We ride around San Francisco for about 25 minutes. The two and a half mile trip takes us through Chinatown and North Beach, two of San Francisco’s hilliest and densest neighbourhoods.

I get in the car, and away we go. To comply with California regulations there is a person riding in the front seat with his hands hovering about an inch above the steering wheel. In the front passenger seat there is also a software analyst monitoring the environment and surroundings. And in the back cabin alongside me is a company marketing representative, outlining the experience Zoox hopes to provide its customers, and also making sure I don’t take any photos.

These test vehicles, which are fitted out with multiple cameras and tiny sensors, have been roaming sections of the Bay City for nearly two years now. They have clocked up and recorded tens of thousands of miles ahead of a planned launch of a commercial service by Zoox in 2020.

So far, it’s an unremarkable chain of events for this day and age. Except for one thing: nobody is driving the vehicle. The car is a ‘test mule’ for Zoox, the self-driving start-up that was co-founded by Melbourne entrepreneur Tim Kentley-Klay, and backed by some heavyweight Australian investors - most notably Atlassian billionaire Mike Cannon-Brookes.

Iam standing outside a nondescript office complex on a street corner in San Francisco, about a block away from the well-known Fisherman’s Wharf tourist attraction. I need to get to a meeting across town, so I open an app on an iPhone I’m holding and request a car to pick me up. Moments later, a metallic black Toyota Highlander SUV turns the corner and pulls up beside me.

The company's goal is to develop fleets of robo-taxis that will permanently roam the streets in cities like San Fransisco in the not too distant future. UBS estimates that market will be worth $US2 trillion ($2.86 trillion) by 2030. But even if it succeeds Zoox will face stiff competition from the world's biggest tech companies, and established automakers for a slice of this money.

There has always been something outlandish, unbelievable, about this company and its enormous goals.

The trip is scenic and pleasant and would be completely run of the mill if it weren’t for the fact that this vehicle was driving itself. And, while unqualified to be too declarative in any judgment, I am left with the impression that Zoox’s vaunted technology justifies the hype.

But the vehicle still slows down to a halt. It seems unduly cautious, but that is the way things need to be if Zoox is going to realise its goals.

At another point, the software powering the vehicle recognises a person on the sidewalk. This person is not about to cross the road - my human eyes can see this - he is merely getting something out of his car.

Scevak was stuck by Kentley-Klay's vision for a radical re-imagining of the automobile. Over the ensuing months, he tracked Kentley-Klay’s progress as he moved to California and linked up with Jesse Levinson, a Stanford PhD in computer science who happens to be the son of Apple chairman Arthur Levinson.

For all intents and purposes the Zoox story begins in 2014. That year, Niki Scevak, the co-founder of the Sydney-based tech investment firm Blackbird Ventures was introduced to animator Tim Kentley (who would later add the Klay suffix to his name) by a mutual acquaintance in Melbourne.

And why are investors - highly respected ones, no less - clamouring to give it hundreds of millions of dollars to pull that off? A ride in the test mule, and a visit to its manufacturing plant 50 kilometres south in Silicon Valley, provides some answers.

There has always been something outlandish, unbelievable, about this company and its enormous goals. Why would the head of an animation studio in Melbourne, with apparently no experience in software or robotics, be behind an effort to develop a complete reimagining of the car, from the ground up?

Scepticism has encircled Zoox from the moment it was founded. And following some notably nefarious start-up implosions in the US, and the company's own speed bumps, it continues to linger.

It built its first prototypes, tested them extensively on private roads, and then got its test mules on the streets of San Francisco. The company emerged from stealth mode, Kentley-Klay began to speak publicly about his vision for a self-driving vehicle: not a car, but something that succeeds the car, in the same way the automobile replaced the horse and carriage.

Over the next four years, Zoox refined its vision for a fleet of autonomous, electric-powered vehicles with no steering wheel, capable of moving in both directions, available for hire through an Uber style ride-hailing app.

There was little pushback from Blackbird’s own backers over the investment, with one glaring exception: Cannon-Brookes, a university friend of Scevak’s who’d put money into Blackbird’s first fund, was lukewarm on the idea.

“On the face of it, we are investing in a months-old company at an astronomical valuation that is competing against Google, Tesla and the world’s largest automotive companies,” Scevak wrote to his investors at the time. “On the other hand, the company has one of the grandest ambitions we’ve seen, fascinating insights into how to bring that vision to reality and an extremely high quality team that have created some of the largest breakthroughs in autonomous vehicles."

The company has one of the grandest ambitions we’ve seen.

