After covering Waymo for a few years, I learned to take the company's announcements with a grain of salt.
For example, in 2018 Waymo announced that it would roll out a fully driverless commercial service by the end of the year. Waymo released a service called Waymo One in December 2018, but it had some big asterisks: each vehicle had a safety driver, and the service was only accessible to a small group of people.
But today, Waymo seems to finally be launching the taxi service it promised two years ago: one that is completely driverless and open to the public. Waymo announced to Ars that the service will initially operate over a 50 square mile area in the Chandler, Tempe and Mesa suburbs of Phoenix.
Waymo's introduction of driverless technology has been so slow and confusing it is easy to lose sight of what a remarkable achievement this is. Over the past year or two, when driverless technology failed to live up to the earlier hype, it has become fashionable to claim that driverless technology is years or even decades away.
But that's not true. Members of the public who live in the Chandler area can today call a completely driverless taxi.
Waymo's big challenge now is profitability, not just technology
Waymo's decision to offer completely driverless driving to the public signals that the company believes it can do so safely. The question now is how quickly it can expand its service nationally and ultimately globally. It's a question of both economics and technology.
The company has lost tens of millions – maybe hundreds of millions – of dollars every quarter. Much of Waymo's losses are due to the cost of developing Waymo technology. But it's a safe bet that even paid Waymo One rides have lost Waymo money. Waymo's security drivers probably make at least as much as an Uber or Lyft driver, and the company also has fleet support staff who monitor vehicles remotely. And every Waymo vehicle has expensive sensors and computer hardware that are not found in a typical Uber or Lyft car.
Eliminating the security driver is an important step in making Waymo's service profitable. But it just can't be enough because Waymo says the cars still have televisions.
These Waymo employees never directly control the vehicles but send high-level instructions to help the vehicles get out of difficult situations. For example, a Waymo spokeswoman told me, "If a Waymo vehicle detects that a road is closed for construction, it can drive by and request a second set of eyes from our fleet response specialists." The fleet response specialist can then confirm that the road is closed and instruct the vehicle to take a different route.
"Several cars at the same time"
The key question to the profitability of Waymo's trips is likely to be the ratio of vehicles to operators. Waymo probably can't make a profit if there is an operator for every vehicle. However, the service becomes more profitable when one operator can monitor multiple vehicles – maybe two or three at the beginning and eventually 10 or 20 vehicles per operator.
A Waymo spokeswoman told Ars: "Fleet workers are trained to monitor multiple cars at once, but we don't share specific numbers." However, we can assume that this will be a major focus for Waymo in the coming months: reducing the remote monitoring that each vehicle requires so that Waymo can lower its back office support costs over time.
It should be noted here how quickly Waymo expands its service to other customers in the existing service area. In Thursday's blog post, Waymo wrote, "We're starting with those who are already part of Waymo One and will be welcoming more people straight to the ministry through our app over the next few weeks." This could mean that in a few weeks, Waymo's service will be available to everyone in its service area. Or Waymo is only expanding slowly – which could be a sign that Waymo's service is still highly unprofitable.
A Waymo spokeswoman told Ars that prior to the March pandemic, "a total of 1,000 to 2,000 weekly trips were made, five to 10 percent of which were completely driverless". Waymo expects to return to that volume of around 100 driverless trips per week before the end of the year and grow from there.
Enlarge /. A Waymo self-driving car doing its thing in May 2019.
The other big question is how long does it take – and how expensive it is – to expand coverage. Waymo can expand into a new area in three steps. First, the company creates detailed maps of the new area. Then the company runs its cars with security drivers in the area to test the performance of its software. Once the company is satisfied with the software's performance, it begins driverless operation.
It took Waymo more than three years to complete this process for its first 50 square mile service area around Chandler, Arizona. Obviously, Waymo has to speed up the process dramatically if it wants 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 have easy year-round expansion to other cities in the Southwest with wide streets, few pedestrians, and sunny weather.
Rain, snow, people …
Expansion into other parts of the US can be more difficult. Large urban centers like San Francisco, New York, and Chicago have much higher densities of vehicles, pedestrians, bicycles, and other obstacles than the suburbs of Phoenix. Northern cities like Boston and Minneapolis have heavy snowfalls. Almost every metropolitan area gets more rain than Phoenix. Waymo's technology may take more years to become available in these areas.
Waymo will also have to deal with differences in law and custom. Different states have different laws for things like right turns at red lights. Waymo needs to ensure that it complies with the law in every location. Waymo must also adjust its vehicles to match that of the local drivers.
If Waymo can at least provide its service in the Phoenix area, it could be a huge advantage over its competitors. By operating a large taxi service in just one subway area, Waymo gains a wealth of sensor data and operational experience that influences the company's efforts to serve other regions. Waymo is far from winning the national driverless technology race. But it continues to be the clear industry leader.