Alphabet Shifts Self-Driving Cars Into New Unit Called Waymo

Google parent company Alphabet Inc. is separating its self-driving car project into a new business called Waymo, seeking to sharpen its focus on changing the transportation industry.

Bloomberg News

December 14, 2016

3 Min Read

John Krafcik, chief executive officer of Waymo, announced the move on Tuesday at an event in San Francisco. The company has been developing autonomous vehicle technology for more than six years, as part of its X research lab. Waymo is emerging from this research phase as a standalone business owned by Mountain View, California-based Alphabet.

“We will continue to have access to infrastructure and resources Alphabet provides, but in this new world as Waymo we also have this feeling like we are a venture-backed startup,” Krafcik said. Those resources include Google’s software code from the autonomous project, and its powerful data centers.

Alphabet’s self-driving car project has lost several top executives this year, and some members of the team were frustrated by the pace of progress, especially as traditional automakers and rivals like Uber Technologies Inc. and Tesla Motors Inc. develop and move forward with their own autonomous-vehicle systems. After revealing the company name, Krafcik didn’t offer any details on Waymo’s plans for a viable commercial business.

Still, Waymo is making some progress — the company plans to start a ride-sharing service with Fiat Chrysler Automobiles NA minivans using semi-autonomous technology as early as the end of 2017, people familiar with the matter said. Technology news website The Information reported earlier that Alphabet planned a self-driving ride service and could use Fiat minivans.

“Waymo’s next step will be to let people use our vehicles to do everyday things like run errands, commute to work, or get safely home after a night on the town,” the company said in a statement.

Adding Sensors

Krafcik said Waymo is adding new specialized sensors to Chrysler vehicles now, but didn’t comment on how program has evolved, only noting that Fiat “has been a wonderful partner.”

At the event, Waymo provided details about its first fully autonomous trip, transporting a blind man around Austin, Texas, in October 2015. Krafcik described the feat as “the first recorded fully driverless trip on public roads,” adding that “the team hopes to replicate that feat across the country.”

Launching an autonomous ride-sharing service using Fiat vehicles is a more practical approach than Alphabet once planned. It designed small self-driving vehicles without pedals and steering wheels and wanted to use these to change the auto industry in more radical ways. Yet some regulators, especially in California, require wheels and pedals, and the company realized making its own cars would be too difficult.

“For now, the company will have to rely on using steering wheels and brake pedals. That’s largely to appease regulatory rules,” Krafcik said. “It is our goal to get there without those.”

‘Better Drivers’

While the unit now officially has a name, Krafcik dodged questions about its ultimate business plan. Project leaders have considered just putting its autonomous software in existing cars, making its own vehicles from scratch, and approaches in between. They’ve also debated selling autonomous cars for individuals to own, versus a paid subscription service where the vehicles are shared among many members.

“There are so many models for us to contribute to,” the Waymo CEO said. “I think we’ve been really clear that we’re not a car company. We’re not in the business of making better cars, we’re in the business of making better drivers.”

The former Hyundai executive acknowledged that ride-sharing companies like Uber, with existing networks of consumers, have “valid” models, but he stressed that Waymo’s advantage will be in its self-driving technology. “What we’ve shared with you today is a very difficult thing,” he said.

Asked when that self-driving technology will be commercially available, Krafcik didn’t give a timeline.

“We’ll have more for you soon on the ‘when,”’ he said.

About the Author(s)

Bloomberg News

Founded in 1981, Bloomberg reports on international business developments and other news.

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