In this report, we look at Waymo, a company leading the pack in self-driving technology. We also examine some recent developments that are keeping it ahead in the race for autonomous cars.

  • In December 2016, Alphabet announced it had spun off the Google self-driving car project it had been working on into an independent entity called Waymo.
  • In 2017, Waymo completed 352,545 miles of autonomous driving on California public roads.
  • On January 30, 2018, Fiat Chrysler Automobiles announced an agreement “to supply thousands of Chrysler Pacifica Hybrid minivans to Waymo to support the launch of the world’s first driverless ride-hailing service.”
  • Waymo has developed its proprietary self-driving system entirely in-house, and in the process, has managed to cut the cost of the lidar sensors (ranging technology that uses laser light) it uses by nearly 90%.
  • Waymo had previously announced that it was looking to commercialize its self-driving technology, and develop and launch a fully autonomous car by 2020.

Waymo—The Pioneer of Autonomous Ride-Hailing

The day of “OK, Google, call me a (driverless) cab” is getting closer. In January 2018, Fiat Chrysler Automobiles announced an agreement “to supply thousands of Chrysler Pacifica Hybrid minivans to Waymo to support the launch of the world’s first driverless ride-hailing service.” This was the latest move by Waymo, the autonomous-vehicle firm that was spun out from Google’s parent company Alphabet.

In this report, we profile Waymo to better understand what sets it apart from other contenders in the race for autonomous cars.

A Brief Timeline of Key Milestones in Waymo’s Journey

Google’s parent company Alphabet has been working on developing vehicles that can drive autonomously—i.e., without a human driver—since 2009. At the time, the project was called “the Google self-driving car project.”

The first tests were done using modified Toyota Prius vehicles that drove around Alphabet’s headquarters in Mountain View, California.

Nine years and over 4 million miles of self-driving tests later, the Google project has come into its own.

In December 2016, Alphabet revealed that it had spun off the project—which, until then, had been part of the firm’s closely guarded research unit, Google X—into an independent entity under its umbrella called Waymo.

Waymo creates self-driving systems that can be fitted to cars, allowing them to drive autonomously. In creating a stand-alone company, Alphabet is committed to commercialize the project and produce and launch a fully autonomous car by 2020.

Waymo recently ordered “thousands” of Chrysler Pacifica Hybrid minivans from Fiat Chrysler Automobiles and announced that it was set to open its autonomous ride-hailing service to the public, beginning in Phoenix, Arizona, this year.

This indicates that Waymo is fiercely determined to achieve this goal, possibly well ahead of time.

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Connected Cars Versus Autonomous Cars

We begin by ironing out some definitions. It is important to distinguish between connected cars, which have been on the market for several years now, and autonomous or self-driving cars.

Connected cars: These are vehicles that can communicate with each other and with those around them using mobile technology and the Internet. Connected cars still need to be operated by a human driver.

Autonomous cars: A self-driving or autonomous car is one that can navigate on its own, without the presence or supervision of a human driver. It uses sensors, cameras and artificial intelligence (AI) to gauge its surroundings and drive smoothly.

An autonomous car does not require connected technology to be built into it―it should be able to function independently of human control or an external machine. However, both vehicle types stand to benefit from incorporating elements of each of these technologies.

Connected technology helps autonomous vehicles to receive real-time updates on traffic and new developments on roads, allowing for safe and efficient navigation.

Autonomous technology, such as sensors and cameras placed on the exterior of conventional and connected cars, allows drivers to park easily and notifies them when people or objects are too close.

Why Waymo Is Leading the Race in Autonomous Cars

Apart from being reared at Alphabet’s stables, giving it complete access to the firm’s sophisticated technology, profound expertise and commercial clout, there are four other factors worth noting that make Waymo unique:

  1. Its state-of-the-art self-driving technology.
  2. The number of autonomously-driven miles it has racked up, more than all the competition combined.
  3. The self-driving technology was created entirely in-house, allowing Waymo to cut hardware costs considerably.
  4. The company aims to expand the application of its technology to other services and sectors.

