Episode #1: Next Generation Fleet Management Platforms with Israel Duanis, Co-Founder & CEO of Fleetonomy
Tune in to episode #1 featuring Fleetonomy’s Co-Founder & CEO, Israel Duanis discussing new-mobility services & platforms, enhancing vehicle utilization and preparing for the autonomous future.
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Michael Leifman: Hi, M4Edge listeners! Thanks for being curious. In today’s tech parlance and in city planning – mobility includes a bunch of different issues, but they all have one thing in common: they shape the quality of our everyday lives. How we get to work, to school or to our friends’ house can make the difference between a pleasant daily city experience and a barely tolerable one. And, one way or another, it’s going to change because of technology.
So, the “Mobility” umbrella covers lots of things, including for example – autonomous vehicles, driverless cars, call them what you will. Artificial intelligence plays a role in other parts of mobility, like, for example, fleet management, for which you can imagine optimization algorithms, would be crucial.
The company we discuss on today’s episode is called Fleetonomy, and they are building fleet management systems specifically with autonomy in mind. Fleetonomy’s offering is designed to maximize vehicle utilization, which is the key to fleet management. It does this by leveraging data from the car itself, from the fleet owner’s data, and from multiple public sources, and then layering on machine learning algorithms on top of that data.
Fleet management is part of that landscape of mobility we talked about, but both the domain and that word include other forms of getting around. Mobility includes e-scooters, rideshares, bike shares, electric vehicles and their charging stations, traffic management, road congestion pricing, and more. In addition to Fleetonomy, this mini-series will include Waycare, a traffic management company, and MaaS Global, makers of Whim. When you put all these together, you can begin to envision a really different transportation future, one in which how we move around, when, with whom, in what mode, and maybe even to where can be dramatically different from the way it looks now.
Given how crucial mobility is to economic activity, and here I’m using the word in its plain English meaning – this sector’s transformations can really reverberate widely.
Once we’ve aired all three episodes, Marco and I will add a brief post-game conversation discussing mobility and the three companies together. We hope you enjoy and without further ado, here is Israel Duanis of Fleetonomy.
Traffic Congestion & the Mobility Revolution
Marco Annunziata: Israel Duanis of Fleetonomy, thank you for joining the podcast, welcome to M4Edge.
Israel Duanis: Thank you for having me. I’m very excited to be here with you.
Marco Annunziata: Israel thank you very much for joining us, and we have a standard opening which is meant to make you very comfortable and relaxed for the course of the conversation and our standard ice-breaking opening is – why on earth are you doing this? is there something in your background, in your previous experience that made you decide this was the problem you wanted to tackle?
Israel Duanis: I was always very interested in automotive technologies. In my early days in the army, I was part of the team that actually built an autonomous vehicle in the DARPA challenge. Later on, when I got my master’s degree, my final project also had to do with building a management system for dynamic shuttles in on-demand transportation services. So, I really like this on the technological perspective, but even more importantly I live in Tel Aviv. I live there with my family, it’s an amazing city, but we do have a big issue with traffic, with pollution with public transportation which is not so advanced. You know, really simple things like picking up my girls from kindergarten and doing that on time, is nearly impossible.
So, guess my passion for automotive tech, along with how bad day to day transportation is here back home, made me realize that I wanted to do something to change it.
I met Lior, my Co-Founder, and CTO in the army. We were both literally sitting chair by chair in the same top-secret team and he is the best CTO I know we’re also good friends. So, we liked this idea and we just decided to start working on it. We did so from a small apartment in Tel Aviv and fast forward we’re here today.
Michael Leifman: I know that for years there was the talk of the Tel Aviv subway which didn’t arrive and didn’t arrive and didn’t arrive and I’ve experienced that traffic.
Israel Duanis: Yeah, we’re still talking. I mean there is construction, there is progress but it’s not here yet. Tel Aviv is changing, you can see today a lot of e-scooters for example. So, the change is here but back when we founded the company, we didn’t have those yet and it’s still difficult to try and get from place to place.
Marco Annunziata: You know based on what I’ve seen in Italy I’m not sure if scooters will make the situation better or worse.
