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Flexdrive: Lyft's Secret Weapon in Autonomous Mobility · Autonomy Insiders

• Daniel Abreu Marques: Welcome to Autonomy Insiders. I'm your host Daniel and when you think about Lyft's autonomous driving strategy, the first thing that comes to mind is probably Waymo, the partnerships, the announcement. But underneath all of this sits a name that not enough people are talking about. FlexDrive. FlexDrive might be one of the most underestimated assets in autonomous mobility right now. It is Lyft's fleet management subsidiary responsible for keeping autonomous vehicles on road, charged Today with John Parks. Welcome to Autonomy Insiders, the show where global industry leaders in autonomous driving unpack their real-world insights. clean, maintained and matched to rider demand. And today we have FlexDrive CEO John Parks here on Autonomy Insiders. We go deep on what FlexDrive actually does, how you build an AV depot from scratch, what makes autonomous fleet management fundamentally different from anything that came before, and whether FlexDrive will follow Lyft into Europe. So John, so happy to have you on today. John Parks: Thanks for having me, Daniel. Daniel Abreu Marques: So people in the AV industry have heard the name Flexdrive, ⁓ could not tell ⁓ what it actually does day to day. So maybe let's start there. ⁓ what is Flexdrive and what does it today? John Parks: Yeah, great question. Flexride is a wholly owned subsidiary of Lyft. So we're a fleet management company. Today we manage 15,000 vehicles across 24 locations here in the US. vehicles are predominantly rented out to people who want to drive on the Lyft platform. This started back in about 2017 when Lyft was growing rapidly. We were looking for additional supply that we needed on the platform. ⁓ we realized that not all drivers have a car that either meets the requirements or they may not want to put all of these ride share miles on their personal car. And so we started out on this journey to how do we make supply more accessible to everyone. through growing this rental business, we ⁓ the folks at FlexDrive and realized that this would be a great opportunity for Lyft to continue to grow its supply network. Over time, we that partnership more and more. And then in 2020, Lyft made the decision to acquire FlexDrive. And so today, You know, it's the holy on subsidiary, like I mentioned, but we run all of these fleets for the sole purpose of putting vehicles back on the Lyft platform. We got a pretty small team. You know, we're either the fifth or sixth largest rental car company, depending on what day it is. And we do it with less than 200 people. So we're super proud of being a small team, really focused on hyper efficiency to put cars on the road to serve Lyft I think the exciting thing and what excites me about being here today is. When we made the acquisition in 2020, we did it really for kind of two main reasons. One, the rental program was going, we wanted more control. We wanted to make sure that we were controlling the experience of those people that were coming to rent. And so the best way to do that was to vertically integrate. The other key component of this is at the time, Lyft still had our autonomous division internally called Level 5, where we were building out our own autonomous capability. And if we were going to have autonomous vehicles, in-house on the platform and if they were going to be part of the growing rideshare ecosystem, we wanted to have this fleet management capability in-house. We thought this was going to be a critical component. And so by the acquisition of FlexDrive, we kind of got to achieve both of those aspects. Well, we ended up selling off the autonomous division to Woven in, I believe it's 21 or 22, but we decided to keep FlexDrive. And so now, as we're going to talk about today and kind of what we're doing with Waymo and Nashville, it's kind of like the culmination. ⁓ of this story to really realize the benefits of the decisions we made in 2020. Well, this is kind of the start of the completion of the ARC by no means is this the end. And so we're really excited about what the future entails. Daniel Abreu Marques: Yeah, super interesting and also help ⁓ our listeners ⁓ the structure a bit better. is Flexdrive then run as a standalone Business unit inside Lyft, so with its own P &L, or it's more deeply integrated into the Lyft operations? John Parks: Yeah, if you know, Lyft single source reports our financials. so it's a little bit of both, I would say, right? We are the only rental business that exists within Lyft umbrella of companies. And so by that nature, we run our own business as a rental business. Then we also have a deep integration with the Rideshare component of it. And it's important as we think about how do we manage. our business, right? It is tied to providing vehicle access for Lyft drivers who want that. You know, the markets that we're in, we're anywhere from 7 to 10 % of the rides that are given on the Lyft platform. And when you make up that base volume of rides, it's important that we work in close collaboration with our partners at Lyft. And so I say that because it is a little bit of both, right? We have a strong operational tie to those people who are managing supply and demand. ⁓ as well as running it as a business within the Lyft ecosystem. Daniel Abreu Marques: And maybe on the ⁓ so