Waymo launches complete ride-sharing app pilot, twisting knife in Uber

Waymo is launching a ride hailing service pilot in Phoenix, Arizona, following a recent demonstration of its vehicles driving without any humans onboard. The service seems necessary to prove the safety of a driverless ride hailing service to regulators and potential users of the Waymo system – but could also mark its first move into the ride-hailing business, and the potential for its expansion should deeply concern market incumbents Uber and Lyft.

Waymo boss John Krafcik wrote that in the metro region of Phoenix, a subset of the fleet will operate in fully autonomous mode without a safety driver – meaning that the autonomous Waymo system is the sole driver of the vehicle. A simple app hails the cars, and users will be able to provide feedback. In turn, Waymo should gain a lot of bargaining power with legislators, assuming it goes without a hitch.

This comes at a time when Waymo is suing Uber over alleged theft of intellectual property, relating to the hasty acquisition of Otto by Uber – a startup founded by ex-Googler Anthony Levandowski. That case has traveled a long way, and seems close to a resolution, but with terms like ‘conspiracy’ thrown around with aplomb, it has become a very protracted headache for Uber.

Removing the driver could potentially greatly reduce the cost of operating a ride-hailing service, the drivers’ wages, and with it one of the most contentious areas for the service providers currently – the employment status of the driver. But a move to autonomous driving could also shift the liability of an accident back on to the ride hailing service operator and the technology vendor. With potentially huge insurance bills on the line, the likes of Waymo want to ensure that their systems are bulletproof.

Waymo began life as an internal Google project in 2009, to develop hardware and software that could drive a car for 100 miles without intervention from a driver. Within several months, the company achieved this goal, and Google continued to test and refine the technology it had developed, spinning out the research division in 2016 into a separate company called Waymo.

Waymo always appeared to be primarily focused on the LiDAR hardware and software of autonomous driving, and is now generally considered to be the market leader for LiDAR, in terms of the quality of its technology and the price point it can produce the sensors.

Automakers have been caught out by Waymo’s progress in developing LiDAR. In response, Ford invested $1bn in self-driving group Argo AI as well as $150m in LiDAR manufacturer Velodyne, while GM has purchased Strobe, another LiDAR manufacturer. The automakers and their OEM suppliers did not anticipate the speed that a new entrant could take advantage of emerging applications.

After announcing that it would no longer be producing its Firefly vehicle (the two-seater bubble-car that featured prominently in promotional Google videos), Riot speculated as to whether Alphabet would be winding down its activity in the area. But that now appears to of been a strategic move, to avoid the process of vehicle production – which could have been a nightmare for something as new as Firefly. Instead, Waymo has partnered with Chrysler, and uses adapted Pacifica Hybrid minivans as its current fleet vehicle – the platform for its research.

Alphabet recently made a $1bn investment in Lyft, making it the natural partner that Waymo might launch a self-driving ride hailing service with. Alphabet could also decide to expamd the Phoenix self-driving service itself more widely, and not partner with Lyft, however, the difficulty of operating a ride hailing service has been demonstrated by Uber, whose well-documented disputes with regulators and drivers appear to be a universal constant. Uber is currently having serious issues with regulator in Brazil and London, and was also forced to pull out of Quebec, due to changes in the regulatory conditions there.

Ford is currently attempting to cash in on Uber’s misfortune with regulators, announcing that it plans to launch its Chariot bus network in London – although the move is yet to gain approval from Transport for London, the regulator that banished Uber. Chariot already operates in New York, Austin and Seattle, but was briefly suspended in California after inspection failures.

Critically, if Waymo were to find itself embroiled in a dispute with regulators over its operations as a ride hailing service, this could be damaging for the wider public perception of Google. The Alphabet group is already engaged with regulators on multiple areas, and wouldn’t want to give any additional reason for them not to be cooperative with its wider interests, and could be enough of a sticking point put Alphabet off running its own service.

Krafcik declined to comment on whether the company would expand beyond the test service in Phoenix, but seemed open to partnerships with automakers, perhaps suggesting that Alphabet sees no imperative in owning and operating the services enabled by autonomous driving.

The Waymo CEO has also made headlines recently for his claims about how passengers responded to autonomous driving interventions. Waymo has now ditched its autopilot system after finding that users became distracted behind the wheel, and were ill-prepared to take the wheel when prompted – due to losing track of context. In experiments, test subjects were caught napping, putting on makeup, and fiddling with their phones, instead of paying attention to the road. After studying its evidence, Waymo has decided that the old approach was unsafe, and is now trying to solve these problems without human interference.