Michael Leifman: And what you’ve seen in San Francisco no doubt. He doesn’t mean the Vespa scooters like in Rome; he means the little scooters. Right? Vespa’s they’ve had forever.
Technology, Business Models & Data
Marco Annunziata: So, Israel, Fleetonomy helps to optimize a vast range of activities. Your customers include fleet owners, Automakers and mobility service providers. Can you walk us through each one of them and help us understand how Fleetonomy helps and what services they pay Fleetonomy for?
Israel Duanis: Sure, when you zoom out and think for a second about what we do in our mission – we see ourselves as a company that is building the next generation of fleet management platforms. Focusing on creating higher fleet utilization, improving efficiency and automatically synchronizing riders, vehicles, drivers while also taking into consideration maintenance constraints.
When you think about all of the industries that you mentioned, you talk about scooters, ridesharing, car-sharing – at the end of the day, they are all assets, right? And, we see today that almost all of these industries are talking a lot about utilization and asking how can we become more profitable?
That’s where we step in because we believe there is a need to look at demand in a different way. You have a lot of data out there that if you utilize in the right way, you have a better chance to meet supply whether you’re operating car sharing, scooters, ride-sharing and more.
So, I think when you look at the technological aspect of these industries, they all have the same challenges. Yes, the front end may look different, the user stories might be different, but the challenges are the same. These are the areas that we are solving for all of these industries.
Marco Annunziata: So, we understand that what you do generally is fleet optimization and we understand that you saw an opportunity with new utilization of data, but what is it exactly that you do? How do you optimize the fleets and how do you make money by doing that?
Israel Duanis: We’re helping our customers, which among them you can find top tier automakers, car companies, and public transportation operators, to better understand their demand.
Understanding demand has to do, first of all, with leveraging all the data sources that affect your demand. It could be traffic, weather, sometimes even hotel occupancy.
So, you first need to collect all that data and we help to do that.
Then you need to crunch the data and turn that into insights and we help our customers turn these insights into actions and the actions are basically meeting the demand for their services.
This allows fleet operators to be proactive. being proactive means giving the right amount of vehicles, dispatching them in the right way, positioning them in the right way, handing them out to maintenance in times that demand for the services is low and more. We believe that by choosing this approach and using data-driven technologies that were not available 20 or 30 years ago, companies can be much more efficient.
We already see theses industries moving to businesses models that are much more on-demand, more real-time and more personalized, so there’s also a big need for a different approach when it comes to operating a fleet.
Michael Leifman: Does the service differ if it’s a taxi company or if it’s a fleet of delivery vehicles or a fleet of e-scooters, is the basic package the same? And do you get paid in the same way?
Israel Duanis: The basic package will look the same. We consider ourselves a SaaS company, so our customers pay per usage. It’s an easy-to-deploy solution. We do see that a delivery service will act differently sometimes than transporting people from place to place. So, some packages will look the same, but sometimes there’s also a need for adjustments.
Michael Leifman: You said per usage, what’s that?
Israel Duanis: Usage will mean you pay per vehicle. If you’d look at how customers have often paid in the past for fleet management, you usually find that they pay per vehicle. So, we’re not changing the way our customers are paying. We really want to keep the deployment of our platform easy to use.
Easy to use is not only the way that you technically deploy the platform, but it’s also how you go for procurement and how easy this is to partner with.
Turning Insights into Action
Marco Annunziata: So, Israel, you mentioned that insights you give to your customers allow them to deploy the vehicles and have them ready closer to where the demand is. I’m curious to dig a bit more into the sources of data.
You’ve mentioned not just the plastic data but also data like hotel occupancy rates, like flights – which I suppose helps, for example, car rental companies to have enough cars ready near airports when there is a need. Can you tell us a bit more in detail, where do you get the data? What are the sources, whether you also get data from the vehicle themselves?
Israel Duanis: Yeah sure. Data is a very important thing in our industry and as we said, our business model is not about monetizing data, it’s about selling licenses. But when you look at the data sources, you can say there are a few layers.
The first layer is public data. Data that you can find out there that comes through traffic, weather and things like that. It’s just a big challenge of how to choose the right public providers and as you can imagine, there’s a lot of data out there. So, how do you know what’s the most reliable one? How does it change from region to region? It’s not only collecting the data, but it’s also about taking the right insights from that data.
