39. Aicha Evans Wants You to Take Your Eyes Off the Road

24:45People who need to control their life tend not to be very happy, is my experience. Right. People who accept whatever comes tend to be pretty happy. You also said that you had changed in your own life, that you were able to let go of control and you were happier now than you used to be. So a few listeners had a follow up question. Specifically, a woman named Linda wrote in to say that she would love to hear you elaborate on how you were able to let go of the need to feel in control all the time. Do you have a good answer for her? So Linda, I do have an answer to that question, although I think it's going to turn out to be a little bit heavier than you hoped or thought.

25:21But here's my answer. I can think of two distinct events in my life that have profoundly affected the way I think about control. The first of these was a month-long trip I took to India. And I talked about that at length in our episode with Sam Harris. So I'll just leave that to listeners. if they want to hear that story, they can go back and listen to that old episode. But here's where it's going to get heavy. The other experience in my life that deeply affected the way I think about control was by far the most tragic thing that's ever happened to me. I had a son named Andrew. He died suddenly nine days after his first birthday from meningitis, completely out of the blue.

26:02And I had always feared something like that. Sometimes losing my child was probably the deepest fear that I had. and I wish that I could say, oh, the reason I was able to let go of control is that my worst fear came true and it turned out not to be that bad. But actually it was the opposite. My worst fear came true and losing a child was so much worse than I ever imagined it would be. And really the only escape from that for me was surrender. It was surrender to the universe and it was just the pain and the loss was so great that I just kind of gave up And I don't even know if that will make sense to people listening, but to move on in life, I just gave into it.

26:44I just gave into the idea that I had no control, that I was nothing, that the world was going to do what it was going to do to me. And I had no choice but to accept that. And there was virtually nothing good that came out of his dying. But I have since then been more or less free of the need for control. And I wish it could have happened in any other way than the way it happened. I know that you really like the serenity prayer. Is that why? Absolutely. So I don't even know the serenity prayer except for the first two lines. God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.

27:23And I think those are some of the most profound words I've ever read. Yeah, me too. Thanks for sharing, Steve. I hope some of our listeners have found some comfort in what you said.

27:39If you have any questions for us, please write in. Our email address is pima at freakonomics.com. That's P-I-M-A at freakonomics.com. We'd love to hear your thoughts, ideas, and questions about anything. Let's get back to the interview now.

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30:01Where do the existing auto manufacturers stand on the issue of autonomous vehicles? I suspect that they're pretty happy with the status quo, but I also suspect that they want to feel like they're going to be part of the future, although they're probably not very well positioned to do it because it's really hard to defend the status quo while bringing the future. Are they fighting it? Are they part of it? I think it's a little bit of both. Very traditional when it comes to a core business that's doing well, but that's also being disrupted. First, in terms of the status quo, they are trying to make the current vehicles as sophisticated as they possibly can.

30:40And also the EV transition is definitely picking up steam. When it comes to autonomous driving in terms of a fleet of robo-taxis that's just for transportation and pick up and drop off, you see a little bit less momentum there. But that's to be expected. This is why most companies are very successful and then they basically sit at the top of that success and then they forget to look at the disruption that's coming either sideways and from the bottom. And then a lot of them over a cycle disappear because they miss the transition. Again, this is inevitable. So those who embrace the new world will be fine and those who don't will have a very difficult time.

31:24This has been true since the beginning of times. Doesn't matter how well you're doing. At some point, there will be disruption. You embrace it and you get to be around for the next round. You don't embrace it and you go away. Yeah. This is an aside, but do you think it makes sense that Tesla has a market cap of over $500 billion more than the next six auto manufacturers combined? I don't know anything about it, but it seems really bizarre to me. That's a tough question. Look, I don't know that I'm qualified to say whether it makes sense or not from just an absolute value standpoint. There are a lot of things in this market that are quite mind-boggling, shall we say.

32:08But I want to give them credit. At the end of the day, they are disrupting the industry. At the end of the day, they have found a way to do it while developing technology and participating in the innovation while already delivering a product to customers. And sometimes I'm sure maybe my PR team will be like, what did you say in a podcast? But the reality, I think fair is fair. So Tesla and Zooks are taking a really different approach to autonomous driving. So they're incrementally trying to implement within the given system ways of building in levels of help from algorithms. And you have taken the incredibly bold strategy of skipping over everything intermediate and jumping right to the punchline.

32:57So let me just say what seems so radical to me. The first one is that you're building vehicles that don't have any space for anyone to ever drive. So you're not hedging against the possibility that you're going to need somebody sitting in the front seat, which makes total sense. I mean, but it's risky, right? It's a big swing. Secondly, you're not content like, say, Uber or Lyft to be providing the taxi service. You're not content like Tesla or Ford General Motors to just be making the vehicle. There must be people who are just in the software part of it as well. It just seems like a really big, thinking big, which I'm all in favor of it.

