams would also be needed for smooth operation of the autonomous truck service. The future of the freight industry thus depends on how the management of the company devises and executes their future policies.

Reference:

American Transportation Research Institute. 2017. New Research from ATRI Identifies Autonomous Vehicle Impacts on Trucking Industry. [online] Available at: https://atri-online.org/2016/11/15/5267/ [Accessed 30 Dec. 2017].

Chafkin, M. 2017. Uber Debuts Its First Fleet of Driverless Cars in Pittsburgh. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on [Accessed 30 Dec. 2017].

Cohen, S. 2017. Are Driverless Trucks Ready For Delivery?. [online] HuffPost. Available at: https://www.huffingtonpost.com/sam-cohen/are-driverless-trucks-rea_b_12742318.html [Accessed 30 Dec. 2017].

Dubofsky, M. and McCartin, J.A., 2017. Labor in America: A history. John Wiley & Sons.

Knight, W. 2017. China’s driverless trucks hope to overtake their international rivals. [online] MIT Technology Review. Available at: https://www.technologyreview.com/s/602854/chinas-driverless-trucks-are-revving-their-engines [Accessed 30 Dec. 2017].

Steinmetz, K. 2017. Inside Otto, Uber's New Self-Driving Truck Division. [online] Available at: https://time.com/4458507/otto-uber-deal-driverless-autonomous-trucks/ [Accessed 30 Dec. 2017].

Trenholm, R. 2017. Why self-driving cars won't put all Uber drivers out of a job - Roadshow. [online] Roadshow. Available at: https://www.cnet.com/roadshow/news/uber-self-driving-cars-will-not-replace-all-uber-drivers/ [Accessed 30 Dec. 2017].

Trucking.org 2017. American Trucking Associations. [online] Trucking.org. Available at: https://www.trucking.org/News_and_Information_Reports.aspx [Accessed 30 Dec. 2017].

US Department of Transportation. 2017. Secretary Foxx Unveils President Obama’s FY17 Budget Proposal of Nearly $4 Billion for Automated Vehicles and Announces DOT Initiatives to Accelerate Vehicle Safety Innovations. [online] Available at: https://www.transportation.gov/briefing-room/secretary-foxx-unveils-president-obama%E2%80%99s-fy17-budget-proposal-nearly-4-billion [Accessed 30 Dec. 2017].

Wadhwa, V. 2017. Shift to automation may prevent Trump from delivering on his jobs promise. [online] chicagotribune.com. Available at: https://www.chicagotribune.com/business/ct-trump-biz-tech-automation-robots-jobs-20161109-story.html [Accessed 30 Dec. 2017].