Startup Embark partners with AB InBev, Werner Enterprises to test driverless truck technology

Embark Co-Founder & CEO Alex Rodrigues joins Yahoo Finance Live to discuss the launch of Embark Universal.

Video transcript

ZACK GUZMAN: Welcome back to Yahoo Finance Live. As America's truck driver shortage continues to drag on, self-driving trucks are becoming less of a cool tech gadget to show off and more of a necessity. And there are a few companies out there working on that technology right now, including one in Embark, already operating one of the world's largest trucking routes and now partnering with beer giant AB InBev and logistics and shipping company Werner Enterprises to work through rolling out that technology.

And for more on the way that that's going, I want to bring on Alex Rodrigues. The co-founder and CEO of Embark joins us right now. And Alex, good to be chatting with you, man. I mean, as I said, there's a lot of companies working on this, but just seeing the way that your guys' technology is working right now, very interesting and the way you guys are also kind of trying to set up a software as a service type model in the trucking space. So talk to me about how quickly this space is advancing and what you guys are doing right now to make sure it gets out there on the road.

ALEX RODRIGUES: Yeah, absolutely. Thanks for having me. We're really excited to be announcing the partner development program today, which is that program with ABI, as well as Werner and a number of other top 25 carriers, where we're taking self-driving truck technology from a proof of concept to commercialization.

And so, we see this as the first AV-- meaning Autonomous Vehicle-- trucking company to commit to a specific business model, where we're focusing on partnering directly with carriers. And that allows us to do what we're good at, which is building software. And we think that's the right way to actually bring this to the market and commercialize it over the coming years.

AKIKO FUJITA: Alex, what does this mean from an adoption standpoint? If we're talking about building this to scale so it's not just, like you said, proof of concept, how quickly do you see this scaling up?

ALEX RODRIGUES: Yeah, we see this business model as really allowing scale to happen very rapidly. It leverages the existing expertise that the carriers have in operating these large operationally intensive fleets. And it leverages their existing relationships with shippers to allow this technology to scale up very rapidly. And so we see this as, really, a key lever that unlocks self-driving tech technology, not just for one or two players in the near term, but really, across the logistics ecosystem.

ZACK GUZMAN: Yeah because there's a couple of different ways to go about it, right? You could build the technology and put it into one of the major OEMs and go that route. Or you can create kind of the technology and attach it to existing trucks, which just sounds like what you guys do. And really, I think whenever we talk about self-driving technology, people get mad because it always takes longer than they want in terms of actually getting out there on the road.

But interesting to kind of see the way that the industry is basically using it on the long trucking routes and then having a real human take over for those kind of last mile deliveries. Is that-- how long is it going to be with that kind of model in place? Or is that just kind of the way it should be to keep truckers involved in that last mile process? I mean, how does that evolution look like?

ALEX RODRIGUES: Yeah, well, I'll say, a lot of different players have looked at self-driving different ways. But Embark has known that this model with trucking and transfer hubs is the right way to bring it to market ever since the beginning. We're the longest running company operating and testing self-driving trucks in the world.

And so we've been doing this for a long time. And we feel that the transfer hub model where you continue to leverage human drivers, who are working locally, doing that first and last mile, will always be the right way to bring this technology to market. There's a lot more to interfacing with the customer than just driving in a city. And so, we really see breaking out between that driving in between cities, where driverless trucks and that technology is really ready today, and then having a local driver who can do that pick-up and drop-off.

AKIKO FUJITA: Having said that, the truck driver shortage, something that's been well documented over the last few years, a lot of it driven by demographics with more and more aging drivers sort of aging out and not necessarily being able to find the replacements. To what extent do you think autonomous trucks can replace the drivers themselves? I mean, you were talking about short haul versus long haul. But what about the entire stack?

ALEX RODRIGUES: Yeah, we see autonomous trucks as being able to address the driver shortage in two ways. First off, we allow drivers to have more leverage on their labor by doing a local run and then that local run carrying into a driverless run that can go much further than they would have been able to do in a single day. And so we see getting a lot more leverage and value out of the drivers that are in the industry.

And then the second part is creating the jobs for the next generation of trucker. And you mentioned pretty clear understanding of the demographic problems the trucking industry is facing today. We believe that by delivering vehicles that take-- that allow people to work in their home city, sleep in their own bed, that will allow the trucking industry to begin attracting a younger demographic and making sure they have a long-term labor pool.

AKIKO FUJITA: What does this mean from a cost perspective? Some of these companies that you've already partnered with, if they were to go with this technology, cut out the driver per se, is there a cost savings here? Or is the upfront technology still not to scale and still a costly investment upfront?

ALEX RODRIGUES: Yeah, the reason our partners are excited about it certainly is that this is a more efficient way to move freight. It's also a way that allows us to achieve a lot of the other key goals that shippers and carriers have. So, you can drive 24 hours a day. You're not limited by the hours of service. These vehicles are more environmentally friendly. They drive at the right speed, and they drive smoothly.

And it's a more reliable way to deliver freight because you have, again, sort of no limitations on when you can drive. You can drive at night. And so, we see this as it is definitely more efficient, but it's also faster. It's more environmentally friendly. It's safer. It really hits a lot of the boxes for what the future of the logistics industry needs to look like.

AKIKO FUJITA: Embark co-founder and CEO, Alex Rodrigues, it's good to talk to you today. Appreciate your time.