33:39But I don't think you really captured how visionary what you're trying to do is. You're probably trying to be modest or something. But it seems to me like succeed or fail, it really takes a lot of chutzpah to be trying to do what you're trying to do. I haven't heard the word chutzpah for a while, so thank you for that. That's making me smile. Look, we actually look at it very differently. We look at it as we are the most focused of everyone. We are taking the subset of the different technologies, vehicles, electric vehicles, robotics, AI, the service, software, simulation. We're taking the intersection of those that is required to solve the problem and solve it correctly.

34:22We don't think that taking a bunch of cars and retrofitting them by just slapping sensors on them is going to do it. And so we think that you architect the vehicle with that intent from the beginning, and we have not deviated. And we're not doing anything else. We're not doing trucking. We're not doing logistics. We're just doing these people moving. And yes, it has no manual controls because as we started talking about earlier in the podcast, we don't want you to think, you the customer, to think about driving. We're going to transport you. And so we think that we have an advantage when it comes to iteration and speed, because all of the disciplines are in one room or one company.

35:02You don't have five different companies with different pedigrees, with different interests, with different intent, trying to slap things together. And then in terms of people, we started with two co-founders and that was it in 2014. We're up to about 1 ,200 people and hiring, by the way, in all of these disciplines. Everybody looks at it as we're trying to do a lot. We look at it as we're super focused and we're using all of the pieces, but only the necessary subset that is needed to integrate, collaborate, get to market. And at the end of that is a fleet of robotaxis that are fully electric and fully autonomous.

35:40And all you do is ride. When do you hope to have the first paying customer climb into one of your vehicles? Aha! That's the most important question that I don't give an answer to. No, I'm teasing. Look, the answer is not next year, for sure, but certainly much sooner than people realize. We have line of sight. There's still some elasticity because we have some important work to do. But it's not next year, but not too far in the future either.

36:12I would love to talk about the economics of your business. In the regular taxi business, labor is a high component of cost relative to the vehicle itself. And in your business model, you save enormously on that dimension. But at least for now, I suspect the cost to produce one of your vehicles is sky high. Is that true? Let's just say that it is not inexpensive to produce one of our vehicles, yes. But remember, we're amortizing it ride by ride. And this is an electric vehicle. This is not like a passenger vehicle that is essentially built with the understanding that it will be idle 96 % of the time and only driving 4 % of the time.

36:52These machines are built to be driving all the time with a very long, useful life. I don't necessarily just look at the absolute value of the cost that is being added. I look at how much is that going to add per ride? For example, today, when it comes to pick up and drop off, the statistics or the information says that about 40 % of the time, mobility on demand drivers are basically driving without a passenger. We can optimize that because we don't go to get a coffee. We don't go to the restroom. We don't decide to stop for a phone call. We're just picking up, dropping off, picking up, dropping off.

37:28We know where the next passenger is and we can optimize the placement of the fleet. And so we look at costs in a very different way. Now, in absolute terms, I want this vehicle to be as inexpensive as possible because that's just pure margin. But we're a lot less sensitive to it than most would think from a business model standpoint, because it's really how much cost are you adding to a ride? But that high cost is the reason why you don't want to sell me one of these, even though I really want to buy one and put it in my garage. That's the reason why you're not thinking that direction. You are too smart.

38:00First of all, it's not practical, but yes, it wouldn't make sense. So I wrote an academic paper using Uber's data, and two key insights emerged from that study. And the first one was that the consumer surplus associated with ride sharing was huge. In other words, the benefits that consumers got from the existence of Uber being available was far greater than the amount of revenue the company was getting or that the drivers were capturing. Basically, it was just saying this is an amazing innovation for society. And your business model is exactly along the same lines and would also yield these huge social returns.

38:36But the second insight that emerged from that paper was that by any reasonable standard, Uber was charging way too little for its rights. So for the economic nerds out there, Uber was pricing on the inelastic part of their demand curve. And you learn in Econ 101 that a profit-maximizing firm should never price on the inelastic part of their demand curve. I think partly Uber was making a mistake, and they didn't realize how poorly they were pricing. But also, I think they were caught in a very competitive situation. Tough competition led them to want to charge low prices to try to capture market share.

39:16And I wonder, do you ever worry about the possibility that you'll overcome all of these other obstacles and then cutthroat pricing will leave you with no margin in the end? So I have to be careful here because I also don't want to come off arrogant. That would be bad. I worry about it in terms of I monitor for that tendency, but I'm not too worried that we're going to do that. Because first of all, mobility on demand, a contract has been established. That's one. Second of all, look, this takes a lot of technology. This takes a lot of talent. You can't just wake up as a willy-nilly company and say, I'm coming into autonomous driving tomorrow morning.

