https://fortune.com/2024/05/29/waymo-self-driving-robo-taxi-uber-tesla-alphabet/

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Magazine*Alphabet

How Waymo outlasted the competition and made robo-taxis a real
business

BYDavid Meyer

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Timeline graphic of self-driving cars Waymo, GM Cruise, Amazon Zoox,
Apple, and Uber showing when the companies have entered and quit
their testing.
ENDURANCE RACE: A wide range of companies have entered, and quit, the
self-driving car contest over the years.
From Top: Courtesy of Waymo; Courtesy of Cruise; Courtesy of Zooz;
Andre J. Sokolow--Picture Alliance/Getty Images; Gene J. Puskar--AP
Photo

The road to autonomous driving is not for the faint of heart.

Look behind to view the wreck of Uber's self-driving car. In the
ditch to the left is General Motors' Cruise robo-taxi. And that scent
of burning rubber? That's from the skid marks Apple made as it
careened toward the exit ramp.

But one funny-looking vehicle appears to be gaining momentum.

Waymo, born 15 years ago as the "Google Self-Driving Car Project,"
now offers fully autonomous rideshare services in Phoenix--where its
driverless vehicles also make Uber Eats deliveries--as well as in San
Francisco and part of Los Angeles; 50,000 paid Waymo rides take place
across the three cities each week, the company recently announced.

That paying passengers now routinely hop into empty Waymo vehicles,
which gracefully move among the surrounding jumble of human-piloted
cars, is a remarkable feat of engineering and a genuine pinch-me
moment for anyone who has experienced it. And while Waymo has been at
it longer than most, the fact that it has become the leader in the
crowded race to commercialize self-driving cars was not a given.

Frederic Bruneteau, the founder of Ptolemus, a Brussels-based
automation consultancy and market research firm, likens the
competition in the self-driving car industry to the grueling Tour de
France bicycle race: "Sometimes you see people catching up with you,
and sometimes you're getting ahead and the number of people behind
you are pretty scarce. That's what's happened with Waymo."

    50,000

    Total weekly Waymo rides in L.A., Phoenix, and San Francisco.
    Source: Waymo

Aman Nalavade, Waymo's group product manager for growth and
expansion, says a go-slow approach has proved to be the right
strategy for this race. "We scale responsibly, as it's bad business
to overrun supply," Nalavade says. For technology as novel as fully
autonomous vehicles, "it takes time to build up a meaningful service
and gain a community's trust."

But even the most bullish believers in autonomous transportation
acknowledge the tech still has a ways to go before it's reliable
enough for widespread deployment on U.S. roads. And while Waymo has
outlasted its rivals so far, new challenges on the regulatory and
competitive front mean that it's closer to the next phase of the race
than it is to the finish line. 

From moonshot to reality

Google launched its self-driving car program in 2009, incubating it
within the X "moonshot" lab before spinning it out as a stand-alone
business called Waymo ("a new way forward in mobility") within the
Alphabet parent company. The car's physical design and functionality,
as well as the team's leadership, have gone through multiple
transformations since then. 

Google initially designed the technology as a copilot system that
allowed human drivers to let go of the controls, retaking the wheel
only when necessary, but concluded the approach was unsafe. In 2015,
the company began building its own pod-shaped "koala" car--a
two-seater with no pedals or steering wheel--only to revert in 2017 to
using modified versions of commercially available cars. Today Waymo's
fleet consists of Jaguar I-Pace electric SUVs equipped with an array
of sensors.

There's been no shortage of problems and setbacks. In December, Waymo
recalled its vehicle software after two of the cars crashed into a
pickup that was being towed in Phoenix. And U.S. regulators recently
opened an investigation into 22 reported incidents involving Waymo
cars, including 17 collisions with stationary objects such as gates
and parked cars, and multiple occasions where the vehicles appeared
to disobey street signs and road markings. 

But whether the result of superior safeguards or mere luck, Waymo has
managed to avoid the more serious road accidents that have derailed
its rivals. Uber abandoned its self-driving car efforts in 2020, two
years after one of its cars fatally struck a pedestrian in Arizona. A
Cruise vehicle in October hit and dragged a pedestrian who had been
thrown into its path after being struck by another car. Regulators
made Cruise suspend its driverless operations in San Francisco, and
Cruise soon halted operations nationwide.

    250

    Waymo vehicles operating in San Francisco. Source: Waymo

It was a major setback for Cruise, which, just months earlier, had
gotten California regulators' green light to offer driver-free
robo-taxi services to paying customers any time of day in San
Francisco. Cruise has not provided a date for when it plans to resume
its robo-taxi passenger service, but recently began testing cars with
human safety drivers in Arizona again.

Apple, meanwhile, called it quits in February, shutting down an
expensive yearslong project that never reached the point of testing
without human safety drivers on public roads.

Waymo's ability to "mostly stay clear of trouble," along with its
steady geographical expansion and its investors' deep pockets, has
put the robo-taxi operation "into a very good position," says Pedro
Pacheco, a vice president of research at Gartner. While other
autonomous driving companies might be tempted to move too fast in
order to justify themselves to their investors, he adds, Waymo's
situation as a mostly autonomous sister company to the
cash-generating Google gives it "the comfort to take a somewhat
cautious pace of growth."

What comes next

The heat may soon be on again, as Tesla CEO Elon Musk has promised
that his company will reveal its own robo-taxi in early August.

Tesla has so far not been a direct competitor to Waymo--its
fallaciously named "full self-driving" (FSD) technology is more akin
to an advanced driver-assist system, requiring a human driver to be
attentive at all times (known as Level 2 autonomy in industry jargon,
versus Waymo's Level 4 vehicles, and Level 5, the highest).

While the two companies' vehicles use different hardware to navigate
the roads--Teslas rely solely on cameras; Waymo cars draw data from
cameras plus radar and lidar laser sensors--AI will play an
increasingly important role. 

Tesla's fleet of hundreds of thousands of vehicles constantly feed
data to the company's neural networks so that its FSD software can
learn to drive more like humans do. This year's version of the
software, FSD 12, is the first to let the neural network make
decisions about driving. According to Gartner's Pacheco, Tesla's
self-learning approach is a "hint of the direction in which this is
heading, and now an AI breakthrough could unlock a lot of new
possibilities for autonomous vehicles."

Waymo's Nalavade says AI "has long been a part of our stack, but its
role has grown massively in recent years." The progress in AI, he
notes, has made Waymo's recent expansion possible by allowing its
systems to "generalize"--to apply previously learned lessons to new
environments, rather than having to start from scratch in each new
place. "The Waymo Driver [system] is capable of generalizing to
dozens more cities tomorrow, but we're focused on building a valuable
ride-hailing service that people want to use in the cities [in which]
we operate," he says.

While an imminent Tesla robo-taxi has many doubters given Musk's
history of overly optimistic timelines, there are plenty of other
players with no intention of ceding the future of automobiles to
Waymo. Amazon subsidiary Zoox has a robo-taxi currently shuttling
employees to work in certain locations. Automakers like Ford,
Volkswagen, and Mercedes-Benz are driving hard (often in partnership
with startups) toward Level 3 systems, which still require occasional
human intervention. And China's rising band of automakers have
various projects in the works.

"We're far from getting to the final chapter of robo-taxis," says
Pacheco. 

This article appears in the June/July 2024 issue of Fortune with the
headline "How Waymo steered to the front of the pack and made
self-driving taxis a reality."

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