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Waymo will begin testing its autonomous vehicle technology in Tokyo in early 2025, the first time the Alphabet companyβs robotaxis have driven on public roads outside the U.S. The move to Japan is part of Waymoβs βroad trips,β a development program that involves bringing its technology to a variety of cities and testing it β [β¦]
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Jason Henry/AFP via Getty Images
General Motors' white flag in the robotaxi race on Tuesday just made the autonomous ride-sharing competition much smaller in the US, showing how challenging it can be for companies, even with the capital, to compete if they haven't already made significant headway in autonomy.
Eight years and more than $10 billion in investment later, GM said that the resource-intensive nature of Cruise and an increasingly competitive market has pushed the company to shift away from its robotaxi dreams. The company said in a statement that GM will be focusing on building up its advanced driver assistance systems for "personal vehicles."
The decision was seen by many analysts as an implicit ceding of the robotaxi race to a few companies who are already far ahead in the game, namely Tesla and Waymo.
"We believe GM's move also potentially implies that other companies (Tesla & Waymo) have better tech and/or that the market may not be appealing for later entrants," BofA analyst John Murphy wrote in a note. "Waymo is already offering a robotaxi service across several US cities and Tesla plans to launch its service in 2025."
While Chinese companies continue to make strides in autonomous ride-sharing services, including Baidu's Apollo, Gene Munster, managing partner of Deepwater Asset Management, told Business Insider that he believes autonomous vehicles in the western world will be "powered by two or three companies."
Part of the reason is because delivering robotaxis requires solving the autonomous driving equation and only a few companies like Tesla, Waymo, and Amazon have the resources β and shown the goods, to varying degrees β to do so, Munster said.
"We look at 2,000 companies a year that are cutting-edge tech companies, and we never see anybody trying to solve for autonomy," said Munster, who follows the autonomous vehicle industry. "The reason why is that this ship has basically sailed. It's going to be one of those three."
That GM has decided to pull back its Cruise operations is not an indictment against the business opportunity robotaxis itself presents β GM likely made a prudent move to shift its priorities, Tom Narayan of RBC Capital Markets wrote in an analyst note.
Safety incidents involving Cruise's fleet however kept putting the company at odds with regulators.
The company was stripped of its permit to operate in California after a woman was dragged underneath one of its vehicles last October, essentially paving a clear path for Waymo to get ahead of GM in the state.
Waymo began offering ride-sharing services to a few major cities this year and announced plans to expand to the Miami public in 2026. As of October, the Alphabet-owned company said it now provides more than 100,000 paid rides per week.
A Waymo spokesperson declined to provide comment.
Amazon's Zoox is gearing up to offer public rides in Las Vegas and San Francisco in 2025, differentiating itself from competitors through its unique carriage-style vehicles that don't come with a steering wheel. The company also recently hired a key Tesla autopilot executive.
Tesla has yet to provide commercial rides through its recently debuted Cybercab, but analysts are giddy about the company's timeline. CEO Elon Musk said during an earnings call in October that a $25,000 Cybercab will reach volume production by 2026.
Munster noted another advantage Tesla has is its potential to scale autonomous services, given that there are millions of Tesla vehicles on the road today. Those vehicles also provide large amounts of data to help Tesla fine-tune its Full Self-Driving feature.
"My sense is that this is a big data, large language model type of problem," Munster said. "I think that the advantages that Tesla will gain in data will outpace the disadvantage that they have in hardware."
Representatives for Zoox and Tesla did not respond to a request for comment.
Waymo
If Waymo One's robotaxis continue expanding to airports, human ride-hailing drivers could see their incomes take a big hit.
Airport trips are "incredibly important" for ride-hailing drivers, particularly those who work near cities with major airports, said Lindsey Cameron, an assistant professor of management β whose research focuses on AI and gig work β at Wharton School of the University of Pennsylvania. She added that airport pickups can be especially profitable because those rides often have higher fares, which are driven by strong customer demand.
"Those are the most lucrative rides," she said. "You've got a captive audience who wants to go home, and so they're willing to pay."