39:57It takes time. We've learned a lot, several generations of iterations. So we think that the competitive landscape is going to be a little bit simpler for us because of that. We're not saying we're going to be the only ones. This is a multi-trillion dollar opportunity, according to Morgan Stanley. and we know that those don't get controlled by one company. That's just not the way it works. But we think that the time to be low barrier of entry and very commoditized is many, many, many, many, many decades away. Now, will there be price wars, especially in certain markets? Probably. But you know what?

40:33That's okay. The customer benefits. At the end of the day, we think that there's a lot of elasticity in the business model, and we are very resilient to variation in pricing. But overall, your plan is not to follow the Uber path. So far, they've run up over$20 billion in losses. So you're not hoping to follow that path, I take it? No, I'm not one of those who puts profit ahead of everything. You build great technology, a great company, a great culture. You provide a product that customers want. And then out of that, the outcome will be a great business. and great business equal revenue, margin, net income, free cash flow.

41:25You had an incredibly successful career at Intel, rising through the ranks and then becoming the chief strategy officer. Do you ever think you were crazy to leave to come be the CEO of Sooks? That's a funny question. I assume you want an honest answer, yeah? Oh, of course. I'm always looking for honesty. Look, yes and no. Something happened to me the last few years where I was very happy at Intel. It's a company that I love. But at the same time, I had been there for a while. I was getting a lot of phone calls to do something different. They said, I'm not ever leaving Intel to go to another big company.

42:03I'm happy here. at the same time, you start getting to this point in your career where obviously you want to be compensated fairly, you want challenging assignments, but you start thinking about meaning, impact, legacy. And when the call came about Zoox, first immediate reaction was like, oh, that sounds complicated. It's very worthy. And remember, by trade, I'm a wireless engineer, and I think that wireless is also a transportation business. We just happened to transport bits that lead to access and knowledge. And obviously, we've seen what happened with wireless over the last, what, 30 years.

42:42It's been amazing what it's made possible for all of us. So I talked to board members at Zoox and I talked to our co-founder, Jesse Levinson. And obviously, I got to see the company from the inside. And within about 30 minutes of the on-site visit, I was like, yeah, right on. Legacy, meaning, changing the world. I maybe won't be here for when Zoox is deploying in Africa, but it's still worth it. But it took about a couple of weeks of a very isolated vacation with my family to pull the trigger and say, yeah, let's go do this. You can afford it. And best case, it works out and you do something super meaningful and super transformative and super impactful to society.

43:27And worst case, you learn a lot. So why not? Let's go. Let me ask you about failure. So as a manager, I would assume one of the most challenging issues is that ex ante, you want people to take risks and that will inevitably lead to failure. But ex post, there's a real tendency to blame people for failure. And often failures result because people did the wrong things or made choices that weren't great. How do you manage failure at your company? So first, you have to state that it's okay to fail. And then when there's the first or second failure, you have to control yourself because you can't tell people it's okay to fail.

44:10And then you're like the meanie and out of control. It doesn't work that way. So you declare it, you own it. But then you have a few rules. If you talk to somebody at Zoox, I'm pretty sure they would say, oh yeah, she says, basically make new mistakes. If you just live by that, then it becomes really calculated risk. Second of all, I give up to three times. By the third time, I'm like, okay, we have a problem here. And then last but not least, when you fail, the most important thing is really the learning. What happened? Why did it happen? And then how can we make sure that it doesn't happen again.

44:47Are you able to cultivate a culture where people will tell you you're wrong or do people just yes you all the time? The majority of people yes me all the time until the anonymous survey comes in. That's the normal methodology. But it is my responsibility to have a set of people, it's fairly small, who will tell me that I am not queen of the anthill, who will tell me that I'm wrong, who will tell me that I'm inconsistent. There's one person on the team. She starts with Miss Aisha. We need to talk. And so there are about, I want to say, 10 people or so, plus my co-founder. We talk all the time. We've built in two and a half years an incredible amount of professional intimacy and support for each other.

45:33And then there is my husband and my two kids. They will definitely tell me. It's shockingly rare to see African-American women running big companies. I think in the 66-year history of the Fortune 500, there have been three African-American women CEOs. Do you feel any responsibility to fight for change in the system? Or do you see your job as just to be the best CEO you can be and leave social change to others? It's evolved. Yeah, I will own the fact that initially it was all just about being the best that I can be. And I want to say over the last five years or so, through some people talking to me, I'm going to admit, and also through just observing some things, I feel a little bit more of a responsibility.

46:26I don't want to fight for change, though. I want to invite and I want to incentivize and I want to create an environment where it becomes abundance for everybody. I really don't want to live the rest of my life being angry because somebody did this or somebody did that. It's just not a very, at least for my personality, that doesn't work. There are a few things that have happened to me where I'm like, whoa, it is important that people see that it's possible, that people see that I'm normal, that I provide or help with networking, with opportunities, and so on and so forth. But I think it's also important to look.

