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If you buy Alphabet stock you're betting on the whole company doing well. Google makes around $300B a year. Uber's entire business makes around $50B and that t

• mettamage 1y ago
  I don’t think Waymo is very likely a losing money experiment. I give them a 50% chance to be successful within the next 10 years. Successful being that self-driving cars are able to operate in 50% of the world/terrain types/region types, probably within another 10 years to scale up.
  • robotresearcher 1y ago
    They have already spent an enormous amount of money. It’s hard to see how they could make it back quickly, if ever. I’d like to be wrong, but I expect they will continue to be a money losing experiment for a long time yet.
    • crazygringo 1y ago
      How much money do they make off the average person in the value of ads shown per year? Now compare to how much money the average person spends on driving per year. If Waymo winds up running half the market in autonomous transportation over the next several decades, it'll make search look like peanuts in comparison.
      • robotresearcher 1y ago
        The entire global taxi market is ~$250B a year. Google made ~$265B from its ads last year.
        • crazygringo 1y ago
          Not the global taxi market. The global driving market. When these are ubiquitous enough, the vast majority of people who currently own cars won't need to. It'll be so much cheaper and easier to use rideshare.
          • ghaff 1y ago
            I can't really imagine the circumstances where I wouldn't want to still own my own vehicle even if it had an autonomous mode. I drive it places where I don't have cellular service. I keep lots of stuff in the vehicle. It's customized with accessories like roofracks. I can hop in my vehicle from my house immediately whenever I want to. If I lived in a city and garaging a car were inconvenient/expensive? Maybe. But that's not me or a lot of other people.
            • crazygringo 1y ago
              It's not going to be for everybody. But if it's half the price over the course of a year? And you can summon it in advance cheaply? And it basically never takes more than 5 min to arrive anyways, since they're everywhere? You might decide it's worth it to keep the stuff you really need in a messenger bag or backpack or something, the way people in NYC do. And maybe roof racks don't matter if you can just summon a second autonomous van behind you to hold whatever you were going to put on your roof. Obviously if you're a contractor or something you'll need your own vehicle. But the point is that for most people, sure they can't keep stuff in their trunk all the time, but that's a happy tradeoff if the total cost of driving is 50% less.
            • lokar 1y ago
              I would switch in an instant and get rid of my car
            • rgmerk 1y ago
              Statistically, and from a global perspective, the apartment-dwelling car owner (most likely with a lower income than yours) is a heck of a lot more common than living in American-style suburbia or a small town.
      • somenameforme 1y ago
        You need to consider profit margins. The cost of showing somebody an ad is very near $0, which is what makes digital products so profitable. But when you do things in the real world, especially in highly competitive markets where the customer is extremely price sensitive, your profit per mile is going to approach $0. For instance WalMart's profit per item sold is less than 3%, and for driving this will likely be substantially lower (given the combination of customer price sensitivity + competition). The way you make up for this is in massive volume, but Waymo for now remains a heavily ringfenced operation and so it's not entirely clear how they reach scale. Google also has a very poor record of long-term performance in competitive markets. The winner in self driving will likely be enabled by extreme vertical integration - you want to be building your own cars, cleaning your own cars, repairing your own cars, and so on.
        • crazygringo 1y ago
          The average American sees something like $500 of ads that go through Google per year. There's a profit margin of around 50% since Google has to pay publishers and pay for running search. So that's $250/person in profit per year. The average American spends something like $12,500 in car+taxi/rideshare per year. Suppose with Waymo that goes down to $7,000 and it's 20% profit. That's $1,400/person in profit per year. Obviously it gets much more complicated -- the profit margin depends on whether there are serious competitors to Waymo and how much Waymo's head start matters. Waymo will bring costs down further with shared vans and buses on demand. Profitability will rise with video ads in vehicles that you pay not to see. And so forth. But autonomous rideshare is going to be larger than search any way you look at it. Profits won't be as high as search, but the barriers to entry are so high that profits will be high for a long time.
          • somenameforme 1y ago
            Those data you referenced are per household, not per person, and the majority of that is loan+insurance. The actual cost in terms of maintenance, fuel, etc is quite low, and that's the price that eventually will be the goal line for autotaxi companies. 20% [net] profit margins do not generally exist in competitive real world industries, outside of perhaps something like real estate. A net profit margin of 5% would be huge, and I think it will likely be much closer to 1%, or even less, simply because in the end it's going to be a commodity where all that matters is price. I also think you're overestimating the impact of things like ads, buses, etc. The second Waymos become less pleasant than any remotely comparably priced option, they will lose customers.
    • 1024core 1y ago
      Imagine if you could buy your own "Waymo-equipped car". No need for driving lessons. No aggravation. No road rage. How many people would pay for such a luxury car? With the US population aging and public transit non-existent in most places, Waymo probably has a market for cars.