FlexDrive the vehicles, ⁓ also on behalf of Lyft, and now for AV partners. And who owns the vehicles? Who pays for maintenance, insurance, charging? So where does FlexDrive revenue come from? And maybe also where is the difference between your first product now also with the AV partners? John Parks: Yeah, when we think about AVs, we really kind of think about three different models that exist within our of our construct for AV partners. The first would be where we have an AV company who wants to own the vehicles. They need fleet management support to deploy those. And then they also need the demand that comes from the Lyft platform. And so in that scenario, the AV partner would own the vehicles, continue to provide the necessary support for the SDS, right? I think thing that people forget perhaps is that an autonomous vehicle isn't like an iPhone. You don't just buy it, and then it just operates on its own forever. ⁓ I think thing that people forget perhaps is that an autonomous vehicle isn't like an iPhone. You don't just buy it, and then it just operates on its own forever. ⁓ AV company still continues to be a significant part of the ecosystem ongoing. And so in these models, the AV company will own the vehicles. FlexDrive can provide the fleet management. And then Lyft provides the revenue or the demand generation. So that's one model. That's very similar to what we're doing in Nashville with Waymo. We have a second model where Lyft, one of Lyft's subsidiaries or a strategic partner would own the vehicle and in collaboration with the AV partner, the ongoing service, Flex would manage the fleet. And then also provides the demand side of things. So that's a more vertically integrated. That is what our partnership with Baidu in London more looks like. And then there's even a third component where the AV partner kind of does everything, right? They want to do the fleet management. They want to own the vehicles. We're really just the means with which Lyft becomes the means with which generate revenue. And that is what our partnership with May Mobility currently looks like in Atlanta. And I share those three models because ⁓ position is we want to be, you kind of have a model that will work for everybody. know, everybody's at different phases ⁓ of development of their AV technology. There may be some things they always will want to keep in house and there's some things that they may never want to have in house. ⁓ And so we want to make sure that between Lyft and FlexDrive that we can provide whatever support is needed for these partners so that they can ultimately advance their technology. We can bring AVs onto the Lyft platform and make a successful environment for everybody. Daniel Abreu Marques: And vertical integration with Lyft's marketplace is also described as one of FlexDrive's ⁓ advantages. So the argument is that standalone fleet managers cannot match vehicles to the demand the way FlexDrive can because they do not have access to the ride-share platform. And real is that advantage in practice? And can you give me also a concrete example of a decision FlexDrive makes because it sits inside Lyft? John Parks: Yeah, if I kind of go back to the rental side, there have been other rental companies that have tried this model, this kind of commercial rental model rideshare drivers. And lot of them didn't make it. They didn't make this structure. And I think that's also kind of telling that you have to be very tightly integrated with the rideshare partner and network. And I think that's key because understanding supply and demand, when you need it, when you don't, how do you manage that, is critical. We'll take things like, even if we take a macro level of how we do things today, we really function more on a week-over-week basis. These are weekly rentals at auto renew, but that's how we think about things today on the weekly basis. And so we can look at even seasonality. When do markets, like whole markets, when do we see a dip in rider demand? and the need for incremental drivers, well, we'll start to look at those dips and say, OK, well, if I need to refresh the fleet, if I need to pull vehicles out of the fleet and put new vehicles in, I'm going to do it during that time. That's an operational burdensome time for us. And so we really kind of use those seasonality curves to manage our fleet. Not to mention, how are we forecasting demand growing the business? That's all intimately tied. Well, that works well for a rental business today. But as we move in the world of AVs, where we stop talking about ⁓ week over week, and we really start talking about hour over hour, or even minute over minute, and looking at demand curves then. If you think about when am going to charge a car? When am I going to perform schedule maintenance? Being able to very accurately predict what is demand going to look like on the platform, and sometimes kind of in real time, right? With Lyft, we get to see how many people are opening the app, how many people are trying to request a ride at the time. And we can be fairly dynamic with that and say, OK, Demand is starting to dip for whatever reason. And we can pull the vehicles off. We can go do our schedule maintenance. We can send them back to charge and make sure that they're back on the road as we start to see that demand start to spike again. When you think about the cost of the depots, the cost of AVs, the number of miles, we're