Many Uber and Lyft drivers have told BI their gigs are already less profitable than they were a few years ago β due, in part, to an increase in competition from both human and robot drivers. The threat of robotaxis further chipping away at their business has put some of them on edge.
Nicole Moore, a part-time Lyft driver and the president of the driver advocacy group Rideshare Drivers United, said that in the last couple of weeks, she's seen a significant uptick in concern from LA-based drivers about the impacts of robotaxis on their earnings. In November, Waymo One began offering rides to anyone in Los Angeles after previously operating a limited service with a waitlist.
"You put more drivers on the street β whether they're robot drivers or people β everybody makes less money," she said, adding, "We're thankful they're not in the airport yet."
Waymo One, which is owned by Alphabet, is the only company operating autonomous vehicles at US airports, Waymo told BI. It's also the biggest autonomous taxi service in the US: In October, the company said it was providing more than 150,000 weekly paid rides in Los Angeles, San Francisco, and Phoenix. Additionally, the company announced this fall it will offer rides to the public in the Atlanta and Austin markets early next year and in Miami in 2026.
While Waymo One airport trips are available in Phoenix βand the company has approval to begin pilot testing at the Austin airport β robotaxis are still restricted from airports in Los Angeles and San Francisco. In these cities, approval for airport rides would come from groups that oversee the airports' operations.
The experts BI spoke to said it's unclear if and when robotaxis will receive widespread approval for airport trips in the markets they're operating.
Spokespeople for Los Angeles World Airports and the Airport Commission for San Francisco International Airport told BI there is no estimated timeline for when Waymo One will receive approval, but the groups are monitoring the robotaxi's progress.
The LAWA spokesperson said the airport can experience significant curbside congestion and that for driverless taxis to gain airport approval, they would need to operate safely and efficiently and not impact the airport's current commercial and private vehicle operations. The Airport Commission spokesperson said driverless taxis would need to demonstrate the ability to operate on freeways and in communities near the airport and ensure they could safely meet the needs of customers.
Waymo told BI that it's providing thousands of trips each week to and from Phoenix Sky Harbor International Airport, the most popular destination for its riders in the city. The company also said it's in active discussions with San Francisco International Airport and Los Angeles International Airport about expanding its fleet to these airports, but didn't give BI a timeline for when it expects to receive approvals.
The company added that it was granted approval to provide robotaxi trips on freeways in San Francisco, Los Angeles, Phoenix, and Austin, but that it hasn't begun offering those rides to the public yet: Access to these trips is currently limited to Waymo's employees in San Francisco and Phoenix.
A spokesperson for Austin-Bergstrom International Airport told BI that the airport would monitor Waymo One's pilot testing before deciding whether to approve airport pickups.
Uber did not respond to Business Insider's request for comment, and Lyft said that its drivers have generally earned more on airport trips than on non-airport trips.
It's not just drivers who are feeling the pinch from Waymo One's expansions. GM announced on December 11 that it was retreating from the robotaxi business "given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market."
Meanwhile, on December 5, shares of Uber and Lyft traded lower after Waymo announced it was expanding to Miami.
To be sure, Waymo isn't the only company rolling out robotaxis: Tesla and the Amazon-owned Zoox are also developing their own versions of a robotaxi.
Moore said that airport trips aren't as profitable for drivers as they used to be, but that they remain important.
"They have been our bread and butter for many, many years," she said.
Jason D., a 50-year-old driver in Phoenix, told BI he does more airport trips than any other type of ride β in part because he drives an Uber XL vehicle that has the space for luggage and multiple passengers. He said competing with Waymo One at airports and elsewhere has hurt his earnings.
"Driverless taxis are flooding an already competitive Phoenix market and taking money from human drivers," Jason D, who drives full-time for Uber and asked that his last name not be included for fear of professional repercussions, previously told BI. He added that Waymo One's cars also contribute to significant congestion at the airport because they don't know how to follow traffic officers' hand and voice commands.