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1. State-of-the-Art Self-Driving Technology

The cutting-edge technology Waymo uses has raised the bar for all contenders in the race to build the best autonomous car. Apart from nine cameras placed around the car, Waymo’s system contains sensors that work using radar and lidar technologies.

Radar uses radio waves and lidar uses laser light to detect objects around the sensors and measure the distance between them. These cameras and sensors constantly gather data, which is processed by the system’s software and allows the car to navigate through traffic independently.

The competition cannot yet claim that their technology enables fully autonomous driving. Cars that use the self-driving systems made by competitors Mobileye or Delphi, such as Tesla’s vehicles, facilitate automatic driving, but under human supervision.

Previously, Waymo’s test cars relied mainly on medium-range lidar that allowed the vehicle to detect people and objects only within a limited radius; this was the only kind of lidar that existed. Recently, the company created two new categories of lidar technology:

  1. Short range: This gives “the car a completely uninterrupted surround view—under, in front, behind and next to the vehicle’s body—so (it) can safely see small people and objects, no matter how close they are to the car.”
  2. Long range: This allows the car to detect even “a football helmet two full football fields away.”

2. More Autonomously-Driven Miles Under its Belt than All the Competition Combined

Waymo has conducted extensive research by testing its cars on public roads in the US. The most keenly watched statistics are those documented by the Autonomous Vehicle Disengagement Reports released by the State of California Department of Motor Vehicles, where numerous automakers conduct tests.

  • Since its inception in 2009, Waymo’s vehicles have self-driven over 4 million miles in 25 US cities.
  • In 2017 alone, Waymo’s vehicles recorded 2 million miles in driving tests. Between December 2016 and November 2017, Waymo recorded 352,545 autonomously-driven miles on public roads in California, a little over half of the 637,868 miles recorded in the year-ago period, which was its best run.
  • This is significantly higher than GM’s 131,676 autonomously-driven miles on California public roads and the combined 22,584 miles recorded by the competition’s cars during the same period in 2017.

BMW, Ford, Volkswagen, Honda and Tesla were among those that did not conduct tests on California public roads during this period. Tesla said that it has been testing in “shadow mode,” where “features run in the background without actuating vehicle controls in order to provide data on how the features would perform in real world and real-time conditions.”

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All of this autonomous driving has paid off. Waymo’s software has improved substantially since 2015. One measure used to check the software’s capability is the disengagement rate: this is the number of times test drivers need to take over when software fails or for safety reasons.

In 2015, Waymo’s test drivers had to disengage 0.8 times for every 1,000 miles driven by its vehicles on public roads in California. In 2016, this rate dropped to 0.2 times per 1,000 miles driven, which is much less than the rate recorded by its competitors, implying a greater degree of sophistication in its technology. This rate remains the same for 2017 as well.

3. Its Self-Driving Technology was Developed Entirely In-House, Allowing Waymo to Cut Hardware Costs Considerably

Waymo developed its state-of-the-art self-driving system entirely in-house, which has helped in lowering the cost of lidar technology and given the company an almost-monopolistic edge over its competitors, even if it is only temporary. A single high-end lidar sensor used to cost $75,000, according to Waymo, but it has since managed to slash this by 90%.

In December 2016, when Waymo’s CEO, John Krafcik, was spinning off the firm from within, he stated that Waymo was actively looking for suppliers to work with and was hoping to bring costs down further in a drive to commercialize the system.

We believe car manufacturers are going to seek Waymo’s offering over the competition, until competing firms are able to develop a similarly sophisticated yet affordable system that enables complete autonomy in driving, because of Waymo’s:

  1. Proprietary self-driving system that includes breakthrough technology and software;
  2. Proven track record for safety and mileage; and
  3. Successfully managing to significantly decrease costs.

4. Plans to Expand the Application of its Technology to Other Services and Sectors

Waymo has mentioned it targets to expand its technology beyond personal use and apply it to other services and sectors such as ridesharing and logistics.