talking about 100,000 miles a year, making sure every mile is revenue generating and there's no lost time and lost revenue ⁓ going to be critically important for the ⁓ of all of these fleets. And that's really where we lean on this partnership with Rideshare and within our core marketplace business here to sure we're maximizing the utilization of those assets. Daniel Abreu Marques: This absolutely makes sense. the industry talks a lot about the driving software, the sensors, the regulations, but almost nobody talks about what happens after the car can drive itself. but you to keep it charged, cleaned, maintained, insured, dispatched, and also recovered sometimes when something goes wrong. So. David Risher called flex drive also its secret weapon. And in one note I read that he estimates it could deliver more than 20 % additional cost efficiencies per mile on top of a broad AV saving. So where does that number come from and what drives those efficiencies? John Parks: Yeah, I mean, you mentioned, you know, cars, they don't do everything autonomously. I always have to like chuckle when I say like they don't charge themselves, clean themselves or repair themselves. will eat these words probably later when they can do all of those things, but I don't see that ⁓ the near future. But going to David's point, yeah, I mean, we we've really spent a lot of time with FlexDrive the last few years trying to find ways to make the fleet ⁓ as efficient. as possible. And my team is tired of hearing me talk about tires, but we're going to talk about tires for a minute. And so where does that 20 % come from? What we have found today is that leveraging technology is going to be your best friend when you're really trying to compress costs as much as possible. And so when we talk about tires, we have 15,000 vehicles in our fleet. There's four tires on each car. We know the tire pressure on all 60,000 vehicles in our fleet. And why is that important? ⁓ It's important because one, low tire pressure can lead to safety concerns. And then two, low tire pressure leads to advanced wear on the tire. And so what we have developed internally is we have an automated system, the tire pressure gets low, we send a notification to our drivers that says, hey, your tire pressure is low, you need to go air it up. And we will continue to do that until the tire pressure gets back. So one, we're making the rides more safe. And two, we're also prolonging the life of that tire. you're driving 45,000 miles as we do today or 100,000 miles on an AV, you go through a lot of tires and tires are expensive. And so like that's just an example of how we're leveraging technology and leveraging what we've built over time to continue to bring that cost down. Also the automatic notifications means that we don't have somebody that's checking the tire pressure. So now we need less staff So we've really spent a lot of time trying to figure out how do you manage Daniel Abreu Marques: you John Parks: vehicles today with less than 200 people. Now, AVs is a different story, right? It's not a car that a driver has in their possession. And so we acknowledge that, right? We acknowledge ⁓ it's going to be different. But we think we've built some muscle memory that as we get operating, we can start to leverage the same things that we have applied to our non-AV fleet to the AV fleets to continue to drive those costs down. Daniel Abreu Marques: One thing that really struck me in my research that more than a third of Flexdrive staff are current or former Lyft drivers. ⁓ And ⁓ you announced also on your blog that you're 70 plus new roles for ⁓ your Nashville Depot, the first purposeful Depot. of these roles, there are 50 % current or former Lyft drivers. that somehow unusual. Was that deliberate? And does having former drivers on the operations team change the way you manage the AV fleet? John Parks: Yeah, if we go back to kind of the earlier days of FlexDrive, we spent a lot of time interacting with people to be drivers on the Lyft platform. That was our customer base. And so if you really want to understand your customers and understand their pain points and their needs, no better way to understand that than to go hire those people come and work for you. And so they understood the value of customer service, what it means to have a rider in the back of your car. what a good, safe, consistent experience looks like. And so it goes beyond just how do we interact with our customers and making sure that our employees can understand and relate to those customers, but also what are the critical components when you get a car to make you successful on the platform? So they're giving cleaner cars. They have an invested interest in understanding what that driver is going to go through when they rent the car that we think it just made a better experience all the way around for the organization. And so what we saw is just, there's that component, and we saw a lot of applicants coming from drivers. Because again, we FlexDrive is the best kept secret at ⁓ Lyft. didn't a lot. The way you find FlexDrive is you want to drive on the platform. And so as we're thinking about hiring and we're advertising roles, that's kind of the ecosystem that we were working in. So it was a very symbiotic kind of, we wanted drivers to come on. They were the ones that were ⁓ in our And the same applies for AVs, right? You may be removing the driver, but you still