Blackbird, barely a year old itself at the time, was set up to invest in software businesses. But venture capital investing is about hitting home runs, and Scevak was convinced that Kentley-Klay’s idea at least had the potential to be an enormous success. So in 2014, when Kentley-Klay and Levinson formed Zoox and raised $US2 million in seed capital, Blackbird tipped in $US500,000.

The ouster seemed to catch everyone from Australia who was connected to the company by surprise.

The enormous funding round seemed to set Zoox up nicely for its next phase of growth, giving Kentley-Klay and his cohorts $US500 million to play with, and valuing the company at $US3 billion. But only a couple of weeks after the deal closed there was another big twist: Kentley-Klay was abruptly removed as CEO.

His message for the sceptics? "It’s easy to be sceptical about people who are attempting something incredibly ambitious. They are not unfounded, but I believe they will be proven wrong."

"This is still the most ambitious company I have ever been associated with. This is a crazily challenging thing they are trying to do. "

That was nearly a year ago now, and Cannon-Brookes says his belief in Zoox's potential has not wavered. “Absolutely as bullish now, if not probably more, than I was at that point,” he says.

The Zoox hype began to build, and Cannon-Brookes’ belief in the company strengthened dramatically. When Zoox went on to raise its second major round of financing (in a deal first reported by this newspaper ) the billionaire put $100 million of his own money in and joined the company’s board.

And it clearly shocked the man himself. In a series of tweets in the hours after his firing, Kentley-Klay bemoaned “Silicon Valley up to its worst tricks” and claimed “the board chose a path of fear, optimising for a little money in hand at the expense of profound progress for the universe".

Kentley-Klay declined to comment for this story. His departure from Zoox remains largely unexplained. Sources say he is now at peace with the situation. And with his personal wealth, on paper, estimated at over $1 billion, few could blame him.

The Camberwell Grammar and Swinburne University graduate is no longer on the Zoox board, but remains a significant shareholder in the business.

Tim Kentley-Klay, and Jesse Levinson in a Zoox prototype in 2017 Credit:Shaughn and John

Cannon-Brookes is quick to praise him.

“The company doesn’t get through its first four years without Tim, he did an amazing job,” he says.

“It’s a hard set of circumstances. He remains and will always be a co-founder and will be justifiably proud of the result, whatever that turns out to be.”

Aicha Evans, a respected tech industry veteran who previously served as the chief strategy officer of chipmaker Intel, was brought in to be his replacement.

Aicha Evans was appointed the new Zoox CEO. Credit:Chip Holley

Kentley-Klay messaged her to offer congratulations soon after her appointment.“I thought that was very classy,” she says.

“His vision is amazing. It is complete. It is well thought out. You will not find a single person in this building who thinks otherwise. We would not be here without him.”

Evans' appointment was widely applauded in Silicon Valley. The futuristic vehicle Zoox is secretly developing may not have a steering wheel, but there is a widespread belief in the industry that in Evans, the company is in safe hands.

The 'biggest dance' in business

Kentley-Klay's presence is still quite literally seen inside the company. He regularly pops up in the photo collages that serve as screensavers on the TVs inside meeting rooms in its Foster City headquarters.

The company now employs more than 850 people - many of them hardware engineers working on physical prototypes, and software developers working on the artificial intelligence that powers them.

Zoox is in the process of developing its sixth prototype, the VH6 ('VH' being a reference to the vaporware horseshit barb directed at the company in its infancy), which is scheduled to hit the roads next year.

The first five prototypes (VH1 through VH5) all looked like futuristic dune buggies - markedly different to the test vehicles on the roads in San Fransisco. The VH6 hasn't been seen publicly yet. What we do know, though, is that it will be a 'Level 5' autonomous vehicle. That is, a vehicle capable of driving itself in all conditions and situations, that in theory will not require any human involvement.

Some people say this is a $10 trillion industry, some say it’s a two to three trillion dollar industry. But any time there is a T, it’s not a winner takes all market. Aicha Evans, Zoox CEO

The self-driving car landscape is intensely competitive and involves some of the world’s most deep pocketed companies. "One of the biggest dances in the world," is how Cannon-Brookes describes it. "We are in a leading position."

Waymo, which is owned by Google’s parent company Alphabet, is considered by many to be the market leader, having clocked up more miles on California roads than anyone else. It also launched a pilot commercial service in Phoenix, Arizona, earlier this year using 'Level 4' technology, and vehicles built by Jaguar and Chrysler. The service has since been extended to parts of California.

Zoox's prototype looks like a dune buggy.

