After covering Waymo for several years, I have learned to take company announcements with a grain of salt.
In 2018, for example, Waymo said it would launch a fully driverless commercial service by the end of the year. Waymo released a service called Waymo One in December 2018, but it featured a couple of huge asterisks ̵
But today Waymo finally seems to be launching the taxi service promised two years ago: one completely driverless and open to the public. Waymo told Ars that the service will initially operate in an area of 50 square miles in the Phoenix suburb of Chandler, Tempe and Mesa.
Waymo’s launch of driverless technology has been so slow and confusing that it can be easy to lose sight of what a remarkable achievement this is. Over the past couple of years, as driverless technology has failed to live up to the previous hype, it has become fashionable to claim that driverless technology is still years or even decades away.
But it’s not true. Members of the public living in the Chandler area can hail a fully driverless taxi today.
Waymo’s big challenge now is economics, not just technology
Waymo’s decision to offer fully driverless travel to the general public signals that the company believes it can do so safely. The question now is how quickly it will expand its service nationwide and possibly globally. It is a question of economics as much as of technology.
The company lost tens of millions, possibly even hundreds of millions, of dollars every quarter. Much of Waymo’s losses are due to the cost of developing Waymo’s technology. But it’s a safe bet that even paid Waymo One rides lost Waymo money. Waymo’s safety drivers allegedly earn at least as much as an Uber or Lyft driver, and the company also has fleet support personnel who monitor vehicles remotely. And every Waymo vehicle has expensive sensors and computer hardware not found on a typical Uber or Lyft car.
Eliminating the safety driver is an important step in making Waymo’s service profitable. But that may not be enough on its own because Waymo says the cars still have remote attendants.
These Waymo staff members never directly drive vehicles, but send high-level instructions to help vehicles out of tough situations. For example, a spokesperson for Waymo told me, “If a Waymo vehicle detects that a road ahead may be closed due to construction work, it can pull over and request a second look from our fleet response specialists.” The fleet response specialist can then confirm that the road is closed and instruct the vehicle to take another route.
“Several cars at the same time”
The key question for Waymo’s racing profitability is likely the ratio of vehicles to operators. Waymo probably can’t profit if there is an operator for every vehicle. But the service becomes more profitable if an operator can supervise multiple vehicles, perhaps two or three at the start and eventually 10 or 20 vehicles per operator.
A Waymo spokesperson told Ars that “fleet rescuers are trained to monitor multiple cars at once, but we don’t share specific numbers.” But we can expect this to be a major goal for Waymo in the coming months – to reduce the amount of remote monitoring required by each vehicle so that Waymo can reduce back-office support costs over time.
A key thing to look out for here is how quickly Waymo expands its service to other customers in the existing service area. In Thursday’s blog post, Waymo wrote that “we will start with those who are already part of Waymo One and, in the coming weeks, we will welcome more people directly into the service via our app.” This could mean Waymo’s service will be available to everyone in its service territory in several weeks. Or Waymo may be expanding only slowly, which could be a sign that Waymo’s service is still highly unprofitable.
A Waymo spokesperson told Ars that, before the pandemic struck in March, “we were serving 1,000 to 2,000 weekly trips in total, 5 to 10 percent of them completely driverless.” Waymo said he plans to go back to that volume of around 100 driverless runs a week before the end of the year and then grow from there.
The other big question is how long does it take – and how expensive it is – to expand the coverage area. There are three steps for Waymo to expand into a new area. First, the company builds detailed maps of the new territory. Then the company has its cars driven on routes in the area with safety drivers to test the performance of its software. Finally, once the company is satisfied with the performance of the software, it begins driverless operations.
It took Waymo more than three years to complete this process for its initial 50 square mile service territory around Chandler, Arizona. Of course Waymo will have to dramatically speed up the process if he is to build a national, or even global, taxi service. The next 50 square miles, or even 500 square miles, probably won’t take as long as the first 50.
Expanding the Waymo One service footprint to other parts of the Phoenix suburb should be straightforward. Waymo may also be able to easily expand to other cities in the Southwest with wide streets, few pedestrians, and almost year-round sunny weather.
Rain, snow, humans …
Expanding to other parts of the United States may be more difficult. Major urban centers such as San Francisco, New York and Chicago have a much higher density of vehicles, pedestrians, bicycles and other obstacles than the Phoenix suburbs. Northern cities like Boston and Minneapolis have heavy snowfall. Almost every metropolitan area receives more rain than Phoenix. It may take multiple years of work to bring Waymo’s technology to these areas.
Waymo will also have to deal with differences in law and custom. Different states have different laws on things like right turns at red lights. Waymo will have to make sure it complies with the law in each location. Waymo will also have to fine-tune its vehicles so that its driving style is consistent with that of local drivers.
However, if Waymo can at least make his service available in the Phoenix area, this could be a big advantage over his rivals. Running a large-scale taxi service even in a metropolitan area will give Waymo a wealth of sensor data and operational experience that will inform the company’s efforts to address other regions. Waymo is far from winning the national race for driverless technology. But it continues to be the clear leader in the industry.