Waymo: What’s Next for Google’s Self Driving Car Company?

As part of a broader strategy to realign the company’s operations, Google announced on Tuesday that it would spin off the company’s self-driving car unit.  The new company will be called Waymo and the move is viewed as a signal that the underlying technology has moved beyond the development stage.

Stock Photo: CHIANG MAI,THAILAND – OCT 26,2015 : A man hand holding Uber app showing on Samsung in the car,Uber is smartphone app-based transportation network. (mrmohock / Shutterstock.com)

The announcement coincides with news that Uber was expanding its test of their autonomous delivery service from Pittsburg to San Francisco.  These moves are an indication of the hundreds of billions of dollars which are at stake in the race to develop commercially viable driverless vehicles.

Google, who was once viewed as the leader in developing technology in this space, has lost ground in recent years to a several companies who have been able to bring autonomous vehicles to the market.  This group includes companies such as Uber and Tesla, as well as several automakers who have integrated features of driverless cars into latest models.

United States Department of Transportation
Stock Photo: WASHINGTON, DC – JULY 17: Department of Transportation Headquarters in Washington, DC on July 17, 2015. (Mark Van Scyoc / Shutterstock.com)

The Department of Transportation has also set aside nearly $160 million in grants for its smart city initiative – a big part of which is dedicated to mobility solutions.  This has also drawn companies such as IBM, Intel, and GE into the space.  While these companies are not developing their own autonomous vehicles, their technologies will help to power the driverless roadways of the future.

Adding to the competition is Ford CEO, Mark Fields, who recently told Bloomberg that the company is ‘dedicated to putting autonomous vehicles on the road for millions of people, not just those who can afford luxury cars.’  In doing so, companies like Ford and Google will be at the forefront of the biggest disruption to transportation since the car was introduced more than 120 years ago.

Google Alphabet
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The spin-off allows Google parent Alphabet to position the car unit as a technology service provider to automakers and ridesharing services.  This could include Uber competitor Lyft as well as public bus services.  Another potential application would be long-haul trucking as autonomous vehicles would help to address driver shortages and safety concerns in the industry.

Since its inception in 2009, Google’s self-driving cars have logged more than 2.3 million miles.  Last year the company completed the world’s first completely driverless test when the vehicle helped a blind passenger navigate public roads in Austin, Texas.

Google spins off and launches Waymo, Google’s self-driving car company. (Image Courtesy of Google/Waymo)

According to sources, Waymo will remain a privately-held company under the Alphabet umbrella for the time being.  However, industry insiders speculate that rapid success could lead the company to IPO the Waymo unit as a separate entity.

Share of Google parent company Alphabet were trending up in pre-market trading on Tuesday.


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