have in our mind, you have customers that you have to serve. So being customer obsessed is still a critical component to what we do. We see three customers today, right? The rider who's going to get in the back of the car, Lyft who's going to get the car, put the car on their platform, and then our AV tech providers who are kind of entrusting us to own and operate in many cases, these AVs. And so kind of this same mindset applies. We want you to think about the customer and everything we do. We're not just cleaning cars. We're preparing cars to have a rider in the back seat of it and have this just unbelievable experience of riding in a car with no one driving it. It's the same thing they tried to deliver as drivers every day when a passenger got in the back seat of their car. And we're still trying to do that. I think there's another aspect of this too is we see the drivers as part of the community, right? There's this ecosystem that makes Lyft work. And so whether you're driving on the Lyft platform because you want to earn a little extra money, you're going from one job to a next. We just see this as a continuing way to support the community as well. And so these jobs in Nashville, many of them are high-tech jobs and they're transferable skills that while we hope that they come and work for us forever, right, for a long time, we acknowledge that that may not be everyone's ultimate goal. And so we see this as another way of promoting people's growth. really building this community of people who will continue to support Lyft and FlexDrive and the riders and the drivers that exist in the ecosystem, even beyond this. So how do we set people up for success for their next evolution of life? Daniel Abreu Marques: that's so interesting because it's ⁓ one of the examples where you also see that ⁓ AV is not taking jobs, but also creating new jobs and really ⁓ high value jobs. So super interesting to see. John Parks: Yeah, they can't charge themselves yet. Daniel Abreu Marques: Yeah, absolutely, yet. let us talk a bit more about Nashville. So on ⁓ 7th, Waymo launched its robot taxi service. They're in partnership with Lyft. Nashville is ⁓ 11th US ⁓ but it's first where Flexdrive is the fleet management partner. And this is moment where everything you have been building ⁓ gets tested in public. So what does... Nashville AV Depot look like. So walk us through the physical infrastructure, how large is the Nashville facility, how many vehicles can it service. John Parks: Yeah, happy to. The Nashville Depot, I think it's roughly 80,000 square feet. And it's going to be a Depot where we have three components to it, the way that we look at it. One, we have an office space. And what we're really excited about, this is going to be our first AV Depot. And so in addition to the people who are working at the Depot, we're going to have some of our central functions, the people, what we would say, back of house, who help us manage the fleet. They'll also get to work there. So they get to be close on the ground to understanding what happens. The Nashville Depot, I think it's roughly 80,000 square feet. And it's going to be a Depot where we have three components to it, the way that we look at it. One, we have an office space. talk a little bit about these central functions first. One of way that we run our fleet so lean is that we consolidate kind of core subject matter experts into a central team. And so that allows us to scale rapidly without having to replicate the entire FlexDrive team in each new market. So one of the good things will be that we will have some of our central function teams that sit in Nashville and get to see what it looks like day in and day out. So we'll have some, you know, office space for the market managers and those. And then the second, probably very major component of this is charging. So we'll have in excess of 40 charging ports and stalls where we can charge the vehicles. And then the third component is service. And then the second, probably very major component of this is charging. So we'll have in excess of 40 charging ports and stalls where we can charge the vehicles. And then the third component is service. And so when I think about kind of what we're bringing to the table, I do want to go back and mention that from 2019 to 2023, Lyft built and operated vehicle service centers. And I don't think that's a thing that a lot of people know. We ultimately sold that in 2023 as we kind of shifted focus a bit at the company, but it's something that we've done. And so the people who are building and designing this Nashville Depot have designed and built and we put into production 10 of these vehicle service centers in the past. And so, you know, we kind of joke that everything comes full circle here. And this is something like, as we started going down this process, we had the opportunity to just kind of go dust off some of our learnings in the past, right? And deploy those here. That's going to be the critical component at the depot in Nashville. Daniel Abreu Marques: And how long does it take to build such a depot? And also, what did it cost? John Parks: Yeah, mean, see, we're going to go on about a year. So we'll open the doors later this fall. And ⁓ it us about a year. ⁓ We very fortunate at this depot build, though. ⁓ It the requisite that we the electricity coming in. It didn't all of it, but the rest was pretty close by. I think you've talked