On top of that sometimes we partner with additional data providers because not all data is available. So, we have data providers that can fill in some of the layers that are missing in some cities.
And then there’s the third layer and that comes from our customers.
Our customers can say okay let’s look and try to understand what the patterns of demand for our service are in a certain location or a segment of customers, and then it’s basically their data. So, its finding patterns in their data, but they own the data it’s theirs. When you combine the public data and the customer’s data, you find some very, very interesting insights.
I think it’s important to mention that we’re not just about the insights. We are helping our customers take action. So, insight is only one of the benefits that you can get by using our platform, but at the end of the day, we believe that if you cannot connect this insight into action, then the insight is not very valuable.
Preparing for Autonomous Vehicles
Marco Annunziata: And so, does part of the package include some sort of automation on the customer’s side? I don’t know if there is an autonomous vehicle in the fleet. Will it get a message instantly to re-route or to use this opportunity to get maintenance or is there a requirement for the immediacy of human action on the other end once the instruction or the insight is received so that the action is taken?
Israel Duanis: We are building our IP in a way that will suit automation. I mean, the vision of our company is to eventually provide an operating system for autonomous entities. That’s why every building block that we’re building today, needs to meet requirements of also doing everything automatically.
The thing is that we can debate when exactly the autonomous era will be here and fully deployed. In addition, there is also a scenario where customers won’t always want to have full automation right? They might still want to be in control. So we’re also keeping the ability for a human operator to be in the loop.
Michael Leifman: Okay that makes sense. So, there’s something particularly interesting in the way you’re framing this I think, in that you’re designing an offering for a macro-environment that’s not fully built out. I don’t know if when you say full autonomy that’s level three or level four, but let’s assume it’s all the way and as you said, it’s not here yet. So how do you do your planning? Do you do your financial modeling around that assumption of whatever will happen in 2020 or 2025?
Israel Duanis: We are aware of the timelines. I think all of us here will be very surprised if we’ll see everything fully autonomous by 2020 or even 2025, I mean I’ll be happy if that happens, but we’ll be surprised. I think we have a good understanding of what will happen in the coming years though, so we’re able to make sure that our road map and technology fit there.
For example, our routing system is a turn-by-turn navigation system that assumes you don’t really have a driver. Because one of the things that will be very important in the autonomous era is replacing our own best practices. We know when we have events in the city and what roads we should avoid and we know a lot of similar things that we take into action when we drive. Now, imagine when having no drivers, you will have to automate managing the vehicles idle time as well. Because taking me home is easy but what would a driver do once I’m home?
This is only one example of the way that we are approaching fleet management. We’re here to provide value today, but we’re also making sure that we are ready to provide value once autonomy is here.
Marco Annunziata: You mentioned at the beginning that what drove you to start this venture is the realization of traffic problems in Tel Aviv and how the limits to mobility actually impact our lives. You’re also saying now that as autonomous vehicles become more widespread, Fleetonomy will be able to add more value, but also the Fleetonomy technology will impact the way in which autonomous vehicles are deployed.
So, the question is, are you involved in discussions with CTO authorities in Tel Aviv or elsewhere in relation to both the current impact on mobility and also prospects for autonomous vehicles being adopted more quickly?
Israel Duanis: When we think about autonomy, there are a lot of players like fleet managers and automakers that need to succeed together in order for us to enjoy the full potential. So we see ourselves as an integral part of this revolution.
And, as you said, it also has to do with regulators or cities or states. So yes, we’re in discussions with all the players and they all have different takes.
For instance, I just recently read something about an interesting pilot of e-scooters in a certain city. Some cities don’t want to have scooters yet, right? Then you see a different approach which says, look, a change is happening so let’s try and understand it, let’s pilot it and work with the operators and the software providers. So, I think there are a lot of players here with different approaches. I think the approach that each and every player will choose is crucial for how quickly they’ll be able to complete this transition.
Urban Mobility and Data Privacy
Marco Annunziata: Do the cities, based on your experience, seem to be further ahead in the process or any best practices you already identified that you think should be adopted more widely?