Sergio Avedian, a part-time Uber and Lyft driver based in the Los Angeles area and senior contributor to the gig-driver-advocacy blog and YouTube channel The Rideshare Guy, told BI that airport drop-offs tend to be quick, pay relatively well, and often come with a tip.
In comparison, doing airport pickups can require drivers at major airports to wait in designated lots until a passenger books a ride. Avedian said this process can be frustrating, but that airport pickups often pay better than drop-offs because the fares are higher β which is why some drivers think they're worth the wait.
"You have a chance of maybe catching a 'unicorn,'" he said, referring to the highest-paying trips. He added that many airport riders are business travelers who can expense their trips and are therefore less likely to balk at a high fare or not tip.
While robotaxis are already operating in the LA market, Avedian isn't overly concerned about robotaxis impact on drivers' earnings in the short term. But he knows the clock is ticking.
"Long-term, definitely it's going to be a threat, and that's why we suggest everybody not treat Uber and Lyft driving as a career," he previously told BI.
If more airports approve robotaxis, Moore said she hopes riders will value the customer service humans provide.
"Customers often expect you to put their luggage in the trunk β is the robotaxi going to do that?"
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Correction: December 13, 2024 β An earlier version of this story misstated the number of weekly paid rides Waymo provided. It was more than 150,000, not 100,000.
Roundabouts. They trapped Clark Griswold in βNational Lampoonβs European Vacationβ and now theyβve tripped up a Waymo robotaxi. A video is circulating on social media showing a Waymo robotaxi going round and round on a roundabout β as if it is stuck in a loop. A Waymo spokesperson told TechCrunch there were no passengers onboard [β¦]
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Anadolu Agency/Getty Images
General Motors' decision to pivot away from robotaxis has one big critic: the Cruise founder Kyle Vogt.
Vogt, who resigned from the company in 2023, posted on the social-media platform X following GM's announcement that it would stop funding Cruise and fold it into the company's other driver-assistance efforts: "In case it was unclear before, it is clear now: GM are a bunch of dummies."
Vogt did not immediately respond to an interview request.
GM cited the hefty costs of fleet operation. Since taking control of the startup in 2016, GM has invested more than $10 billion in its development and operation.
The automaker has been trimming costs all year as demand for electric vehicles slows, and the company reckons with a longer road to profitability for these vehicles.
"Cruise was well on its way to a robotaxi business β but when you look at the fact you're deploying a fleet, there's a whole operations piece of doing that," GM CEO Mary Barra said on a conference call, according to CNBC.
Ending investment in Cruise's robotaxi business is the latest blow for the self-driving division. Commercial robotaxi rides have been on pause since October 2023, when one of its cars injured a pedestrian.
Vogt's departure last year came just weeks after the company suspended all autonomous operations. The company has since resumed autonomous-vehicle testing with safety drivers in Arizona and Texas.
GM isn't the first legacy car company to scrap autonomous-vehicle funding. In 2022, its rivalΒ Ford pulled out of its joint venture with Argo AI.
Meanwhile, Elon Musk's Tesla is all in on robotaxis, and the tech giant Alphabet is barreling forward, with driverless Waymo rides open to consumers in many cities.
Still, some investors seemed to welcome GM's decision to pull Cruise's funding in favor of $2 billion in annual savings, sending GM's stock price up more than 3% in after-hours trading Tuesday. Shares fell more than 4% in trading Wednesday.
"While some bulls may have hoped for external funding to give Cruise a life extension, we strongly believe that most investors did not want to see GM commit more capital to Cruise," Joseph Spak, a UBS analyst, wrote in a note to clients.
Anadolu Agency/Getty Images
General Motors' decision to pull the plug on Cruise shows that building a robotaxi business is hard, really expensive β and fraught with risk.
The automaker invested more than $10 billion in Cruise since taking control of the self-driving startup in 2016.
Along with Google-backed rival Waymo, Cruise moved quickly to get its fleet of driverless Chevrolet Bolt robotaxis on the road.