with Peter before in the past. Infrastructure is a very challenging thing when you're talking about megawatts of power. And so we were very fortunate to find a site that one, kind of the footprint met our needs. It was in the general location that we preferred and there was energy available. By the time this is all said and done, we've already shared that this is gonna cost millions of dollars to invest to bring this to the market. But as we think about the benefit that this is gonna serve, we're pretty excited about what we're building here. Daniel Abreu Marques: And could you maybe walk us through a typical 24-hour cycle of a Waymo vehicle under flex drive management in Nashville? So from morning prep to overnight, how will this look like? John Parks: Yeah, we think about kind of the transition from our rental business to this, the concept 24 hours is ⁓ super interesting. the thing I try to remind internally to our people is let's think less about 24 hours and let's think of it more as continuous, right? The vehicles don't care whether the sun comes up or the sun goes down. And I say that because it's critical for us to think about that as we build out our shifts. While the vehicles may not care about that, people very much do, and people don't work autonomously. And so we've got three shifts that we're running at the depot. And the way we think about that is, how do we staff those shifts to meet the needs of the vehicles, which are meeting the needs of the market? And this goes back to the supply and demand piece of this. So ⁓ charging is one of those things that goes on continuously. but we're not necessarily going to perform service and maintenance continuously. And so how do we think about the right staffing models so that we're, again, being as operationally as efficient as possible? And so we'll look at our supply and demand curves by market and say, OK, this is when we see the least demand. is very much a tourist city, right? And people come there to ⁓ the music and the nightlife. And so when you get. low points of demand in Nashville can be very different than another major market in the US. So we take all that and we'll build our staffing based on what vehicles are going to come back and when. And so I just say that because doing some level of maintenance all the time, but you're going to get heavier levels of service and maintenance during those low demand periods. That might be early in the morning. That might be late at night, depending on what the market will tell us. But we already know what that looks like now and for us, think it's going to be kind of in the early morning periods when people are done partying, they're done, they've left the bars, they're at home, now they're sleeping, looks very different than what we see in our other markets. Daniel Abreu Marques: And let's imagine a Waymo vehicle gets stuck ⁓ or enters a situation it cannot handle in Nashville. And what happens on FlexDrive's side? So what is the incident response chain? John Parks: Yeah, the event ⁓ a vehicle gets stuck, we work very closely with our partners at Waymo. They're the first line of ⁓ defense. do they, ⁓ can prompt the vehicle to get unstuck? What is the engagement plan for them? And really what we do is we're here to support them. So we have boots on the ground. We have the personnel to support. And we're at the point where when they ask for help, we'll be there to help them. We have experienced recovering vehicles and doing all of those things, but ⁓ at least in the early days of our deployment, Waymo will take the lead in those responses. Daniel Abreu Marques: our podcast has a strong European focus. So I want also to spend some time on a potential international plan. So ⁓ acquired FreeNow for 175 euros, giving it also a presence in nine European countries. And as you mentioned before, ⁓ partnered with Baidu to bring Apollo Go Robotaxis to London. And also in January, we saw FreeNow by Lyft signed ⁓ Germany's first MOU with Hamburg. to integrate level four autonomous vehicles also in the taxi sector. will FlexDrive operate in Europe? ⁓ also, when by the Apollo Go vehicles roll in London, will FlexDrive be the one managing that? John Parks: Yeah, very excited about the acquisition of FreeNow. Truly incredible people over there and it's been an unbelievable experience to get to work with them as we continue to roll out kind of this AV strategy and plan for Lyft across Lyft and all of Lyft's subsidiaries areas, Flex Drive and FreeNow. So when we think about London and Apollo, right, that's coming online next year. And so... Flex Drive will very much be a part of that. We're going to start mapping. We, Apollo and Baidu, will start doing the mapping and validation process in London this year. We're ⁓ searching for depots in the London market ⁓ that we can ⁓ a full-scale operation up and running. The proposition that we have for Waymo and Nashville and our narrative continues to remain the same. Somebody has to ⁓ own operate. these AVs, I think the reason that we're quite bullish, it goes into, I'll to David's statement again, because I didn't get it there, but when you think about this 20 % improvement, if you think about somebody who is trying to deploy an AV on their platform that doesn't have this vertical integration, they have to outsource it, right? And so now you're outsourcing the management of the AVs, you're outsourcing maybe even the maintenance