Waymo’s ‘free’ driverless cars arrive in San Francisco’s trillion-dollar robotaxi battleground

Cruise has a big, fat target painted on its back and now Alphabet’s Waymo is coming after the robotaxi developer. 

Weeks after the General Motors subsidiary tentatively began offering residents of San Francisco rides in a handful of its driverless cars during limited hours at night, the behemoth behind Google is contesting its stake to leadership in a fledgling market that could eventually be worth trillions of dollars.

Waymo said on Wednesday it would begin a soft launch of its Waymo One robotaxi service in the very heart of Silicon Valley, establishing the city as the future battleground for the game-changing technology—even if only the company’s employees will experience it for now.

“We’re particularly excited about this next phase of our journey as we officially bring our rider-only technology to San Francisco, the city many of us at Waymo call home,” co-CEO Tekedra Mawakana said in a statement.

Although Waymo One has already been officially operatings since 2020 in a part of Phoenix, Arizona, conquering the densely populated metropolis of San Francisco using its characteristic looking Jaguar I-Pace electric SUVs is another matter entirely. 

The city is famous for its dangerous blind crests in the road and narrow serpentines like Lombard Street. Add to that the sheer number of pedestrians and cyclists, and the challenges for a computer-driven vehicle navigating traffic become gruelling.

“We’re closely monitoring Cruise, naturally, since they have very big expectations to manage,” said Carsten Intra, head of the Volkswagen subsidiary responsible for the group’s robotaxi development.

“Although it’s very limited in terms of which hours and which weather conditions it can currently operate, it is getting a lot of attention, because it’s basically the first to market to offer such a service.”

While Cruise might be quicker to receive regulatory permission to open its small fleet to the city’s public, Waymo is not one to be trifled with.

First founded in 2009, the company can already boast real-world test driving in the millions (and simulated test driving in the billions) of miles—more than any other rivals. Its operations have been funded by the near-bottomless pockets of Alphabet.

Waymo’s goal is no less than the development of “the world’s most experienced driver”: a software program safe and robust enough to transfer itself easily to new cities without the need for extensive new testing. Only then, the industry believes, can the business be successfully scaled to a profitable size.

Political repercussions

While estimates vary, analysts at UBS believe the global robotaxi market may be worth at least $2 trillion annually in 2030.

Alongside a number of tech companies, the lure of this potential opportunity has attracted a range of carmakers including Tesla, Ford and Volkswagen in the west, and Chinese EV startups like Xpeng and Nio in the east.

The stakes are high, however, as the public sentiment towards autonomous driving remains easily swayed. Uber was forced to pull out of the market after one of its robotaxis manned by a safety driver struck a pedestrian dead.

That’s why VW is targeting a commercial start of its planned robotaxi service in 2025 with the help of its associate, technology partner Argo AI, co-owned with Ford.

In September, VW gave a first glimpse of its initial robotaxi model, a high-tech version of its ID Buzz electric van equipped with a proprietary Argo AI laser scanner for better perceiving its environment.

“It’s extremely important for Volkswagen to very safely launch in the market only after we’ve undergone extensive testing,” VW’s Intra told reporters on Monday. “The danger is that an accident can swiftly lead to political or legislative repercussions that throw us backward.” 

For its part, Waymo said it was “determined to be good neighbors” in San Francisco, engaging with the city, nonprofit organizations and community groups to build goodwill and help it better understand the transportation priorities of San Franciscans.

By comparison, Tesla CEO Elon Musk is known for taking calculated risks, not the least of which is unleashing his unfinished self-driving system called FSD on the North American market.

While protecting itself legally by limiting the rollout to over 60,000 customers and assuming no responsibility in the event of a crash, its “beta test” has been attracting the attention of U.S. traffic safety authorities.

News that he was restricting its use in Canada’s largest city showed there were limits to how far he was willing to go to risk Tesla’s reputation.

“Toronto streetcars are not yet handled well by FSD,” Musk admitted via Twitter.

On Tuesday, he said he hoped to finally introduce FSD Beta to Europe in the summer, pending approval.

Unlike in the U.S., however, authorities in Europe take a heavy-handed approach to regulating the use of self-driving technology by consumers.

Only Germany has thus far offered a legislative path for robotaxi companies to operate commercially, an offer Intel subsidiary Mobileye plans to take advantage of in the course of this year.

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