Does he have time to run the company with all the employee protests requiring his attention?
I can’t say anything.
Waymo, the secretive subsidiary of Google’s parent company, Alphabet Inc., is planning to launch the world’s first commercial driverless car service in early December, according to a person familiar with the plans. It will operate under a new brand and compete directly with Uber and Lyft.
Waymo is keeping the new name a closely guarded secret until the formal announcement, said the person, who asked not to be identified because the plans haven’t been made public.
So their monetization plan is to run a ride sharing service and own the cars. That’ll be interesting. It’s very capital intensive plus the costs of storing and maintaining the fleet of cars.
Now, cars are inefficiently used, almost 4%-5% utilization and rest are parked in garages or parking lot. By automating driver less cars, the service can be extended to 16-20 hours daily. Even though capital intensive, effective utilization of cars can be maximized.
If this is successful, Google can be challenging company for Uber & Lyft.
Yes, challenge them and defeat them
The demand curve isn’t that constant throughout the day. Just look at roads and traffic density. There’s a 2-3 hour peak in the morning and a 3-4 hour peak in the evening. That’s a total of 5-7 hours of peak. If they have a large enough fleet for peak, then what do all those extra cars do during non-peak? The most efficient thing to do would be to park them somewhere. Driving them around without passengers would create gas/electricity costs plus increase how often maintenance needs to be done while not generating any revenue.
If they only build a big enough fleet for off-peak, then there’ll still be a need for Uber/Lyft to add capacity curing peak times.
Deliver packages and/or food using robots???
That’s a whole different set of tech needed. Packages would be good (since it makes sense to deliver those during off-peak traffic) but has anyone designed the robots for that?
The demand curve issue is common for current greyhound services, Train services and Airlines across the world. Like they schedule services and optimize their transport services, Waymo fleets can also be optimized. The optimization varies with city to city, time of the day…etc various options.
The biggest challenge is on automation (driver-less) success, but not on cost, scheduling or optimization.
Google has additional features such as excellent infrastructure with Maps and Waze kind of applications (90M active users) to find the best route possible.
@tomato, have you ever tried the employee cab service? How automated is it really? I have seen a Waymo car driving on 280 and the driver’s hands were off the steering.
You just referenced industries that either:
- Lose tons of money and are subsidized by taxes
- Have generated a net operating loss over the history of their industry
You stated the advantage was they can run 16-20 hours a day unlike current utilization of 4-5%. The issue is there’s not constant demand for 16-20 hours a day, but there’s constant expense to have enough capacity for peak hours.
That’s not even counting the issue of the billions upon billions of capital to buy the cars first.
If Google wants to subsize an Uber/Lyft-like service, I would be happy to take advantage of it.
Time to short Google if they build a Waymo fleet. The expenditure will be HUGE and return will be negative for years to come. It will reflect very badly on Google’s leadership.
A car is not 100% engaged as it needs daily maintenance etc, 20 hours load, 2 hour idle and 2 hours maintenance. Connecting the caller to nearest available car is another routing issue.
Whatever you are telling is a scheduling issue with a fleet which can easily be resolved by some operational research algorithms.
Google or such big cash rich companies, this is not a major issue. When Uber is valued around 120B (which I am skeptical), google Waymo may fetch equally well.
IMO, Google may spin off Waymo easily.
Even today, google shares are expensive than FB and AAPL considering Return on Invested Capital (ROIC).
Shorting a stock affects until company produces proper results !
Many times, people were against TSLA like this way, shorting heavily. Even today, AAPL is getting shorted heavily and I keep on adding AAPL. Remember, Amazon relaxed its rules to sale Apple products as both giants may get benefited in that deal. Everything changes when AAPL declares result.
Key difference between Uber and Waymo: uber doesn’t own the cars and the drivers. If it does it will just be a taxi company and won’t be worth a tenth of its valuation.
Majority of uber fleet is not owned, but is using car owners.
Uber owns self-driving units, but trying to sell it.
On any case, driver less cars means that company needs to own or lease it from some where. Again, it is operational issue of the project, be it Uber or google. When it comes to ground, we will get to know more.