of the AVs, you're outsourcing. supply controls and inventory management. Well, every time you outsource something, you're bringing in a third party that really wants part of the margin. Nobody's going to do this for free. And so what you're doing is you're actually compressing the margins across the whole value chain. And so where we think we also have this advantage, and this, I would argue, a strategic advantage, is we're actually, we feel like we're expanding the margin. ⁓ I use the hand in the cookie jar method, right? Like if there's only so many cookies in the cookie jar and everybody's reaching in to grab a cookie, everybody gets fewer cookies, right? And so with our vertical integration, what we allow this to happen And so you stop the compression. So we can either offer cheaper rides to our customers, we can offer better economics to our AV partners, or we share it evenly. What that sharing evenly leads to is more demand and more growth. So not only are we offering a cheaper product, a more cost efficient product, let me say that, that we're also ⁓ of growing the margins for everybody and helping everyone ⁓ quickly. We see this same opportunity as we go into London. I think the MOU in Hamburg ⁓ an awesome experience ⁓ awesome opportunity for us to really integrate well with the city. think you know, know, Free Now's headquarters is in Hamburg. And as we continue to expand our AVs, working hand in hand with the city is going to be a critical component to making sure that we're setting AV deployment, the city and our riders all up for success ⁓ a very, very unique way. So we're very excited about MOU and being able to bring all of these services that we're using in the US to Europe with our partners in Free Now. Daniel Abreu Marques: Yeah, when you bring up the Hamburg MOU. a fleet operations perspective, what makes Germany attractive or also more challenging compared to your US deployment? John Parks: Yeah, think the exciting piece is ride hailing. ⁓ have the PHVs and the taxis. You a bit more ⁓ fleet experience, would say, operating on networks. in the US, ⁓ it's usually ⁓ So you have more experience within the German markets of ⁓ what does it like to manage fleets of vehicles for a ride hail ⁓ use case. I think the challenge is, we've been a US-based company. And so this is kind of our first steps into the global market. And so while we are bullish that we have good processes and we understand how to manage this fleet, I'll be the first to admit that we don't know how to manage an AV fleet in Germany. We've never done it before. And so that's the challenges that we're going to have to overcome. Thankfully, we have amazing partners in FreeNow who are helping us navigate what that looks like. We're actually hiring our first fleet manager in Europe in the process of doing that now. So ⁓ starting the expansion process, but it's going to take time. It's going to take some these learning experience. mean, ⁓ Germany an epicenter for the automotive industry. And so we're quite bullish that ⁓ there's great who have done these types of things before. And we get enough of them in the right room. ⁓ We're going to a formidable force in Germany and in the AV space. Daniel Abreu Marques: and maybe staying on the challenges of going international. your point of view, what is the biggest challenge? it setting up the depots? Is it hiring local staff or deeper challenges around regulation? Do you have some thoughts about that? John Parks: Yeah, I think the regulation is a big one, is a big component, right? As we think about what does the homologation process look like in some of these markets, at least in the US, in some of the states, there's very well-defined processes for how do you bring autonomous vehicles to the market. That's not necessarily the case in all European countries. And so I think that's the biggest challenge, Is like, how do we get, line up both the regulations and the deployment timelines and the operational timelines so that everything is starting to converge the right time. But I think these are not unknown challenges. Lyft created at a time where it's not to adversity. And so it's just something that has to be figured out. I think the thing that gives me courage is there will be a path. And so if we can just continue. to understand what needs to happen, build the processes to do that, work very closely with both our partners on the policy team, our AV partners continue to be open and transparent, and work in conjunction with the regulators like we're doing in Hamburg and not fight them. What we see is it actually accelerates ⁓ path to market. And so it's this ecosystem that has to exist where we're all working together. to get AVs into the markets let people experience them. Daniel Abreu Marques: Let us maybe zoom out a bit. Waymo is also deliberately using different fleet partners in different cities. They use Moove as well in Phoenix and Miami, Avis and Dallas, and now Flexdrive and Nashville. That creates a competitive market for AV fleet management that probably did not exist two years ago. Do you see Flexdrive competing Moove and Avis for future Waymo cities, ⁓ or is the market big enough that each is in its own lane, more or less. John Parks: Yeah, if I'm Waymo, I'm doing the same thing, right? I'm going to cast a wide net. I'm going to see what different capabilities everyone brings to the table. And just like we have different