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I tend to agree. Waymo ordered 62,000 Chrysler Pacificas with delivery slated for late 2018. Base retail on the hybrid model is $40,000USD. Even if they got an

I tend to agree. Waymo ordered 62,000 Chrysler Pacificas with delivery slated for late 2018. Base retail on the hybrid model is $40,000USD. Even if they got an unbelievably generous 50% discount, that means they're $1.24B USD serious, excluding the cost of the additional autonomous driving equipment. So this will either be one of the biggest debacles in Google/Alphabet's history, or they really are ready to go.

Fricken 8y ago
Waymo has also ordered 20k Jaguar I-paces. Rumour is they have invested about 11 billion in R&d so far, and I'm crudely estimating the cost of their 80k upcoming robotaxis to be around 12 billion. Alphabet is committed. Waymo estimates about 50 trips per day will be served per vehicle. At that rate, 80k robotaxis is enough to displace most of the taxi/rideshare services in the southwestern United States, though I'm not expecting to see all of them on the roads until 2022 or so. Waymo has a ton of work ahead of them. Mapping and validating in the ~100 square mile area of Chandler has taken them about 18 months so far, and supposedly they are on the verge of a commercial launch. Every city they hope to deploy in has differing signage, differing driving habits, and many funky intersections and road anomalies that need specific attention.
- rbranson 8y ago
  In this scenario there's no moat for Lyft/Uber either. If Waymo can meet demand, they'll be able to undercut ride sharing prices so deeply that most consumers will switch overnight. Banks will be falling over themselves to provide the massive credit they'll need to bankroll the expansion.
  - CPLX 8y ago
    > they'll be able to undercut ride sharing prices Why? I see comments like this constantly. But does anyone ever do even a basic spreadsheet to explain the unit economics of this argument? Low skilled people who can drive are pretty cheap and plentiful. Even if self-driving tech is flawless (spoiler: it's not and won't be soon) it still only replaces part of their responsibilities. Someone will still have to clean the cars for example. Presumably there will be some required level of human monitoring, etc. Conversely, capital and highly reliable technology isn't free. You can calculate pretty easily the rate at which it's profitable to substitute technology for labor, this is a trade-off we've literally been making for centuries. One one side you have plentiful cheap low skilled labor. On the other you have lasers, fast computers, graphics cards, cameras, and the associated programming inspection and maintenance costs. Why do we think the latter side is going to be cheaper in anything remotely like the near term?
    - Fricken 8y ago
      Waymo doesn't have a business model if it isn't cheaper. It probably won't be much cheaper in the near term.
      - CPLX 8y ago
        That's not true at all. There are a lot more use cases for self driving technology than taxi services. In fact I'm continuously perplexed as to why this specific use case, which is obviously the most challenging and likely to be the last to reach the market, is always first in these discussions.
        Fricken 8y ago
        There are very good reasons as to why Waymo and all the other major players are focused on robotaxis. A truck still needs to be able to drive in cities, and if you figure out how to automate all the other thing a trucker does you can replace 3 million of them. Big whoop. Robotaxis stand to challenge the economics of personal vehicle ownership, the potential market is many orders of magnitude larger.
        CPLX 8y ago
        Why can't they just have normal cars for sale that also drive themselves to start with? Like I have a car and recline and read a book on a commute most of the time. If snow gets crazy or there's very strange construction or a flooded road or a flat tire we go back to manual driving. That's plausible and incremental. No cleaning problems, no homeless people living in them, no need for remote monitoring, a far simpler liability and insurance situation, and so on. My assumption is we'll start talking seriously about robotaxis on the day this scenario is practical and battle tested. The idea of starting with taxis seems ludicrous in comparison.
        jonknee 8y ago
        > That's plausible and incremental. No cleaning problems, no homeless people living in them, no need for remote monitoring, a far simpler liability and insurance situation, and so on. These are all solved problems, I mean when was the last time you saw a homeless person camped out in a Zip Car? BMW's ReachNow vehicles are all over Seattle and they are clean, insured, fueled/charged and exactly 0 people live in them.
- ScottBurson 8y ago
  > Every city they hope to deploy in has differing signage, differing driving habits, and many funky intersections and road anomalies that need specific attention. The very fact that those things do need specific attention tells me they don't have true autonomy yet; they just have a way to fake it using detailed maps of known areas. I don't see how an autonomous vehicle can handle all the corner cases of real-world driving (construction zones, etc.) until it can also work reliably using only available sensor data, so that detailed mapping is no longer necessary.
  - notheguyouthink 8y ago
