Bailey Hausmann said to me,
“I’d like to exchange it for 10 percent of CarOS’s shares.”
Is that a 3 to 1 ratio?
If Iber’s corporate value is $80 billion, then CarOS’s value is $240 billion. This is more than 10 percent higher than the exchange ratio with Seosung Electronics.
Even if Seosung Electronics exercises its appraisal rights, we hold 71.5 percent of CarOS’s shares. Therefore, even if our shares decrease by 10 percent, there won’t be a significant problem.
On the other hand, securing 30 percent of Iber’s shares and becoming the largest shareholder is quite attractive.
Receiving an offer like this made me realize how important a position we hold in this market.
Taek-gyu looked at me, as if asking if this wasn’t a pretty good offer.
I thought about it calmly.
The reason I agreed to the share swap with Seosung Electronics was that the electronic devices produced by Seosung Electronics were essential for the mass production of self-driving cars.
So, how would Iber help us?
Iber has already secured a large number of drivers and passengers and has accumulated various data from around the world.
By utilizing that data, they can predict congestion levels and demand at specific times and appropriately match drivers and passengers.
This is a significant advantage compared to latecomers.
As the sharing economy market continues to grow, future growth is also expected.
However, the outlook isn’t entirely rosy. In the US, a latecomer, Lyft, is catching up, and in China and Southeast Asia, they have withdrawn due to competition from local companies like Didi Chuxing and Grab, respectively.
Market competition is intensifying, and losses continue to increase. In addition, various accidents and regulations in different countries are also a headache.
Recently, an incident occurred in the US where an Iber driver murdered a female passenger, which became a major issue, and CEO Hausmann had to apologize personally. (In fact, similar crimes happen frequently with taxis as well.) And in some countries, lawsuits are ongoing regarding the legality of paid passenger transportation.
What can solve these problems at once is driverless cars.
The largest expense for Iber is the payments to drivers. If they operate driverless cars directly, there’s no need to pay drivers, which increases profits accordingly.
Therefore, Iber has been focusing on developing autonomous driving technology, aiming to transport passengers in driverless cars within three years, and was once called one of the top three leading companies in Silicon Valley for autonomous driving along with Gooble and Tesla. (Interestingly, one is an IT company, one is a car company, and one is a ride-sharing service company.)
But now, CarOS is leading the way by successfully mass-producing self-driving cars. Is their judgment that it’s better to form an alliance since it’s difficult to close the technology gap immediately?
“I understand you’ll need time to think about it, so you can give me your answer later.”
“You’ve come all this way, so I’ll give you my answer now.”
I shook my head and continued.
“I’m sorry, but I will have to decline your offer.”
His eyes flickered slightly, seemingly taken aback by the unexpected answer.
“Are you not satisfied with the conditions?”
“I think the conditions are good enough. It’s just that I don’t think it’s necessary.”
If he had come to me with a similar proposal six months ago, I would have gladly accepted it. But the situation is a bit different now.
We have already created self-driving cars and released them to the market, and the response has been explosive.
CarOS’s AD1 and AD2 sold out as soon as they were produced. Dealerships that couldn’t secure inventory were in a frenzy, and some consumers even came directly to the factory on the release date to receive their cars as quickly as possible.
CarOS is collecting driving data from hundreds of thousands of vehicles and correcting various errors that occur during autonomous driving.
The goal is perfect autonomous driving… that is, the development of driverless cars.
For ride-sharing services, the key is to properly match drivers with vehicles and passengers.
However, once driverless cars become commercially available, there’s no need to secure drivers. You just need to put the cars on the road.
The data Iber has accumulated for nearly 10 years is a significant strength, but we are already collecting various data through the hundreds of thousands of self-driving cars on the road.
Except for the initial investment, the only cost is the fuel, so we can lower the fares to less than half of what they are now.
If we can gain an advantage in terms of price, we can certainly take over the market from Iber.
In a situation where we can do everything ourselves, there’s no need to give away our shares to partner with them.
Hausmann said persuasively,
“There are many hurdles to overcome for driverless cars. The biggest one will be insurance.”
When a car causes an accident, the responsibility falls on the driver. That’s why drivers are required to have insurance.
Even if a self-driving car causes an accident, the driver is currently held responsible.
So, what happens in the case of a driverless car without a driver? In this case, the insurance subject changes from a person to the car itself.
“We are already in discussions about insurance with National Infinity.”
He looked clearly flustered at my words.
National Infinity is one of the top three insurance companies in the United States and a subsidiary of Berkshire Hathaway, which is run by Warren Buffett.
While there are major concerns about self-driving car accidents, the actual accident rate for autonomous driving is much lower than for human driving.
If all cars on the road were self-driving cars, accidents between cars would drop to almost zero.
If the accident rate decreases, insurance premiums will decrease, and ultimately, the profitability of the insurance industry will worsen.
Perhaps because of this, Warren Buffett originally had a negative stance on autonomous driving and driverless cars. But that has changed recently.
He actively purchased shares of Seosung Electronics and Seosung SB, and is now preparing to launch insurance for self-driving cars.
His judgment is to proactively respond if change is inevitable.
Some criticize him for changing his mind, but it’s natural to change your mind according to market changes.
Having a flexible mindset even in old age is a great strength of Warren Buffett. That’s why he has been able to maintain his position as the world’s best investor for over 50 years.
The current problem is less about insurance and more about laws and regulations.
Fortunately, this part is also likely to be resolved soon. IT companies have been lobbying politicians for a long time to legalize autonomous driving and driverless cars.
The fact that the US was the first to grant driving permits for autonomous driving and ease related regulations is thanks to that.