Cruise Automation, which was acquired by General Motors for $US1 billion in 2016 and also recently secured investment from Honda, is considered the other key contender. Tech giants such as Apple and Amazon, not to mention Uber and Tesla, have all invested significant sums into self-driving technology. Traditional automakers such as Ford are also in the mix.

For her part, Evans is undaunted by the competitive environment. “It’s reassuring,” she says. “ It means we are pursuing the right thing.”

Many tech industries have ended up winner takes all markets, but the autonomous vehicle landscape is unlikely to play out that way, Evans says.

Steve Mahan, who is blind, stands by the Waymo driverless car during a Google event, Credit:ERIC RISBERG

“Some people say this is a $10 trillion industry, some say it’s a two to three trillion dollar industry. But any time there is a T, it’s not a winner takes all market,” she says. “The invisible hand of Adam Smith doesn’t allow it. If you look at history, it is usually three to five or more players, so we just have to be one of those."

Waymo and Cruise's technologies will operate on vehicles built by established automakers. In contrast Zoox is pursuing a 'full stack' approach, building its own vehicles from scratch, as well as the software that powers them.

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Manufacturing a vehicle from scratch is not easy - just look at the challenges Tesla has encountered. Yet Zoox and its backers are convinced it is the best approach. "It sounds crazy but it's actually the most non-crazy version of it, the alternative is much crazier," says Scevak.

"Are you really going to have a better chance by chewing off one piece, putting your eggs in someone else's basket by trying to partner with giant automotive companies who move at a glacial pace and make all these compromises?"

Waymo executives have also publicly questioned whether a fully autonomous vehicle is a realistic short-term goal. Again, Zoox disagrees. “We are truly absolutely wedded to the belief that it is going to be very difficult to solve autonomy in commercial ways that is accepted by the public without an L5 vehicle," says Evans. "We are not doing the vehicle because we feel like it.”

Analysts believe the economics of operating a commercial fleet of robo-taxis could be highly attractive. UBS, for example, recently estimated that the existing fleet of taxis in New York could be reduced by two thirds once vehicles become fully autonomous.

In other words, to operate a commercial service in a big, densely populated city, Zoox will not need to build a mass market product, or anywhere near as many cars as Tesla is scrambling to produce. Some estimates suggest the company could service a city like San Francisco with just a couple of thousand vehicles.

UBS estimates that in a self-driving world, taxi fares could fall by as much as 80 per cent, with fleet owners still generating healthy profit margins of up to 40 per cent.

This equation has Zoox investors salivating. The company is not currently generating a cent of revenue, but they believe it will eventually be a cash machine "That is really the big moment of the industry, when there is no driver in the vehicle," says Scevak. "Ride-hailing suddenly becomes a viable business...and at that point, it's really quite a silly proposition to own a car."

The road ahead

But before that happens, there's just the small matter of ensuring the technology works.

Many technologists believe autonomous vehicles will be safer than cars driven by humans, which cause millions of fatalities around the world each year. The challenge is convincing regulators of that.

Cannon-Brookes enthuses about the progress the company has made on the tech front since he joined the board - noting it is testing its cars in more difficult conditions and situations than any of its rivals. But he acknowledges steep challenges remain.

"It's now relatively easy to solve the first 80 per cent of the [autonomous mobility] problem," he says. "It's harder to solve the next 19 per cent of the problem. It is brutally, incredibly difficult to solve the last 1 per cent. Your error rate has to be incredibly low, an order of magnitude lower than human drivers."

Evans doesn’t shy away from the fact that the company will still need to raise more capital - and a lot of it - to fulfil its goals. “We are trying to do something extraordinary. Obviously it requires capital, and funding. Show me anybody in our space who is not requiring capital,” she says.

She won't rule out investment from a strategic investor - that is a tech company or automaker. "We are very open to strategic partners," she says.

"[But] we have to be aligned philosophically." That is significant, since a corporate investor was reputedly a sticking point in the last funding round, and Kentley-Klay's departure.

Even with the departure of Kentley-Klay , Zoox remains the most radical, audacious business experiment involving big name Australians. Blackbird, which is now considered one of the nation’s pre-eminent venture capital funds, has a lot riding on the company financially and reputationally.

Scevak openly acknowledges that this is a swing for the fences. "No one, not even Zoox, knows where the finish line is, because this is truly pioneering work."

Cannon-Brookes also has a lot on the line. This is his big 'moonshot' play, and while he will continue to make other high risk investments in areas close to his heart like climate change and sustainability, he says he won't be joining any other corporate boards.

"We are giving it our best shot," he says. "I wouldn’t be there if I didn’t think there was a good possibility of success. But I’m not gonna tell you it’s 100 per cent. We are working our asses off to ensure it's as close to that as we can get."