    The escalation of data collection will be immense though, once they deploy the fleet. Even if they have to have more human involvement than desired currently, I think the first few years will show growth they could have have dreamed of in the beginning. Which must be worrisome for competition.
jcfrei 8y ago
Waymo might also tell a different story: They've realized that a fundamental breakthrough in self-driving cars is unlikely to happen in the next decade and therefore there's no point in waiting any longer to perfect the technology - and instead rely on remote controlling of the cars for difficult situations. They can still gradually improve the self-driving systems but from a business perspective it might make sense to capture as much market share as possible right now.
- saas_co_de 8y ago
  This is right on. Waymo is not an autonomous car in the way people typically imagine them. More like a remote control street car on a digital track.
  - Animats 8y ago
    It doesn't work that way. Waymo's remote control does not even support direct manual remote control. It just lets the remote operator give some direction to the onboard systems.
    - saas_co_de 8y ago
      I am giving an analogy. Street car on digital track is the first part of it. The remote control aspects are there as well. It is not "direct" remote control. It is like a drone. You give a direction and the onboard computers execute on it. Direct remote control is not possible because of latency. But it also seems that the commercial launches of these vehicles might be dependent on 5G networks being available (lower latency, better reliability) in which case the remote control capabilities will be greatly enhanced before launch.
      - Animats 8y ago
        There's another startup, for self-driving trucks, which does have direct remote control. Their idea is that the trucks are self-driving for long-haul, and then the final non-Interstate part is remote controlled.[1] [1] https://phantom.auto/ https://phantom.auto/
a9a 8y ago
In all of these deal announcements, the key words are “up to”. That’s very different from a confirmed 62k order, and in all announcements related to that agreement timing of delivery was unconfirmed [0]. [0] https://mobile.nytimes.com/2018/05/31/business/waymo-chrysler-minivans.html https://mobile.nytimes.com/2018/05/31/business/waymo-chrysle...
chrischen 8y ago
You can always sell the cars if it fails.
brudgers 8y ago
At the scale of Alphabet, $1.25B about 1% of of 2017 revenue and about 5% of operating income. [1] Alphabet isn't betting the future on it. Relative to the automotive industry sixty thousand vehicles in 2018 compares to about 100,000,000 vehicles worldwide per year. [2] Compared to the number of cars in my driveway and the balance of my checking account, the numbers are big. At industrial scale, they are small. If all 60k vehicles were registered in California, it would look like rounding error on the 36,000,000 vehicles registered there. [3] [1]: https://en.wikipedia.org/wiki/Alphabet_Inc https://en.wikipedia.org/wiki/Alphabet_Inc. [2]: https://en.wikipedia.org/wiki/Automotive_industry#By_year https://en.wikipedia.org/wiki/Automotive_industry#By_year [3] https://www.dmv.ca.gov/portal/wcm/connect/5aa16cd3-39a5-402f-9453-0d353706cc9a/official.pdf?MOD=AJPERES https://www.dmv.ca.gov/portal/wcm/connect/5aa16cd3-39a5-402f...
- Symmetry 8y ago
  Corporations like Alphabet don't spend 1% of their revenue on something unless they're very confident it will pan out.
  - brudgers 8y ago
    Alphabet spent $12.5 billion on Motorola Mobility in 2011 and sold it to Lenovo for $3 billion three years later. The lost $9+ billion? Nobody really noticed. For Alphabet, $1 billion is mad money, not the rent. Self driving cars are a moonshot.
    - ipsum2 8y ago
      The 9 billion was spent on patents. See: https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_deal_by_Google https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_dea... Specifically, this section: "According to the filing, Google and Motorola began discussions about Motorola's patent portfolio in early July, as well as the "intellectual property litigation and the potential impact of such litigation on the Android ecosystem". Although the two companies discussed the possibility of an acquisition after the initial contact by Mr. Rubin, it was only after Motorola pushed back on the idea of patent sale that the acquisition talks picked up steam. The turning point came during a meeting on July 6. At the meeting, Motorola CEO Sanjay Jha discussed the protection of the Android ecosystem with Google senior vice president Nikesh Arora, and during that talk Jha told Arora that "it could be problematic for Motorola Mobility to continue to exist as a stand-alone entity if it sold a large portion of its patent portfolio". In connection with these discussions, the two companies signed a confidentiality and non-disclosure agreement that allowed Google to do due diligence on the company's patent portfolio."
jellicle 8y ago
No. The annual production of Pacificas is only 65K vehicles or so. Google ordered those vehicles in the same way that airplanes are bought. The "62,000" is over many years, and is purely speculative, and cancellable/modifiable as needed. Google is buying a couple thousand Pacificas in the near future. That's it. It's more or less a commitment to keep buying a couple thousand a year for the next however-many years, in exchange for a discount. It is NOT the case that Google is going to open a big box and find 62,000 vehicles inside in late 2018.