47:05On the one hand, it's been difficult for me because I'm an African-American woman in high tech. But the reality is, on the other hand, I've also had opportunities because I'm an African-American woman. I trusted early on, I will never forget, a young engineer in, well, he was older than me back then, fairly young engineer in Austin, Texas. We were working together and I was the youngest one out of the group. And we were always like, oh my gosh, I need to do a good job and everything. And he was like, Aisha, you can always speak up. First of all, you're an RCG, recent college graduate. We don't expect much.

47:38And so if it's dumb and stupid, it's like, you don't know any better. Let's teach you. And if it's interesting, we're like, whoa. And it's very likely that it's going to be a perspective that is very different from any other perspective that is offered in the room because you come from a different environment and a different upbringing. So please trust that. So you were born in Senegal. I'm curious whether you were extremely driven and single-minded in your focus right from a very early age? Were you different from the other kids? Well, I mean, okay, my father was in telecommunication engineering.

48:12So that's what I knew. I had to hack a rotary phone to have access to my friends. And so a few things that looking back First of all, in my family, it wasn't really an option that you're not going to get educated. The alternative wasn't presented. It's just the expectations that were set. And what became normal was you go to school and you get a degree and you work hard and you become a functional adult. Hacking a rotary phone? What do you mean by that? When I lived in Paris, I would go back to Senegal and I would want to call my friends. And so we had these rotary phones and I was calling my friends in either direction and very, very expensive bills.

48:53And we were doing well financially, but my dad was like, this is ridiculous. And so he put a lock. There's a little lock that you could buy. It literally had a key and you would turn it and then you couldn't move the little wheel to dial numbers. What he forgot is that you have the handset and when you take the handset off the base, there are two little clicks. So I opened up the phone. And when you're dialing, what's really happening is that the movement of that dial, depending on the delta T distance, provokes basically a number of clicks on those little clicks. So I figured out how to write down a phone number in terms of number of clicks with the right interval in between.

49:32Would you dial wrong numbers pretty frequently? Yeah, it was a catastrophe at the beginning because getting the click is easy, but the space and time between the click. It takes a little bit of time to master that rhythm. But eventually I got pretty good at it. And I would dial with my finger and I would tap. One would be one click, two is two clicks, three is three clicks. And I figured out the rhythm perfectly. And my dad was like, I can't understand this. We're still getting crazy phone bills and it's the same phone numbers. And I'm like, uh-huh, uh-huh. He still jokes about it. It was probably one of his proudest moments, I would suspect.

50:06Back then, he was very unhappy with me, but I started sharing this story publicly the last couple of years. And he said, now I can tell you, that's how I knew you were going to be okay. That is awesome. I love that. So what advice do you give to young people who are listening to our conversation? You've obviously been incredibly successful, but you've also kept a spark and a joy around you, which is really unusual, I have to say. So I'm just curious. I mean, I look at you and I think, wow, if my daughters could be like you, both with the success, but even more so with the spark. So let me forget about success.

50:45I don't care about success. The spark. How do you keep the spark? Happiness is a choice. That's one. Second of all, I just feel that in the grand scheme of things, life is really good. and somebody who is inquisitive, somebody who takes a lot of risk in life. I enjoy that. I enjoy trying new things, seeing new things and really exploring what I'm interested in. And it's almost like I have no other choice but to be happy about it because otherwise the alternative is I'm miserable. And if you're miserable, then you have fear. I mean, when it comes to Marie Curie when she says nothing is to be feared, it's only to be understood, and now is the time to understand more so we can fear less.

51:35I truly believe in that. And it's just a practical thing. Look, if you give me business assignments that's very steady state and keep the business running and maintaining and you really need the revenue out of it, you shouldn't give it to me because that's not my personality. That's not how I get into my happy place. I like things where You're not sure is it possible or not. It takes a lot of risk to figure it out. And I accept that with that will come failure. If it's easy all the time, that means we're not pushing the envelope. We're not innovating. We're not taking risks. So if you want to learn to live with failure because it feeds another happiness in you, which is the happiness of discovery and creativity, you have to work on staying happy.

52:24Choose happy. Simple words of advice from Aisha Evans. Is it really that easy? I'm sure not. But on the other hand, it's a life strategy that is so obvious that it never really occurred to me. Can I really choose happy? That would be amazing. Well, it definitely deserves a try, don't you think? And if you give Choose Happy a shot, let me know how it works out for you, good or bad. People I mostly admire is part of the Freakonomics Radio Network and is produced by Freakonomics Radio. Morgan Levy is our producer and Jasmine Klinger is our engineer. All of the music you heard on this show was composed by Luis Guerra.

53:03Thanks for listening.

53:13Does Amazon leave you alone or are they up in your face all the time? I don't know what that means.

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