Waymo to Launch its Driverless Car Service Next Month to Challenge Uber & Lyft
【Summary】Waymo is preparing to launch a commercial ride-hailing service in Arizona next month to rival Uber. For its new service, Waymo has plans to acquire up to 62,000 plug-in hybrid Pacifica minivans and 20,000 fully-electric Jaguar I-Pace SUVs to build out its commercial fleet over the next few years.
Waymo, the self-driving unit of parent company Alphabet, is considered to be the industry leader in the race to develop self-driving cars. Since 2009, the company has surpassed over ten million miles of driving on public roads with its fleet of self-driving vehicles. Now, Waymo is preparing to launch a commercial ride-hailing service in Arizona next month to rival Uber, people familiar with the plans told Bloomberg.
The service will not be called Waymo and will operate under a new brand name and compete directly with ride-hailing companies Uber, as well as its closest competitor Lyft. Waymo is keeping the name of the new service a tightly guarded secret until a formal announcement is made, said the person, who asked not to be identified because the plans haven't been made public.
Waymo hasn't shared and more details other than touting the safety of its driverless technology.
"Waymo has been working on self-driving technology for nearly a decade, with safety at the core of everything we do," the company said in an emailed statement to Bloomberg. The Waymo spokesperson declined to comment on the name of the new service or timing of the launch.
According to the person familiar with the program, the initial launch will begin without much fanfare. The first launch will be small, perhaps just a few hundred authorized riders in the suburbs around Phoenix.
The first group of riders will likely include participants in Waymo's Early Rider Program, which has been operating in Arizona since last year shuttling families around in Waymo's self-driving Chrysler Pacifica minivans. New customers in the Phoenix area will be gradually phased in as Waymo adds more vehicles to its fleet to ensure a balance of supply and demand.
The Early Rider Program was designed to gain valuable feedback from members of the public, so Waymo can improve its commercial service, as well as getting people comfortable being a passenger in a self-driving vehicle.
The launch of a commercial ride-hailing service will mark an end to the intense secrecy that's surrounded Waymo's program whcih began nearly ten years ago as Google's early self-driving car project.
"This positions Waymo really far ahead of everyone else," said Nick Albanese, an intelligent mobility analyst at Bloomberg New Energy Finance. "GM is the other leader, and they're probably more than a year away from doing this. It's very impressive."
Waymo's Ride-Hailing Service Could be Worth Much More Than Uber
Waymo service is expected to draw riders away from Uber and Lyft, giving the ride-hailing companies some serious competition for the first time in their short histories. Uber is the world's most valuable private company with a valuation of up to $120 billion and is planning its long-awaited IPO next year.
According to an analysis by six Morgan Stanley analysts in August, Waymo's service could be worth much more than Uber. The analysts said that the ride-hailing service is already worth about $80 billion, even before its official launch. Other analysts have estimated Waymo's valuation up to $150 billion.
When Waymo starts its commercial program, there will be backup drivers behind the wheel to take over if necessary, according to the person familiar with the plans. However, the backup drivers are won't have much work to do. The fleet of autonomous Chrysler Pacifica minivans will drive without intervention more than 99.9 percent of the time, based on data from Waymo's test program submitted to California regulators.
Waymo's plan is to gradually expand to other cities across the U.S. It will be a carefully planned, cautious rollout to avoid the bad customer experiences and avoidable crashes that could set the program back by years, as was the case with Uber, when one of its autonomous vehicles fatally struck a pedestrian in Arizona in March.
Waymo CEO John Krafcik & Ralf Speth, Jaguar Land Rover CEO, announce the Jaguar I-Pace will join Waymo's fleet at a March 2018 press event New York
Last week, Waymo won approval to begin testing cars with no backup drivers in California near the company's Mountain View headquarters in Silicon Valley. Waymo already has dozens of self-driving vans operating out of its secretive Alphabet's X lab in Mountain View shuttling employees to and from work.
The next step will be to start another Early Rider Program based on the Phoenix model and eventually launch a commercial program in Silicon Valley. By the time Waymo's service becomes a household name in the U.S., the company will have mapped and tested every road in excruciating detail.
Waymo is just beginning to experiment with pricing models. At launch, Waymo will offer fares that are competitive with Uber and Lyft. A preview of the Waymo app shared with Bloomberg this summer showed a user-interface similar to Google's navigation app, with the additional functions of a standard ride-hailing app.
Once the backup safety drivers are removed from the vehicles and Waymo figures out how to charge for in-ride entertainment and advertising, analysts expect base fares to drop. Waymo's service may even undercut Uber, which heavily subsidizes its fares in an effort to gain market share.
Uber tried to beat Waymo to become the first company to launch an autonomous ride-hailing service when it started testing pickups in self-driving Uber vehicles in San Francisco back in 2016. However, the pilot was shut down after Uber refused to apply for a autonomous testing permit from the California DMV and a self-driving Uber was captured on a smartphone video running a red light.
In addition to its rush to develop it autonomous driving technology, Uber was sued by Waymo for allegedly stealing IP and and other documents related to lidar, a vital technology used to help autonomous cars navigate.
The lawsuit led to the dismissal of Anthony Levandowski, the head of Uber's self-driving division. Levandowski is a former Google employee who spent nine years working on the company's self-driving technology before leaving to form autonomous trucking startup Otto, which was purchased by Uber in 2016 for over $600 million.
The companies settled their court case in February, with Uber agreeing to pay $245 million to Waymo.
Although Waymo has taken the undisputed lead in autonomous driving technology, automakers are beginning to gain some ground. General Motors' Cruise unit based in San Francisco plans to launch a robotaxi service soon using a fleet of autonomous driving Chevy Bolt EVs, which are being developed and tested by Cruise. Mercedes Benz and automotive supplier Bosch just announced they will launch a pilot autonomous shuttle service using the Mercedes S-Class in San Jose in the first half of next year.
For its new ride-hailing service, Waymo has plans to acquire up to 62,000 plug-in hybrid Pacifica minivans and 20,000 fully-electric Jaguar I-Pace SUVs to build out its commercial fleet over the next few years in cities throughout the U.S.
Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.
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