Fricken 8y ago

Waymo has also ordered 20k Jaguar I-paces. Rumour is they have invested about 11 billion in R&d so far, and I'm crudely estimating the cost of their 80k upcoming robotaxis to be around 12 billion. Alphabet is committed. Waymo estimates about 50 trips per day will be served per vehicle. At that rate, 80k robotaxis is enough to displace most of the taxi/rideshare services in the southwestern United States, though I'm not expecting to see all of them on the roads until 2022 or so. Waymo has a ton of work ahead of them. Mapping and validating in the ~100 square mile area of Chandler has taken them about 18 months so far, and supposedly they are on the verge of a commercial launch. Every city they hope to deploy in has differing signage, differing driving habits, and many funky intersections and road anomalies that need specific attention.

rbranson 8y ago
In this scenario there's no moat for Lyft/Uber either. If Waymo can meet demand, they'll be able to undercut ride sharing prices so deeply that most consumers will switch overnight. Banks will be falling over themselves to provide the massive credit they'll need to bankroll the expansion.
- CPLX 8y ago
  > they'll be able to undercut ride sharing prices Why? I see comments like this constantly. But does anyone ever do even a basic spreadsheet to explain the unit economics of this argument? Low skilled people who can drive are pretty cheap and plentiful. Even if self-driving tech is flawless (spoiler: it's not and won't be soon) it still only replaces part of their responsibilities. Someone will still have to clean the cars for example. Presumably there will be some required level of human monitoring, etc. Conversely, capital and highly reliable technology isn't free. You can calculate pretty easily the rate at which it's profitable to substitute technology for labor, this is a trade-off we've literally been making for centuries. One one side you have plentiful cheap low skilled labor. On the other you have lasers, fast computers, graphics cards, cameras, and the associated programming inspection and maintenance costs. Why do we think the latter side is going to be cheaper in anything remotely like the near term?
  - Fricken 8y ago
    Waymo doesn't have a business model if it isn't cheaper. It probably won't be much cheaper in the near term.
    - CPLX 8y ago
      That's not true at all. There are a lot more use cases for self driving technology than taxi services. In fact I'm continuously perplexed as to why this specific use case, which is obviously the most challenging and likely to be the last to reach the market, is always first in these discussions.
      - Fricken 8y ago
        There are very good reasons as to why Waymo and all the other major players are focused on robotaxis. A truck still needs to be able to drive in cities, and if you figure out how to automate all the other thing a trucker does you can replace 3 million of them. Big whoop. Robotaxis stand to challenge the economics of personal vehicle ownership, the potential market is many orders of magnitude larger.
        CPLX 8y ago
        Why can't they just have normal cars for sale that also drive themselves to start with? Like I have a car and recline and read a book on a commute most of the time. If snow gets crazy or there's very strange construction or a flooded road or a flat tire we go back to manual driving. That's plausible and incremental. No cleaning problems, no homeless people living in them, no need for remote monitoring, a far simpler liability and insurance situation, and so on. My assumption is we'll start talking seriously about robotaxis on the day this scenario is practical and battle tested. The idea of starting with taxis seems ludicrous in comparison.
        jonknee 8y ago
        > That's plausible and incremental. No cleaning problems, no homeless people living in them, no need for remote monitoring, a far simpler liability and insurance situation, and so on. These are all solved problems, I mean when was the last time you saw a homeless person camped out in a Zip Car? BMW's ReachNow vehicles are all over Seattle and they are clean, insured, fueled/charged and exactly 0 people live in them.
ScottBurson 8y ago
> Every city they hope to deploy in has differing signage, differing driving habits, and many funky intersections and road anomalies that need specific attention. The very fact that those things do need specific attention tells me they don't have true autonomy yet; they just have a way to fake it using detailed maps of known areas. I don't see how an autonomous vehicle can handle all the corner cases of real-world driving (construction zones, etc.) until it can also work reliably using only available sensor data, so that detailed mapping is no longer necessary.
- notheguyouthink 8y ago
  The escalation of data collection will be immense though, once they deploy the fleet. Even if they have to have more human involvement than desired currently, I think the first few years will show growth they could have have dreamed of in the beginning. Which must be worrisome for competition.

