Driverless cars are here. Definitely a magical experience. It was just smooth. It just works. This is crazy. Like, I heard about this when I was a kid, but, like, it's here now. But the public is still divided. I couldn't trust, I wouldn't trust it. I just kind of believe that the cars should be driven by a person. I can't imagine a car driving off the bridge and then navigating around here with all the people walking. Waymo is in pole position, delivering 22 million driverless miles in Los Angeles, San Francisco, Phoenix, and Austin. It's been kind of wild in the last couple of years to see the progression of the technology. All of the learning we had over the last 15 years has started to compound, and things are moving faster. But less tested players, they're about to jump into the ring, including Tesla, whose track record of empty promises could cast more scrutiny on the movement.

For better or for worse. The expectation we don't have a lot of things out there that I just hear people are so excited about other than this day! I'm Deirdre Bosa. And this week in tech cruising or crashing into our driverless future. San Francisco has become a city of driverless cars. I don't want a human anymore. I want a Waymo. Google-owned Waymo is leading the way. Paid rides doubled in just a couple of months, and rider-only miles; they tripled in less than a year. Ten years ago, you had demonstrators with people behind the wheel as so-called safety drivers. And today there is an empty car and you step in and you get driven by the car magically. I think for anybody not familiar with the technology, that this is something very close to magic. Waymo says it understands the stakes. Our mission is to build the world's most trusted driver. And the stakes of that are multiple. What began as a moonshot 15 years ago under the Google

umbrella, it has become mainstream in some of America's largest cities. Its high-end electric vehicles can be found all over the roads here in San Francisco. But what hinders its progress in the rest of America? Skepticism. In the early days, people set very high expectations for how quickly this technology was going to be ready. And as an industry, we did not meet those timelines. For many consumers, driverless cars still seem like something from a sci-fi movie. And the number one concern is safety. If the people that are behind driverless cars wanted to increase confidence, it would be like, Show me, you know, 10,000 practice runs that worked perfectly. So Waymo is on a mission to do just that, using data to back up its case, a new public safety hub that compares driverless miles to human-driven miles and concludes that robotaxis are not just safe, but safer. Fewer airbag deployments. Fewer crashes causing injury, and fewer police

reported crashes than human drivers. Riders who have taken Waymo, they say they feel safe, too. I actually felt much safer getting in the Waymo than I do. And just like most cars, especially the way some Ubers drive. Oh, a bajillion percent because they have like so many sensors and like that computer sees everything. I definitely trust a computer more than a human because a computer can't lose attention, right? It's always paying attention to 360 as opposed to human. As a woman, I am concerned a lot of the time after going home after nights out about like who my driver is going to be. And I think that's the really nice part about it. And that's what's also helping me not be as concerned about safety is because the actual biggest safety concern has been dealt with. Now, other competitors are ramping up their own efforts and looking to capitalize on the moment. There's Amazon with Zoox. Amazon in this space, rolling out its Zoox cars later

this year or early next. Its vehicles are more like small buses, and they've logged more than 700,000 driverless miles testing with employees here in California and in Las Vegas. It says it'll deploy its fleet in San Francisco soon. Wave is a London-based startup that has raised more than $1 billion. It develops autonomous systems for self-driving vehicles, and it's been testing its technology on British roads since 2018. There's also GM-owned cruise, resuming operations after an accident in 2023 led regulators to ground its fleet. But the most well-known player talking up the driverless moment, that's Tesla. Elon Musk has been promising an autonomous taxi service as far back as 2016, part of his master plan, part two. It's still missing one key thing. I haven't seen a Tesla Robotaxi, so today's autopilot is actually an assisted system. It's really far behind. That could all change on October 10th, what Musk has

dubbed robotaxi day. All eyes on the robotaxi event, which is on October 10th. And I think, you know, there could be some surprises there. There are no shortage of skeptics. I just think they're ways off. And, you know, whatever Elon rolls out on October 10th, the fanboys are going to be all over it. They're going to get really excited about it. But when you think about the technical capabilities that go into just actually putting this car on the road and then having a trusted service, I think that's years away. The event itself has already been pushed back from August and even a great presentation. It doesn't guarantee a functioning, safe robotaxi network. I expect actually a great performance, um, showing the car, showing the stuff, but that doesn't mean anything yet. You know, the real test will come. What if the guys drive around with that vehicle? 100,000 people driving with that vehicle for two

years. And Tesla's Autopilot technology, which Musk says will serve as the foundation of its driverless tech; it's controversial. And all it takes to put driverless car momentum in reverse is one high-profile accident. In October 2023, as Cruise was expanding its own driverless taxi fleet, one of its vehicles struck and dragged a pedestrian 20ft, and. General Motors robotaxi cruise has dismissed nine key leaders in the wake of several safety investigations. Those were sparked by a crash in October in San Francisco that critically injured a pedestrian in California. Making clear the risks of having a robot at the wheel. A human driver would have quickly realized what happened, but the sensors on Cruise's autonomous vehicle did not. The consequences were swift. California's DMV issued the immediate suspension of Cruise robotaxis. Cruise's CEO Kyle Vogt, he resigned a few weeks later, and public perception of driverless cars took a step back a few years earlier, in 2018, when Uber was

testing its driverless cars in Arizona with a safety driver, it struck and killed a woman. Uber suspended all of its self-driving operations in the aftermath and eventually sold off the entire unit, getting out of the race altogether. There have been minor accidents, too. A Waymo in Phoenix crashing into a pole on the way to pick up a driver in May. And just a month earlier, Zoox was involved in two rear-end accidents causing minor injuries. Even though Waymo safety data shows that accidents among self-driving cars are actually more rare than those involving human drivers, these accidents contribute to an image problem and feeds into distrust of technology. At that time, they were still having glitches in the vehicle where they were crashing and stuff like that. And so nowadays I still have that fear. Just as Tesla and Elon Musk are about to jump into the ring with unproven technology. Would you feel comfortable right now stepping in front of a Tesla driverless car?

