Waymo Now Valued at $45 Billion

Before we get into this week’s top stories, a quick thank you to my first 100 (and counting) subscribers. It’s been fun getting back into the writing groove again and I’ve gotten some great feedback so far. If you missed my first analysis post, make sure to read Waymo’s Master Plan as I spent a lot of time on that piece (my first real article in several years too) and plan to do a few more.

Top Stories of the Week

Waymo Valued Above $45 Billion After Funding (link, no paywall) of $5.6B. The round was oversubscribed and led by Alphabet, with continued participation from a16z, Fidelity, Perry Creek, Silver Lake, Tiger Global, and T. Rowe Price (link). There were some heavy hitters involved this time around, so I put a lot more credence in this round than prior fundraising announcements where Alphabet is just donating more money at a higher and higher ‘valuation’.

Waymo One is now providing over 150,000 paid trips and driving over 1 million fully autonomous miles every week (link). But a million fully autonomous rides isn’t cool. You know what’s cool? A billion autonomous rides.. 

Lots of Waymo this week, but hey, credit where credit is due! The company is growing quickly, and firing on all cylinders. Waymo’s product is also great, they’re raising billions of dollars, and scaling trips quickly too. It reminds me of the early rideshare days but there’s not a real competitor like Uber had with Lyft so will Waymo be able to run away with things? Well, unless they start pouring gas on the fire, I don’t think so.

Other than the technology and head start, what’s the moat in the business? Their hardware and tech is great, but Zoox, Cruise, and even Tesla aren’t far behind so why do customers have to get into a Waymo in the future. The answer is they don’t. There aren’t any real network effects in the business as Waymo pivots towards a technology platform. Waymo will be just another AV provider, plugged into a mobility platform like Uber.

And even though Waymo is killing it right now, don’t forget that Uber does over 1 million trips per hour and is a cash generating machine. In fact, Uber’s valuation currently sits at ‘just’ $150 billion (as of 10/31/24) and they’re doing 217 million rides per week (not to mention this little business called Uber Eats that they run). But Waymo is doing 150,000 trips per week and valued at $45 billion. At these prices, I’m bullish on Uber and bearish on Waymo.

Tesla has been testing a robotaxi service in the Bay Area for most of the year (link).

GM CEO Mary Barra suggests that Cruise could still develop a custom-built autonomous vehicle in the future, even though plans to produce the Origin have been scrapped (link).

Announcements | New Stuff

Zoox custom robotaxis are finally coming to San Francisco and Las Vegas in the coming weeks (link). This is a unique form factor but I’m not sure there’s any real benefit over a normal car (ie what Waymo uses).

Waymo is working on Scheduled Rides (link). This is a neat product for customers but I feel like it’s going to hurt Waymo’s utilization even further. There’s a reason why it costs 2-4x to book a private SUV to take you to/from the airport instead of just calling an Uber Black. Scheduled rides are inefficient since they require more of a buffer in between rides and since every Waymo is the same, there’s not much value in getting a ‘favorite driver’ here.. I’m not sure about this one..

Waymo’s patent reveals vehicle routing tailored to the rider’s preference for interaction level with the vehicle (h/t FoT).

Cool Ride

Had to pick up outside of LAX, but soo worth the effort to ride Waymo 😎(link). If you’re not going to shell out the big bucks for Uber/Lyft Black and get curbside pickup at LAX, might as well hop on a rental shuttle, exit LAX, and call a Waymo to avoid the dreaded LAXit lot.

AVs behaving badly

4 Waymo robots struggle to pass each other while passing a double parked Amazon delivery van (link).

Other Stuff

Challenging Economics Will Slow The Deployment Of Robotaxis (link). 

Sell robotaxi miles at $1 a piece, on $.20 per mile costs, across 10 million 100k mile per year capable vehicles is not so bad a business model (link). I agree that you can sell miles for $1 a piece, but the $0.20 per mile in costs seems low to me. Guy has a cool title though.

Seniors embrace the future of transportation with Waymo (link). This is a sponsored piece by Waymo in the San Francisco Standard but I figured I’d include it anyway since it reminded me of a piece I wrote for Forbes some years ago about why senior citizens are flocking to Uber (not sponsored by Uber, but maybe I should have gotten paid..). I didn’t read anything compelling in the SF Standard article about why Waymo is so great for seniors though. If anything, I’d argue that Uber/Lyft are much better for seniors, since drivers are there to assist getting in/out of the car, help with pick-up/drop-off if the rider can’t find the car, etc. So this idea sounds great in a marketing campaign but not so sure about real life.

Robotaxis Are No Friend of Public Transportation (link). I had a feeling David would chime in on this topic from last week and I’m glad he did. I don’t blame Waymo for cozying up to transit, since this is another ‘sounds good in theory’ idea but we already know from 15 years of ridehail experience and data that this just won’t work.

Waymo now at #14 in the App Store with 51k 5 star reviews (link). This is up three places from the last time we reported in the second edition.

Until next week.

-Harry