The Alphabet Inc. unit, which operates its commercial ride service in three major cities and is adding a fourth, is starting to generate significant revenue. But safety concerns persist.
Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2024/06/17/a-robotaxi-business-is-a-dream-for-elon-muskbut-already-a-reality-for-waymo/
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Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2024/06/17/a-robotaxi-business-is-a-dream-for-elon-muskbut-already-a-reality-for-waymo/
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🤖
TechTranscript
00:00Today on Forbes, a robo-taxi business is a dream for Elon Musk, but already a reality for Waymo.
00:09Every week, hundreds of Phoenix, San Francisco, and Los Angeles residents find a cheerful message in their email inboxes, saying, quote,
00:17Buckle up, you're ready to ride. Welcome to Waymo One. Get ready for your first fully autonomous ride.
00:25With that confirmation, they're off the waiting list for the largest U.S. robo-taxi service, more than 500 electric Jaguar SUVs that can drive themselves.
00:35Waymo's sensor-laden, AI-controlled fleet won't be ubiquitous in U.S. cities anytime soon, but 2024 is an inflection point for a technology that many advocates hoped would arrive years ago.
00:46After 15 years of R&D, more than $8 billion of investment, and multiple pilot programs, Waymo's robo-taxis have become a business, booking more than 50,000 rides a week in the three cities.
00:59Assuming an average fare of $20 per ride, annual revenue should top $50 million this year. It was less than $1 million in 2022, according to a PitchBook estimate, representing growth of about 1,000 percent.
01:13Even with the modest growth in the four cities in which it plans to operate by the end of 2024, Waymo could be looking at annual revenue of hundreds of millions of dollars within another year or two.
01:24Ross Gerber, CEO of Los Angeles-based wealth manager Gerber Kawasaki, an investor in Alphabet and potential self-driving rival Tesla, said, quote,
01:33Waymo is really the winner in the robo-taxi game. I never loved the Waymo model because the equipment was so obtrusive and expensive that it didn't seem scalable. But over time, I think the technology is getting so good that the equipment will be scalable at a much lower price in the next couple of years.
01:50Waymo and parent Alphabet Inc. both declined to share financial expectations, but Takedra Mawakana, co-CEO of the driverless tech company, confirms its ambitions to continue scaling up at a measured pace.
02:04She told Forbes by email, quote,
02:05Caution is understandable. Even as Waymo's ride-hailing revenue rises, U.S. safety regulators are investigating dozens of reports of its vehicles behaving erratically, though none involve injuries or fatalities.
02:29Last week, the company announced a software recall for its entire 672-vehicle fleet after a robo-taxi in Phoenix hit a telephone pole in May while attempting to pull over at low speed.
02:40But so far, it's avoided high-profile accidents, such as one in San Francisco last year when a robo-taxi operated by General Motors' Cruze unit struck and dragged a woman 20 feet, or a 2018 case in which an inattentive human safety driver in an autonomous Uber test vehicle struck and killed a pedestrian in Phoenix, ultimately ending the company's self-driving R&D program.
03:03Before its accident, Cruze had planned to launch its robo-taxi service in 10 additional cities beyond San Francisco. By contrast, Waymo is moving more gradually.
03:14It's preparing to offer commercial rides, with no human behind the wheel, later this year in Austin, but hasn't confirmed the timing for additional markets.
03:23But if it stays on the current path, avoiding significant regulatory or legal setbacks, Waymo's got a shot at becoming a lucrative AI-driven win for Alphabet, as well as the first truly successful robo-taxi effort.
03:36Waymo's slow but steady progress hasn't been exciting. It's likely years away from being highly profitable and recouping the billions of dollars needed to get it to this point.
03:46But revenue growth, a function of the size of its fleet, customer base, and operating areas within the cities it's entered, could come rapidly even if Waymo is slow to enter new urban markets.
03:58That fast growth potential is why Tesla CEO Elon Musk now wants his company to focus on adding its own robo-taxi service, even though its current driving tech, despite being called, quote, fully self-driving, can't operate in autonomous mode for extended periods without a human ready to take over.
04:16Ryan Brinkman, an equity analyst at J.P. Morgan, said in a research note last week about Tesla robo-taxis, quote, we do not expect material revenue generation, likely for years to come.
04:29For full coverage, check out Alan Onsman's piece on Forbes.com.
04:35This is Kieran Meadows from Forbes. Thanks for tuning in.
04:46Transcribed by https://otter.ai