models of how AV players can come onto the Lyft platform that we talked about earlier, I'm sure Waymo has the same thing. So I think of it less as competition, right? Our job is to deliver the best service possible to Waymo. If that means that we knock it out of the park and we grow with him, fantastic, right? That is what we want to achieve. Kind of concern myself less with the other players in the market and just make sure that we're delivering what we commit to. We have something unique. We have this vertical integration. ⁓ get fleet management and operations as well as demand generation all at one place, right? That is the secret sauce. That is what we bring to the table. That's unique. There is currently no one else ⁓ is offering that. We have something unique. We have this vertical integration. ⁓ You get fleet management and operations as well as demand generation all at one place, right? That is the secret sauce. It's like, that's what we want to zone in on. That's what we want to focus on is saying, if that's what you want and that's what you want to go, we can go and we can go fast and we can go quickly and we can help you scale in a way that probably many others cannot. And so that's our real value. Daniel Abreu Marques: Yeah, and scale is also a big topic and Nashville launched with dozens of Waymo vehicles and the goal is then hundreds, then thousands. So what breaks when you go from 50 AVs to 500? What infrastructure technology or organizational changes are needed that you do not have today? John Parks: Yeah, when I think about that, it goes back to like the size of the depot. We built the depot to be hundreds, not fifties. I think that's another thing that we have a distinct advantage of too. We generally know what the markets can support. You know, we've been operating in Nashville, I think I looked the other day, since 2014, so years, like a decades plus. so we understand what that market can support. And so as we think about going and building in some of these markets for our AV partners, We don't necessarily just have to listen to what like fleet size the AV partner thinks that they can deploy. We can take a bit of a more long term approach and say, this is what this market can actually in terms of fleet sizes. And so we take that approach as well. Kind what breaks, ⁓ you need to make sure you have a robust pipeline ⁓ of are we hiring people to support the fleet as it grows. ⁓ And the second one goes back to infrastructure. Even if the vehicles could charge themselves, they can't themselves there's no electricity ⁓ flowing to a site to do it. And so as you start to scale, really, ⁓ this depot we were talking about in Nashville is just ⁓ one ⁓ of a few sites will end up being in Nashville. You have to build these sites. We're at a satellite site, you you may only be doing charging and cleaning, but it's important that the vehicles aren't going, all vehicles aren't going all the way back to the depot. You know, when we think about infrastructure, you have electricity, the city also kind of gets to tell you what you can and cannot do here in the US. And so you may find a site that's perfect, but they're like, you can't do vehicle service at that site. And so the more things you try to put into one site, the harder it is to find it. And so we now have our hub, we'll build satellite sites where you just do charging. and cleaning. And so we're spreading out that infrastructure so vehicles travel less without a passenger in the back, maximizing utilization, ⁓ revenue generating miles of that vehicle in the uptime. Those are going to be challenges though, right? Because the more we scale, the more infrastructure we'll need. And that's why it's important to take this long term kind of planning perspective, working in hand with our partner. We show them what we think the market can support. They show us what they think the market can support. And we can say, OK, this is what we think the fleet size may eventually be. And we can start taking that. Because we're lucky, at 12 months to build the depot in Nashville, it could take up to two years to get the requisite power at a site to do charging. those are going to be the challenges, in my opinion. the infrastructure. How do we make sure we're hiring enough people with a long enough lead time that everything comes with the to the market when the vehicle hits at the right time so we can get passengers in the back of those cars. Daniel Abreu Marques: Yeah, infrastructure is a highly debated topic. We also had ⁓ Peter Cohn and from Terawatt infrastructure? And he told us that only 3 % of potential charging sites survived the filter of location, grid capacity and zoning. And that securing megawatts of power in a city does not happen overnight, more or less. yeah, so charging infrastructure is also one of the biggest bottlenecks. ⁓ As someone who has to keep these vehicles charged every day in Nashville now, I think you agree and you mentioned already that it is. And for me, it would also be interesting to know, does FlexDrive own or build its own charging infrastructure always, or do you also rely on partners like Terrawatt? John Parks: Yeah, we try not to have a single approach to anything. We have found in the past that if you have a single approach and that doesn't work, you have no backup plan. ⁓ I'm a big proponent of contingencies and backup plans. So we have a myriad ⁓ of partners and internal