Israel Duanis: What we’ve seen in Phoenix in the past few years had a very big impact, not for regulation, but it also brought Waymo there and it brings businesses and it can create a large ecosystem that sparks out of a few decisions made by a city and state.
So, we do see some of the cities that we’re operating in whether it be in Europe or in the United States that are very progressed and are willing to take the chance, and some are not. I mean I don’t want to mention those that are not because we’re trying to be positive here, but for example, I can tell that Tel Aviv is really changing…
Michael Leifman: What do they rhyme with?
Israel Duanis: Bell Aviv! kidding.
In Tel Aviv, there’s actually been a big change and we’re seeing that. Half of my employees here come to work on e-scooters. So, I’m optimistic.
Michael Leifman: Yeah, there are a few reasons why cities are hesitant. One of them is simply people’s fear of autonomy generally and fear of robots. But the second or one of the other reasons why cities are unsure of whether or not to embrace this new trend has less to do with fear of ‘robots gone wild’, and more to do with traffic management and fear of continued urban sprawl.
I think it’s interesting in some sense that your coming at this from an angle, not of providing the car but of managing the fleet and optimizing the fleet and in a way I think that can serve to alleviate some cities fears and I think that theoretically there’s a way to make a case to a city or a regional planner and say, say look – we understand that this could create more sprawl, but in fact if you’ve got fleet management, that’s either a hedge against that option or in fact it’s a way to produce the opposite effect. It’s a way to produce a less traffic intensive region. Do you think I’m right? And if yes, is that an approach you’ve taken?
Israel Duanis: I think you’re completely right. I mean I totally agree with what you just said and if you’d look at the past few years with Lyft and Uber in cities. In the beginning, everything was great. Some people said it will even reduce congestion but if you talk today with people of the city municipality, I think most of them will say there’s still a growing need for the services.
I’ve used Uber and Lyft a lot and it’s a really good way to move from place to place, but in some cities, it just brought more vehicles into the city. So now cities understand that the market is educated or most of the market is educated and now we make sure that also the city itself is safe and that transportation is working correctly.
Michael Leifman: Following the same line – have you reached out to or have you – are there prospective customers or actual customers that are city transit agencies? I know that bus management is a huge deal and there’s the stock that particularly for last-mile problems integrating fleet management and autonomy solutions into mass transit.
Israel Duanis: Yeah, that’s also an area that we’re operating in. It’s not only the bus operators but the train operators as well. I mean, if you’d ask public transport authorities how they used to think about the future of the coming years, they would not tell you that its only fixed routes or it’s only our dynamic routes, they’d say it’s a combination.Also, some of the fixed routes are okay and work. So, we want these routes to be in place but there’s a question of what do we do with the last mile?
So, it’s also a very, very interesting industry, I mean as a start-up we always need to think of the wide span of customers and industries that we can approach. We also need to think about the selling cycle. Working with the operators or automakers, I think it’s also interesting to see the selling cycle getting shorter because they understand that there’s a big need.
Marco Annunziata: On this topic actually can you help us think through the impact on automakers because one argument could be that as you improve the efficiency of fleet utilization, actually what this does is helping to provide more mobility services with a given stock of vehicles, which is as we argued earlier – one implication or a possible negative implication is having those vehicles more often on the roads. As a result, you might create more congestion, but also if you’re utilizing the capacity of the existing fleet better, you could argue you need fewer vehicles, so does that have a negative impact on automakers?
Israel Duanis: I can tell from what we are experiencing today that automakers understand that if they want to be relevant in the coming 10 – 20 years, they need to embrace the change and to be part of it, and I think it’s really healthy for them as companies. You can find today a lot of automakers that are already operating services. Some of them can be ride-sharing, some can be rent subscription. You can see today a lot of new ways for them to say – we also want to provide services.
Michael Leifman: I want to go back to the question of data before, Marco was asking how you collected data, I’m interested in who owns the data, what do the customers get to do with the data? What do you get to do with their data? There’s this Harvard Professor Shoshana Zuboff who has got a book out right now called – The Age of Surveillance Capitalism or something like that and she’s written about these issues before, but this book is getting some press recently and it’s about the power in her view, unwarranted of the big data-gathering companies.