Both companies got the green light from regulators to operate their robotaxis as a ride-hailing service in San Francisco in August 2023. Just months later Cruise was banned from operating in California after one of its driverless cars seriously injured a pedestrian.
The incident prompted Cruise to recall its entire fleet of robotaxis. An investigation by California's justice department subsequently found Cruise had failed to disclose key details about the crash to regulators.
The company struggled to recover, while rival Waymo raced ahead. CEO Kyle Vogt resigned in November 2023, and Cruise laid off nearly a quarter of its staff a month later.
Kimberly White/Getty Images
Cruise restarted testing its self-driving technology earlier this year, and even announced a partnership with Uber to offer robotaxi rides on the Uber app in August, but that wasn't enough to stop GM from pulling the plug.
CEO Mary Barra cited "the considerable time and expense required to scale a robotaxi business in an increasingly competitive market" on a call with analysts.
John McDermid, professor of software engineering at the University of York in the UK, said: "I think it's a recognition of how challenging it is and how hard it is to make money in the robotaxi business. Even if you can solve the technical problems, it's a tough place to be."
Saber Fallah, professor of safe AI and autonomy and director of the Connected Autonomous Vehicle Research Lab at the UK's Surrey University, told Business Insider that Cruise had moved too quickly in deploying its driverless robotaxis at scale in San Francisco.
He said the AI technology underlying robotaxis such as Cruise's and the regulatory processes for certifying driverless cars were not advanced enough to ensure they could handle the kind of complex scenarios often found in urban environments.
Analysts at Bank of America said in a Wednesday note: "We believe GM's move also potentially implies that other companies (Tesla & Waymo) have better tech and/or that the market may not be appealing for later entrants. Waymo is already offering a robotaxi service across several US cities and Tesla plans to launch its service in 2025."
Waymo has been by far the most successful, with the robotaxi startup now offering 150,000 paid rides a week and planning to expand into a host of cities next year.
Waymo has also faced regulatory scrutiny. It issued two recalls this year after incidents in which its robotaxis collided with a towed pickup truck and a telephone pole.
Amazon-backed Zoox, which has begun rolling out its toaster-shaped robotaxis in San Francisco and Las Vegas, is also facing regulatory investigations over two crashes involving its self-driving tech and whether its steering wheel-less robotaxis comply with federal safety rules.
Tesla, meanwhile, has perhaps the most ambitious plans of all. In October Elon Musk unveiled the "Cybercab," an autonomous robotaxi with no steering wheel or pedals, in October.
Musk said the $30,000 vehicle would enter production in 2027, and that Tesla owners would be able to operate a fleet of Cybercabs as their own ride-hailing business.
Tesla
Tesla also plans to have unsupervised fully-autonomous Model 3 and Y vehicles on the road in California and Texas next year.
Experts previously told BI Musk's plan would face huge regulatory challenges, with the EV maker also facing a federal probe into its Full-Self Driving assisted driving system after a number of crashes.
Fallah said companies such as Tesla and Waymo looking to build robotaxi fleets were likely to face similar problems to Cruise.
"The idea of robotaxis that can be driven anywhere, anytime without human involvement is really more hype than reality," he said. "We need much more advanced AI in order to solve this problem."
Some industry players may be starting to agree. GM said it would switch its focus from robotaxis to advanced driver assistance systems that require driver supervision.
General Motors declined to comment.
Waymo is partnering with Moove, an African mobility fintech that offers vehicle financing to gig workers, to handle fleet management operations for its robotaxi service in Phoenix and, soon, Miami.Β The partnership marks several firsts. It will signal Waymoβs entry into Miami. And itβs also the first time Moove will enter the U.S. market and [β¦]
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Matt York/AP
Some Uber and Lyft drivers said the driverless taxis operating in their markets are driving down their earnings.
Jason D, a 50-year-old Uber driver based in Phoenix, told Business Insider it's become harder to make money in recent years due to increased competition with human drivers, lower fares, fewer tips from riders, and higher operating costs. Now, he said the rollout of Waymo One robotaxis has made this problem even worse.