jcfrei 8y ago

Waymo might also tell a different story: They've realized that a fundamental breakthrough in self-driving cars is unlikely to happen in the next decade and therefore there's no point in waiting any longer to perfect the technology - and instead rely on remote controlling of the cars for difficult situations. They can still gradually improve the self-driving systems but from a business perspective it might make sense to capture as much market share as possible right now.

saas_co_de 8y ago
This is right on. Waymo is not an autonomous car in the way people typically imagine them. More like a remote control street car on a digital track.
- Animats 8y ago
  It doesn't work that way. Waymo's remote control does not even support direct manual remote control. It just lets the remote operator give some direction to the onboard systems.
  - saas_co_de 8y ago
    I am giving an analogy. Street car on digital track is the first part of it. The remote control aspects are there as well. It is not "direct" remote control. It is like a drone. You give a direction and the onboard computers execute on it. Direct remote control is not possible because of latency. But it also seems that the commercial launches of these vehicles might be dependent on 5G networks being available (lower latency, better reliability) in which case the remote control capabilities will be greatly enhanced before launch.
    - Animats 8y ago
      There's another startup, for self-driving trucks, which does have direct remote control. Their idea is that the trucks are self-driving for long-haul, and then the final non-Interstate part is remote controlled.[1] [1] https://phantom.auto/ https://phantom.auto/

a9a 8y ago

In all of these deal announcements, the key words are “up to”. That’s very different from a confirmed 62k order, and in all announcements related to that agreement timing of delivery was unconfirmed [0]. [0] https://mobile.nytimes.com/2018/05/31/business/waymo-chrysler-minivans.html https://mobile.nytimes.com/2018/05/31/business/waymo-chrysle...

chrischen 8y ago

You can always sell the cars if it fails.

brudgers 8y ago

At the scale of Alphabet, $1.25B about 1% of of 2017 revenue and about 5% of operating income. [1] Alphabet isn't betting the future on it. Relative to the automotive industry sixty thousand vehicles in 2018 compares to about 100,000,000 vehicles worldwide per year. [2] Compared to the number of cars in my driveway and the balance of my checking account, the numbers are big. At industrial scale, they are small. If all 60k vehicles were registered in California, it would look like rounding error on the 36,000,000 vehicles registered there. [3] [1]: https://en.wikipedia.org/wiki/Alphabet_Inc https://en.wikipedia.org/wiki/Alphabet_Inc. [2]: https://en.wikipedia.org/wiki/Automotive_industry#By_year https://en.wikipedia.org/wiki/Automotive_industry#By_year [3] https://www.dmv.ca.gov/portal/wcm/connect/5aa16cd3-39a5-402f-9453-0d353706cc9a/official.pdf?MOD=AJPERES https://www.dmv.ca.gov/portal/wcm/connect/5aa16cd3-39a5-402f...

Symmetry 8y ago
Corporations like Alphabet don't spend 1% of their revenue on something unless they're very confident it will pan out.
- brudgers 8y ago
  Alphabet spent $12.5 billion on Motorola Mobility in 2011 and sold it to Lenovo for $3 billion three years later. The lost $9+ billion? Nobody really noticed. For Alphabet, $1 billion is mad money, not the rent. Self driving cars are a moonshot.
  - ipsum2 8y ago
    The 9 billion was spent on patents. See: https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_deal_by_Google https://en.wikipedia.org/wiki/Motorola#Motorola_Mobility_dea... Specifically, this section: "According to the filing, Google and Motorola began discussions about Motorola's patent portfolio in early July, as well as the "intellectual property litigation and the potential impact of such litigation on the Android ecosystem". Although the two companies discussed the possibility of an acquisition after the initial contact by Mr. Rubin, it was only after Motorola pushed back on the idea of patent sale that the acquisition talks picked up steam. The turning point came during a meeting on July 6. At the meeting, Motorola CEO Sanjay Jha discussed the protection of the Android ecosystem with Google senior vice president Nikesh Arora, and during that talk Jha told Arora that "it could be problematic for Motorola Mobility to continue to exist as a stand-alone entity if it sold a large portion of its patent portfolio". In connection with these discussions, the two companies signed a confidentiality and non-disclosure agreement that allowed Google to do due diligence on the company's patent portfolio."

jellicle 8y ago

No. The annual production of Pacificas is only 65K vehicles or so. Google ordered those vehicles in the same way that airplanes are bought. The "62,000" is over many years, and is purely speculative, and cancellable/modifiable as needed. Google is buying a couple thousand Pacificas in the near future. That's it. It's more or less a commitment to keep buying a couple thousand a year for the next however-many years, in exchange for a discount. It is NOT the case that Google is going to open a big box and find 62,000 vehicles inside in late 2018.