Last year was the most significant yet in Waymo’s 11-year effort to develop a driverless car.
The Google sister company raised $3.2 billion, signed deals with several partners, and launched the world’s first truly driverless taxi service in Phoenix, Arizona.
Even so, the widespread rollout of fully autonomous vehicles remains slow, staggered, and costly.
“It’s an extraordinary grind,” said John Krafcik, Waymo chief executive, in an interview with the Financial Times. “I would say it’s a bigger challenge than launching a rocket and putting it in orbit around the Earth… because it has to be done safely over and over and over again.”
Gone is the optimism of just a couple of years ago. In March 2018, Waymo confidently forecast that “up to 20,000” electric Jaguars “will be built in the first two years of production and be available for riders of Waymo’s driverless service, serving a potential 1 million trips per day.”
Two months later, it added that “up to 62,000” Chrysler minivans would join its driverless fleet, “starting in late 2018.”
Today, there is little sign that any of these vehicles have been ordered, and Waymo’s official fleet size remains just 600.
Mr. Krafcik, a carmaking expert who coined the term “lean production” in the 1980s and rose to be chief executive of Hyundai America, acknowledged that he and his colleagues had relied on their experience in the car industry to judge how fast Waymo’s growth would be.
“When we thought, in 2015, that we would have a broadly available service by 2020, it wasn’t a crazy thought,” he said. The thinking was: “Well, if we’ve got one prototype, then we can get to mass production in just a couple of years, right?
“This was a position of—I wouldn’t say ignorance—but a lack of information and a lack of experience… We’ve become very humble over these last five years.”
Waymo, which started as a Google project in 2009, first demonstrated its driverless technology publicly in 2015, spawning a whole new industry that generated all kinds of hype.
Uber began spending $20 million a month to try to build its own driverless cars, fearing the collapse of its business model. Its goal was to have 100,000 self-driving cars on the road by 2020.
“This war for self-driving is truly existential for Uber,” its chief product officer warned then-chief executive Travis Kalanick in May 2016. “Either we’ll start up our second S curve of growth or we’ll die.”
But it took Waymo two more years to operate three fully driverless cars at the same time, then another year to have 100. One more year of testing gave Waymo the comfort to begin ferrying select passengers in its test vehicles in Phoenix. Then, three months ago, it opened the network to the public.
This markedly slower timeline is unlikely to be bested, said Mr. Krafcik. Turning again to a space analogy, he said it took the Soviet Union and the United States about 10 years to launch a rocket into orbit. To get around the Moon, it was another 10 years. “No one beat that time,” he said. “It’s just the time it takes to do something of that scope and magnitude.”
With the exception of Tesla, which continues to promise the imminent arrival of self-driving technology, a slower timeline has been widely accepted. In 2018, the consultancy Bain said a robot taxi, or “robotaxi,” transformation was “just around the corner” and forecast autonomous vehicles would account for up to 30 percent of the market by 2030. Now it expects the figure to be 4-9 percent.
“We are at a point now where there is more realism than hype,” said Mark Gottfredson, a Bain partner.
Waymo, with its deep pockets and a team of 2,100 employees, remains in the lead. Uber, meanwhile, abandoned its project last month, in effect giving away its entire driverless division to rival Aurora, along with a $400 million investment, in return for a 26 percent stake and a board seat.
“Buses, trucks, cars, whatever”
But some of Waymo’s rivals are making headway. Zoox and GM-backed Cruise have both unveiled purpose-built vehicles that, without a steering wheel or pedals, appear far more futuristic than the “soccer mom” Chrysler Pacificas used by Waymo.
Zoox executives have described their vehicle as being like the first iPhone—a revolutionary device because the hardware and software were integrated from the ground up.
But Mr. Krafcik points out that Waymo had already tried to build a customized vehicle with the Firefly, a fully automated two-seater designed in 2013 and abandoned four years later.
That experience taught Waymo that its exclusive focus should be on the Driver, an Android-like operating system that it wants to operate in several different types of vehicle.
“We aspire to drive anything that moves on public roads—buses, trucks, cars, whatever,” said Mr. Krafcik. “We don’t want to be tied to a single form factor.”
Such an approach could potentially earn Waymo multiple lines of revenue from ride-hailing services, goods delivery, and licensing deals. Partners appear eager. Last year alone, Waymo struck deals to build driverless ride-hailing vehicles with Volvo, cargo vans with Fiat Chrysler, and articulated lorries with Daimler.
Some observers have seen this as a pivot away from robotaxis, which may be costly to roll out at scale, but Mr. Krafcik argued such conclusions tend to be based on false assumptions. “I read all the time that the hardware associated with the Waymo Driver is $250,000—and that’s wrong, just completely wrong. It’s not even close.”
Billions of dollars
He declined to go into operating costs, but balked at the skepticism over fully autonomous vehicles and recommended that anyone with doubts simply take a look at Waymo’s investors—including the venture capital groups Silver Lake and Andreessen Horowitz, the institutional investors T. Rowe Price and Fidelity, and the car groups Magna and AutoNation.
“We don’t talk too much about our $3.2 billion raise but that was the single largest capital raise for a pre-revenue company in the history of the universe,” he said. “They’ve obviously got a lot of confidence in the sort of economics the Waymo Driver can unlock.”
Mr. Krafcik did not say when and where its ride-sharing service will launch next. Waymo’s conspicuous vehicles can be seen daily in San Francisco, even at Christmas, but removing the driver and letting tourists in could still be years away. If so, Mr. Krafcik seemed unperturbed, knowing well that in a few decades it will matter little which precise year ended up being the turning point.
Long-term, he remained adamant the technology will disrupt personal car ownership and had no hesitation forecasting that children born today will have little reason to learn how to drive.
“[They] absolutely will not need a driver’s license—I can say that with 100 percent confidence,” he said. “[They’ll] be able use Waymo in just about any place that [they] might be.”