capabilities that we will deploy to make things successful. Peter knows very well, ⁓ better than do. But yeah, it's hard. It's hard to find the right infrastructure. And so while we do have amazing partners out there that we use today, you have to have kind of a stable of options because the for AVs is not going to stop. One of the things that I think about a lot is what we hear a lot is like, when are AVs going to become a thing? And ⁓ I in San Francisco. I'm sitting in San Francisco now. I'm like way into work. There was dozens and dozens of ⁓ Waymo's driving around me. And so for me, it's less about like, when is it going to become a reality? It is a reality now. But I think what the struggle is for people is like, they don't get to experience it. And when you don't see it and you don't experience it, it's hard to imagine a vehicle that can drive itself. And so that is something that we want to help and bring to the market. And I'm kind of going on this bit of a tangent because having the infrastructure lined up before that happens is a critical component to being able to get more people in autonomous vehicles and to get them on the road. We're talking about, you know, Nashville here, but, you know, if you go to London, where it's a much older city, finding power in Europe, candidly, is going to be a challenge. And so how do we accelerate the growth if it's 3 % here? I hope it's better than 3 % in Europe, but it's not going to be. And so you really have to think about that long lead time and how do you start scoping for all of that now? We're waiting until, it's time to deploy. You have to do all of that work at a time. Daniel Abreu Marques: Yeah. So maybe let's with some broader question. So what does the AV industry consistently get wrong about fleet operations? So ⁓ what do you keep hearing from AV companies or ⁓ investors make you shake your head? John Parks: Yeah, that's a great question. It also feels like it's so nascent. There's now three real companies that are doing this at scale that ⁓ I don't if there's a lot of that many preconceived false perspectives. It's very new. mean, ⁓ we can talk infrastructure forever. That's a big one, right? It takes time to get this up and running. But I think to be very transparent, like everybody is still learning, right? We're still in such early phases of what it means to deploy AVs at scale. I'll sit here and tell you all day long about all these great things that we do for ICE vehicles. We made a decision in 2020 to buy FlexDrive because of AVs, and we've gotten to this point, and we're super proud of that. But we haven't done it yet, right? Nashville is our opportunity to prove that we can do it and we can do it better than anyone else. What is the world saying about it? Nobody's really talking about it much, right? Like there aren't that many conversations around what does it mean to operate the AVs. hard. The margins are small today, right? Because we're still in the early phases. But what we're bullish on is that like that is improving over time. You heard David say it. Our job is to, I wouldn't say prove the skeptics wrong, but show the world what it can look like. and what it means to be a vertically integrated in TNC network that can deploy AVs at scale at a better economics a better rate than anyone else in the world. And so it's less about proving people wrong and it's just demonstrating what it is that we can do. Daniel Abreu Marques: And if you're looking years from now, so what does FlexDrive look like? How many AVs, how many cities, how many countries? John Parks: Yeah, mean, if hope, you know, we're globally, right? We're in Europe. We're in multiple countries in Europe. We're in multiple states here in the US. I think I'm pretty confident that that's going to happen. I think what does flex drive look like in this new world, kind of regardless of the number of cities and then regardless of the number of vehicles? It is that we are the most trusted AV operator out there, right? And trust goes a lot of ways. We're out here to ensure we're maximizing utilization, delivering an excellent customer experience, making sure that these vehicles are as safe as possible. And I don't even want to say safe as possible, like safety is a non-negotiable, right? They are the safest vehicles out there. And we're protecting brand and the reputation of our customers. And so you get in the back of a vehicle that's managed by FlexDrive, you know it, it feels different, right? It's always clean. It's always safe. You don't think twice about it. And that we're a part of this ecosystem that's delivering safe, reliable transportation that you don't worry about it, right? I want everybody to know who FlexDrive is. And I want everybody to know that we're maintaining the safest vehicles out there. But I also want you to forget about us pretty quickly, right? That it's just this magical experience that you get in and this vehicle takes you where you want to go. That's where I want us to be in five years where it's ubiquitous. ⁓ And also a bit of an afterthought at the same time. Daniel Abreu Marques: Yeah, that sounds amazing. John, are at the end. ⁓ Thank ⁓ very for your time. It was a super insightful conversation with you. And yeah, hope to see Flexdrive soon also in Europe. ⁓ And ⁓ an AV, super clean, with the perfect experience ⁓ managed by So John, thanks again ⁓ and see soon. John Parks: Awesome. Thanks, Daniel.