California regulators voted in favour of robotaxi operators expanding their paid driverless services in the San Francisco city, a major milestone towards commercialising the technology.
The state’s Public Utilities Commission voted three to one to allow General Motors’ Cruise and Google’s Waymo to increase the areas of the city where they can operate a car without a safety driver, and charge riders a fare for it.
Alphabet and GM both fell less than 1 per cent as the markets opened on Friday.
The commission, meeting in San Francisco on Thursday, heard hours of public evidence arguing for and against the expansion of Waymo and Cruise’s turf.
Robotaxis have increasingly become a normal sight on the northern California city’s roads, with Waymo running a fleet of about 200 cars. Such services are currently limited in where they can drive, and the companies typically cannot charge passengers.
Cruise has 300 cars across three cities – San Francisco, Austin and Phoenix – averaging 1,000 trips a day. Both services have thousands of people on waiting lists to try them out.
“This is a huge milestone that enables us to expand Waymo One in SF and continue to serve you,” the company said in an emailed statement.
Cruise said it will help revamp an “unsafe” transport system. It “will continue to work closely with our regulators, first responders and other key stakeholders as we expand our service to more people”, a Cruise representative said in a statement.
Several people at the hearing expressed the view that expanding the services of driverless taxis would better serve those with disabilities.
Human-driven ride-share vehicles often neglect the needs of picking up people with physical challenges, such as stopping abruptly at a curb, some said. Others said autonomous taxis would eliminate discrimination from the process of hailing a ride.
“I experienced rideshare drivers who have left me on the street and refused to open their vehicles,” city resident Sean Durkin told commissioners at the meeting.
Others who gave evidence argued that expanding autonomous vehicles would make the city’s streets safer.
“I never have to guess if Cruise is going to decide to follow traffic rules today,” said San Francisco resident Jason Stafford. “I am tired of seeing my family put in danger when we have a solution to the danger that human drivers cause.”
On the opposing end, many of the people who spoke against the expansion of autonomous vehicles said it would put jobs at risk, including drivers for traditional ride-share apps like Uber and Lyft – both based in San Francisco – as well as workers for delivery services.
Others focused on concerns about the safety and accountability of vehicles that companies like Waymo and Cruise allow to navigate the city.
“I encourage you to think about the 3.5 million truck drivers in the US, and to think that Cruise is currently rolling out delivery vehicles that they call driverless delivery with the express intent of replacing delivery drivers, long-haul truckers and affecting the livelihood of millions of American families and working people,” city resident Graham Isom said.
The verdict expands how Waymo and Cruise vehicles can operate. Before Thursday’s decision, Cruise could only charge a fare in a limited section of the city, while offering a free service covering almost all of the peninsula. Waymo did not charge a fare in San Francisco.
The resolutions permit the autonomous vehicles to operate without a human safety driver during the day or at night, throughout the entire city of San Francisco.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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