No. And broken promises. So any customer will be able to add or remove their car to the Tesla network. So expect this to operate as some sort of like a combination of maybe the Uber and Airbnb model. I feel very confident predicting autonomous robotaxis for Tesla next year. That was back in 2019. Probably two years from now. We make a car that has no steering wheels or pedals. Still making the same promises in 2023. What a lot of investors come back to, or everybody is, is your promises of full autonomy. Um, and you seem to be saying again, it's close. In my opinion, we probably will. There's a number of qualifiers there. I think, in my opinion, we probably will. So what do you think? In your opinion, you probably will. When? I mean, it does look like it's going to happen this year. It didn't happen last year. One important statistic in testing driverless cars.

that experts look at is critical disengagement, or how many miles the autonomous vehicle can drive itself before a human needs to intervene. The system encounters a situation that it cannot safely handle on its own. Bernstein did the math. Waymo cars can drive around 17,000 miles safely on average before a human driver needs to step in. With Tesla, it's only about 170 miles, suggesting that Waymo's technology is more reliable and presents lower safety risks. That's critical for building trust and scaling its services. Much of the gap has to do with a fundamental difference in Tesla's approach. Most of the existing driverless car industry relies on a variety of sensors, lidars, radars, and microphones. But Elon Musk has insisted that if humans can drive on vision alone, then cars should be able to as well. So as of now, Tesla FSD uses only cameras. We've yet to see a camera-only system reach our level of performance from a safety and scale perspective.

It's a cheaper strategy, too, which would make scaling up much easier, but largely unproven. It's easy to construct cases where the camera will not see, like you're driving into a tunnel and the tunnel is completely dark. So if there's a traffic jam right after the tunnel entrance, you would crash into that. A lidar or radar would see that, I mean, not see, but notice there's cars blocking the way. So this is why I think more sensors is better than less sensors, at least when we're talking about autonomous driving. Elon Musk is pulling out all the stops for October 10th robotaxi day, calling it the most significant moment for Tesla in nearly a decade. Wall Street is already thinking ahead to a driverless future. Jim, I know you saw this Bernstein note today where they argue that if it hadn't been for Gen AI, we might be talking about this year as the year autonomous driving turned a corner.

We could still look back on 2024 as the year of the robotaxi. These things happen slowly, then quickly. I think that's how many technology transitions happen. We're still in the part of the curve where in the cities we're in, it's quite significant and it's very visible in San Francisco; you go there and you see Waymo all over the place. And as driverless networks scale, there's going to be winners and losers. One of the fiercest debates surrounds ridesharing. Why talk to a stranger, sit in someone else's car, tip a driver if you don't have to. They have no emotion. They don't want chit chat. They don't want to ask me how I'm doing. They don't talk about the Eagles, they just drive. Uber seems to be hedging for such a future, citing partnerships with Waymo, Cruise, WeRide, Wayve... Firmly, putting itself right in the middle of the

shift. I think all of these technologies are going to bring a safer driver to the road, and it's going to be affordable and available to everybody. And hopefully, people will truly start ditching their personal car to have a robot driver who's very, very safe. You know, take them to the places that they want to go. That's ultimately what it's about. And we think that there are a number of companies out there that are building, that are building well and are building safely, and we want to partner with many of the players out there. In Austin and Atlanta, the only way to hail a Waymo will be through the Uber app for now, but the partnership could turn uneasy. In San Francisco, you hail a Waymo directly through the Waymo app, already providing hundreds of thousands of trips since opening to the public in June. Ride-sharing has become commoditized. Users and drivers can toggle from Uber to Lyft, looking for the cheapest ride or the highest fare with

no switching costs. Robotaxis, though, it's all about the technology and the data collected proprietary to those companies. Some reports estimate that Google and other investors have poured $13 billion into Waymo since it was established in 2009. Alphabet is planning to pour in an additional $5 billion. Uber, meanwhile, abandoned its own efforts to develop the technology in-house after that 2018 accident and in pursuit of profitability. Now it's positioning itself as the middleman. It's time to take this technology that is working, that is improving, that will get safer and safer and safer. Now it's time to commercialize that technology. And the commercialization requires, you know, high utilization of the cars, making sure that the repair, recharging of the cars, the fleet management in the city works and works economically, and that's what this partnership between ourselves and Waymo is all about. But what might stop companies from deciding they're better off cutting out the middleman?

Driver wages for Uber and Lyft have historically increased, but driverless cars don't have labor costs, and their hardware and maintenance costs will only come down. An important leg up against the rideshare giants in the long term. Waymo can absolutely be profitable. We have made massive improvements already on cost reduction for what it takes to operate our service, as well as the price of our platform over time. We're getting more effective at generating revenue from our vehicles as well. And we believe, of course, that it's possible to make not just a viable, but a compelling business around this. Waymo could eventually undercut Uber and Lyft on pricing. Still an open question, though, how long it takes for driverless cars to become mainstream and become profitable on their own. But if 2024 is any indication, that future, it's pulling up to your door.

Your Robotaxi Is Here, But Can You Trust It?

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