"Driverless taxis are flooding an already competitive Phoenix market and taking money from human drivers," said Jason, who drives full-time and asked that his last name not be included for fear of professional repercussions.
Several companies are competing for a share of the US robotaxi market. However, Waymo One, Alphabet's autonomous taxi service, announced in August that it was providing more than 100,000 paid rides weekly in Los Angeles, San Francisco, and Phoenix. Waymo One also plans to expand to Atlanta and Austin early next year and will be facilitated through the Uber app. While the robotaxi industry could be slowed by regulatory hurdles and safety concerns, ride-hailing experts previously told BI that growing adoption would likely hurt Uber and Lyft drivers' earnings in the years to come. Some drivers told BI this is already happening.
To be sure, it's unclear how much robotaxis like Waymo One's are currently impacting drivers' earnings. Carl Benedikt Frey, a professor of AI and work at the Oxford Internet Institute, previously told BI there's little evidence that robotaxis like Waymo One have had a significant impact on Uber and Lyft drivers' earnings so far. But as more robotaxis hit the road, and fare prices come down, he said he would expect drivers' income to take a hit.
"As the technology gets better and cheaper, drivers will feel it in their wallets," Frey said. "We've seen this movie before: When Uber first showed up, it reduced traditional taxi drivers' earnings by about 10%."
Waymo and Uber did not respond to BI's request for comment. In February, an Uber spokesperson told BI that the company hadn't seen any significant impacts on drivers' earnings in Phoenix and Las Vegas, the two cities where Uber had autonomous vehicle partnerships at the time.
A Lyft spokesperson did not respond to BI's question about the impacts driverless taxis could have on ride-hailing drivers but said the company's goal is to build a hybrid network of human drivers and autonomous vehicles. Additionally, Lyft partnered with Mobileye to roll out autonomous vehicles on the Lyft network.
John, a 43-year-old Uber and Lyft driver based in Phoenix, said he said he thinks Waymo One's robotaxis have hurt his earnings. He sometimes asks his passengers about their experiences using driverless taxis to get a better understanding of his competition.
He said Waymo One autonomous vehicles compete with him for rides and are sometimes cheaper than Uber and Lyft trips, which he thinks could deter passengers from using traditional ride-hailing services. John's identity is known to BI but has been withheld for his fear of professional repercussions.
Comparing the costs of Waymo One against Uber or Lyft is difficult because prices vary by market, length of trip, promotional offers the passenger may have, and whether the client tips a human driver.
There is some relief for human drivers: Restrictions on where robotaxis can drive could help limit the impact on ride-hailing drivers.
Brad, a full-time Uber driver based in Los Angeles, said he doesn't feel too threatened by Waymo One robotaxis in the city because they primarily offer shorter rides that he doesn't consider to be very profitable.
"I stopped picking up local rides a long time ago," said Brad, whose identity is known to BI but has been withheld for his fear of professional repercussions.
He added the most profitable rides tend to be airport trips β specifically when he picks up passengers from their terminals β and robotaxis aren't allowed at the airport. Waymo One airport trips are still restricted in Los Angeles and San Francisco but are available in Phoenix.
Nicole Moore, a part-time Lyft driver and the president of the driver advocacy group Rideshare Drivers United, previously told BI that trips to and from airports are many drivers' "bread and butter." She said that competition from robotaxis for these rides would be a concerning development for drivers.
A key factor in the success of robotaxis could be whether riders feel comfortable without a human driver. In Phoenix, Jason said that robotaxis are sometimes a "hazard on the road."
"They often cut me off," he said. "I have seen them signal left and right before making a sudden turn across multiple lanes of traffic."
In June, Waymo One recalled 672 of its driverless taxis after one hit a utility pole in Phoenix β the company said there were no passengers in the vehicle.
Jason said some riders he speaks with are comfortable with driverless cars or even think they could be safer than those driven by humans. But he's firm in his stance.
"I am fundamentally opposed to driverless rideshare because I do believe my income is being impacted," he said.
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