What do you do with the data? What are you allowed to do? What do your customers know you do? How does that work?
Israel Duanis: For us, data is a tool that helps us build demand prediction models and other capabilities that serve our customers and we do so while meeting GDPR data regulations. So, I think it’s easier for us not to even deal with the data challenges because that’s not our monetization channel. We’re selling insight capabilities and data-based actions and our customers are fully transparent with their data. So, we feel pretty comfortable with the question of who owns the data.
Michael Leifman: Got it okay. That’s an easy answer.
Marco Annunziata: I fully take your point Israel that you’re not selling data, you’re selling software as a service, so your business model is immune from the privacy and data sensitivity issues but I’m now envisioning this future where once we have autonomous vehicles and so providers of the service – of the mobility service, can distract me from driving, because I’m not driving, I’m just sitting in the vehicles and they know a lot about me. Then there will be a big market for providing advertising within the vehicle and then having information about my preferences, my behavior where again you use these avenues to target advertising to me. So, I think it’s going to be interesting to see how some of these issues play out, again having fully understood and fully acknowledged that this is not something that has an impact on your business model.
Israel Duanis: When I think about my phone or about the car that will drive me, we are already exposed to a lot today. So I think that there’s a broader question here.
It does not only have to do with autonomous or not, but it also has to do with the way that we live today. So, the way I see it, if we have a problem with that, then I agree that there are a lot of questions we need to ask ourselves about the market, with having ads being pushed into our screens, in our vehicle, I think you have these problems already today. So, I don’t want anyone to wait for autonomous cars to solve these issues, because they need to be addressed.
Marco Annunziata: Let’s switch back for a sec to Fleetonomy itself, if I’m not mistaken the company is about three years old. How big is the team right now and any key learning’s, lessons that you’ve taken from the growth of the company so far?
Israel Duanis: Our team is about 15 people and growing. On the business side, I think it’s important to bring in the right people to join. I think that building a company is something that is super exciting. We have good days, we have bad days and I think once you make sure you have the most professional people and also the right vibe around you, that makes it an incredible ride. So, it might sound trivial to just surround yourself with good people, but I think that’s priceless.
Marco Annunziata: That’s a mistake I made with Michael.
Michael Leifman: Well played.
Israel Duanis: Yeah so for your next startup Marco – do your homework 🙂
But yeah, when it comes to people it’s important, and I think it’s also about choosing the industry. I was lucky to choose an industry with an impact that is really transforming the world.
So if you can choose the industry and the product that you’re building, focus on an area that you think is good for the world. That might sound trivial, but as an entrepreneur, you have a lot of options, some of them are better and some of them do not always create a lot of good for the world and I think it’s a very important thing when you make that decision.
Michael Leifman: We’ve got a couple of minutes left. Look ahead 20 years and where do you see mobility? Where do you see fleet management? Where do you see Fleetonomy?
Israel Duanis: When we imagine cars on the road today, we imagine people driving their own vehicles right. Now imagine the same people getting around in cars but take away all of the drivers. Sounds pretty chaotic right? How do the cars know where to go? Which tasks do they take care of? What will happen with the car once the rider reaches their destination? And in a world where cars drive themselves and are held by large fleet operators, you need some sort of a smart operation center and that center will tell each vehicle where it’s going and officially handle all the different variables in real-time.
In 20 years, imagine an autonomous vehicle will take care of all of the day-to-day tasks that we have to do ourselves today, like going to work, delivering groceries, even picking up our kids from school. However, sometimes the same vehicle that might take us to work in the morning will be allocated to deliver lunch to the office later in the day. So, some cars might be multipurpose and to manage this enormous fleets of autonomous vehicles, you need an automated operation center that will manage huge fleets of automated vehicles.
Michael Leifman: I was kind of hoping you’d say something about managing fleets of flying cars but you didn’t go there. No?
Israel Duanis: Flying cars are a subject for a whole new discussion.
Michael Leifman: Okay well listen thank you, this has been great and really interesting, so thank you for speaking to us. Before you tune out, you please, please, please forward this episode to someone you think will enjoy it. Share it on social. Help us spread the word, and as always – thanks for being curious.