Waymo has created a passenger-only prototype for a cab, which does not have pedals or a steering wheel. In October 2015, the company announced that it had successfully tested the car in Texas, with a blind passenger riding in it solo, and advocates the use of its technology to help disabled passengers travel independently.

Although Waymo has yet to openly trial its technology for use in taxis, Google Inc., the company that was responsible for the project (and whose name has since been changed to Alphabet), filed a patent on June 22, 2015, in the US, titled “Determining Pickup and Destination Locations for Autonomous Vehicles,” which suggests plans for a taxi service. Figure 3 exhibits the drawings excerpted from the company’s patent number 20160370194, which was recently made public.

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Waymo is not alone in trialing technology for taxi services. Uber has already tested self-driving cabs with an engineer present, in Pittsburgh, and MIT-spinoff nuTonomy has run a pilot with autonomous cabs in Singapore. Although these two firms have a leg up in the cab-hailing sector, both appear to be far from achieving the level of sophistication that Waymo has reached in autonomous-driving technology.

However, recent news suggests that the race for the leadership in self-driving technology is about to heat up. In February 2017, Waymo filed a lawsuit against Uber and Anthony Levandowski, a key former member of Google’s autonomous vehicle research team, alleging that the taxi company had stolen its trade secrets and infringed its patents related to lidar technology.

Waymo claims that Levandowski unlawfully downloaded data while he was employed at Alphabet and that it learnt of the infringement when a supplier to both firms inadvertently sent an e-mail to Waymo that was intended for Uber. The dispute is still unsettled and much has happened over the year, including Levandowski pleading the fifth amendment during depositions, which invokes his right to refuse answering self-incriminating questions. He has also been dismissed from Uber for refusing to co-operate with its internal investigations.

The jury trial began on February 5, 2018, and is expected to end in the week of February 19, 2018 but the verdict announcement date is subject to how long the jury takes to consider the hearings.

Although the outcome of the lawsuit remains to be seen, Waymo still appears to be the clear leader, in terms of progress in self-driving technology.

Barriers to Immediate Commercialization

Despite its technological advancements, there are two key factors holding Waymo back from commercialization: road transport regulations and high costs. Safety is another consideration.

Road transport regulations: More states in the US have come to allow self-driving cars, and each year the number of states considering legislation has grown, but the laws vary by state and are quite strict. This significantly impacts conducting tests in varied environments. Waymo has tested its technology in other states, where allowed, and in varying weather conditions, however, this still does not make it applicable in all types of traffic situations across the globe.

Costs: Lidar technology is going through an evolution each year just as computers did—getting smaller, cheaper and more powerful, but is still rather expensive. Waymo needs to identify suitable suppliers to partner with and bring down manufacturing costs further. Car buyers will have to pay for the price of the car plus the cost of the system, and may view the additional cost as undesirable until Waymo is able to achieve greater economies of scale in manufacturing.

Safety: Another factor that is likely to discourage consumers from adopting this technology is the safety of autonomous vehicles. Although, according to Waymo, vehicles that run its technology required relatively little human interference, 75% of US consumers said that they are not yet ready to accept self-driving cars, according to a March 2016 poll conducted by the American Automobile Association.

What We Think

Waymo is far ahead of its competitors in terms of R&D. With the progress it has achieved with respect to its technology and extensive road tests, we see little that is holding it back from attaining the leading position in an as-yet undeveloped market.

The company will only realize true market leadership when it can commercialize its technology. However, first it must overcome the near-term regulatory and cost hurdles. With a large number of consumers still wary of self-driving technology, mishaps, such as Tesla’s cars running into accidents when they are in Autopilot mode, do little to help the morale and attitude toward the technology.

Waymo said that it aims to release a fully driverless vehicle for the consumer market by 2020. Its recent order of numerous vehicles for autonomous ride-hailing is evidence of it single-mindedness to maintain its lead in the autonomous car market and realize its goal well ahead of time.




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