And CarOS has become the biggest beneficiary in the market that was created with so much effort. For other companies, it’s like they did all the work for someone else to benefit.
Hausmann gave a wry smile.
“It’s a shame, but I’ll have to be satisfied with meeting and talking today.”
“It was a pleasure meeting you as well.”
We stood up from our seats and shook hands.
Sometime in the future, when CarOS enters the market directly using driverless cars, we will become competitors.
Well, that’s business, so there’s no helping it.
***
Although it’s been a few days since Iber CEO Bailey Hausmann left, the taxi union was still protesting in front of the OTK building.
The union leader was shouting against the legalization of ride-sharing services and the release of driverless cars.
From the perspective of the taxi industry, Iber is like a sheep competing for the same pasture. But driverless cars are like a wolf, a predator.
Allowing Iber wouldn’t necessarily destroy the taxi industry. But when driverless cars come out, the job of a taxi driver itself will disappear.
Fortunately, it will take some time for driverless cars to replace taxis, but driverless trucks are just around the corner.
There are about 2 million truck drivers in the United States.
If driverless trucks are released, all of them will be unemployed.
Carlos has received permission to operate driverless cars in various states in the US and has been experimenting with truck platooning. In an experiment a few days ago, ten trucks demonstrated platooning technology without a single error.
This is possible because the trucks exchange information in real-time and accelerate and decelerate simultaneously.
Both the US and China rely heavily on truck transportation for a significant portion of their logistics. Therefore, driverless trucks will revolutionize the global logistics system.
Among the startups we have invested in, there is a logistics truck brokerage service company in China called Tenway. Founded by Xiaomin and Yao, it currently ranks second in the Chinese market after Yunmanbang.
OTK Company, which invested the earliest, is the largest shareholder, and Wechant is the second-largest shareholder. It recently attracted investment from SFT Bank and was valued at $1.9 billion.
Xiaomin went to the United States to meet with Daryl to discuss collaboration. It remains to be seen whether the Chinese government will ease related regulations.
While busy with various matters, I received a completely unexpected visitor.
A young man in his early twenties wearing a military uniform was standing in front of my front door.
He looked at my face and greeted me nervously.
“Ah, hello, Senior Kang Jin-hoo.”
“What’s the matter?”
At my question, he handed me a piece of paper.
“It’s a reserve forces training notification. Please sign here.”
“……Huh?”
“We usually contact you by email or mobile phone, but we couldn’t reach you through either, so I came here in person. If you fail to attend the second session as well, you will be reported, so please make sure to attend this time.”
The email I registered a long time ago is no longer in use. My contact number has also changed a few times.
But still, reserve forces training? Do I have to go to this?
Taek-gyu patted my shoulder and said.
“The country and its people need you, so of course you have to go. Don’t you know that social leaders should fulfill their social responsibilities?”
Since when was I a social leader? Can’t I just pay a fine and skip it?
Just as I was thinking that, the active-duty private handed over another piece of paper.
“A notification has also been issued for Oh Taek-gyu, a cohabitant.”
At that, Taek-gyu was startled.
“What? There’s one for me too?”
I patted him on the shoulder and said.
“The country needs you too. You said social leaders should fulfill their responsibilities, right? Sign it quickly.”
***
The conclusion is that even if I paid the fine, I still had to complete the training hours.
Even when I was being targeted by the regime, I didn’t think about changing my nationality. But thinking about having to go to reserve forces training suddenly made me want to call Ronald and inquire about special naturalization.
Wouldn’t that be better than receiving two nights and three days of reserve forces training?
Taek-gyu said.
“No way. An article has already been published about you going to reserve forces training.”
“Huh? Why?”
What kind of news story is that?
“I guess those tabloid reporters have nothing better to do these days.”
I opened the portal site, and there was indeed an article.
[OTK Company CEO Scheduled to Enter Reserve Forces Training Center]
[CEO Kang Jin-hoo, Did Not Attend the First Session but Will Attend the Second]
[Reserve Forces Training Center, Thoroughly Prepared for Safety Accidents]
[Even the World’s Richest Person Cannot Avoid Reserve Forces Training……]
The comments were unnecessarily enthusiastic.
-lol the reserve forces training center is going to be turned upside down.
-If something happens to Kang Jin-hoo during training, the US will be in an uproar.
-What have the drill sergeants done to deserve this?
-Wasn’t Kang Jin-hoo exempt from military service? I naturally assumed he got out of it.
-What are you talking about? He was honorably discharged from the army.
-He has so much money, why didn’t he avoid military service?
-That’s because he didn’t have money back then, so he served as an active-duty soldier. If he had to go now, he would pay to get an exemption like Lim Jin-yong.
-Is it mobilization training or local reserve training?
-Since he didn’t attend the first session, it’s probably local reserve training.
-He has over 100 trillion won in assets, and he has to go to reserve forces training!
-lol he probably earns 10 billion won a day.
-That’s ridiculous. Even for Kang Jin-hoo, earning 10 billion won a day doesn’t make sense, right?
-Yes, it makes sense. Kang Jin-hoo’s assets increase by at least 10 trillion won every year. If you calculate it, he earns 30 billion won a day.
-I’m so jealous ㅜㅜ
-Still, he has to go to reserve forces training.
-Isn’t he hiring a stand-in? I can go for him if he gives me 1 million won.
-CEO Kang Jin-hoo. I’ll go for you for only 500,000 won.
-Then I’ll do it for 450,000 won.
-Well, as an expert who has been a substitute for reserve forces training for 3 years, I can tell you the market rate is 300,000 won. Please contact me at the email below.
-Stop it, you crazy bastards!
-You think they’ll believe you if you go to the training center and say you’re Kang Jin-hoo?