      • free652 1y ago
        I am I really hate driving long road trips.. So yes! Or they could even sell private taxi between states so I don't even have to own a car :)
      • deleted 1y ago
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      • hedora 1y ago
        Assuming there are multiple providers of the software, I’d pay expect to pay normal automotive margins on top of the hardware cost. That’s probably $1000-2000 per car, or about a penny a mile. I’m not sure how much a few lidars will cost at scale. The compute board is a few hundred. Modern cars already have plenty of cameras.
      • rgmerk 1y ago
        There’s clearly a demand for self-driving privately owned vehicles as well, but think of it this way - why own a self-driving Chevy when you could hire a self-driving Cadillac when you need to go somewhere?
      • senordevnyc 1y ago
        I would pay $100k today for a basic EV with Waymo tech. Maybe more. It would essentially be like having a 24/7 personal car and driver available.
    • minwcnt5 1y ago
      How much money they've spent in the past is irrelevant. That money all came from investors, in exchange for a stake in the company. It never needs to be "paid back". Besides which, those investors have earned all those funds back already, and then some (on paper). All that matters at this point is how much money they'll lose/earn in the future. There are no shortage of investors willing to put money into this effort, and they're growing exponentially, so there won't be any pressure for them to turn overall profitable for several more years.
      • deleted 1y ago
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      • Zigurd 1y ago
        Boeing may never make back the development costs of the 787. That was an absolutely epic disaster of a project. But that doesn't mean Boeing shouldn't build and sell every 787 they can profitably sell. If Waymo is at breakeven including capex, opex, and overhead, operations logistics becomes the limiting factor. While Alphabet is capable of investing more money into Waymo, I think they've reached the tipping point. If you see Waymo expansion accelerate, bet on that tipping point having been reached.
    • fragmede 1y ago
      Uber took 14 years to make it to profitability. Money's frequently characterized as impatient, unable to look past the next quarter, but when it wants to be, it can wait. Waymo's older than Uber, but they hold many key patents by this point. Now that they've started running a taxi service, it seems straightforwards to scale up, assuming that is the business they want to be in. Then it's just a matter of charging more than it costs to run the service, and wait.
      • andriesm 1y ago
        What makes investors patient when no profits for years, is when they see growth, entrenched commanding lead and network effects, large user base etc. As long as investors can imagine a good likelihood of eventual profitability, then growth in the present is a fantastic substitute for profits. Growth tells you the eventual profits will be bigger. Leadership and moat gives certainty that the company will actually get the profits for the market they grew.
  • mettamage 1y ago
    To all: also think of the productivity boosts. Working in the car or just napping in the car. In the Netherlands this is already sometimes possible if your work is close to a train station while your house is too and you don’t need to switch trains. It’s a boon to be honest. My favorite is the train from Amsterdam to Berlin. Of course, if you carpool then you can do this too. One time I rode in a car as a passenger from Berlin to Prague while working the whole time. When we were there, we went to a DnB festival and we got back on the weekend. Hybrid working is awesome :) And self-driving cars could make it more awesome
• azan_ 1y ago
  I think Waymo has huge potential for being much larger than Uber - people are willing to pay more compared to ordinary uber drive just to avoid dealing with taxi drivers and tech will only get cheaper.
  • Zigurd 1y ago
    Think of Waymo Driver as the equivalent of Android for vehicles. It's an operating system and a suite of cloud services for both autonomy and ride hailing.
    • cryptoegorophy 1y ago
      What about all the expensive hardware, gpus, lidars? That’s like having iOS on your phone and if you want android you need to buy extra things that are worth same price as your phone.
      • Zigurd 1y ago
        It might be like that if a Tesla Robo taxi could actually operate like a Waymo
    • dmix 1y ago
      The long history of "First mover advantage" being a myth implies they are more likely Nokia or Blackberry than Android
  • yieldcrv 1y ago
    Statistically Waymos are more expensive than Uber rides, but practically as an individual they are often cheaper than Uber, its very easy for the stated price to be lower So its not even about willingness to pay more Gig drivers are cooked
    • deleted 1y ago
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    • cryptoegorophy 1y ago
• next_xibalba 1y ago
  Don’t forget that Waymo will always be a much lower margin business than search! Setting aside the decades of R&D expense, those cars require purchasing, maintenance, warehousing, etc.
  • hadlock 1y ago
    Autonomous cars won't sue you, never sleep, don't go on strike, don't sleep 8 hours a day, keep driving when the car needs obvious repairs.
    • edm0nd 1y ago
      >Autonomous cars won't sue you but the companies that own them will or their insurance carriers.
    • next_xibalba 1y ago
      All that may be true. Human drivers are not the point of comparison. The search business is. Waymo will still always be a lower margin business than search for the reasons I enumerated. Waymo may end up being great business. But it is unlikely to exceed what search is/was. For that reason, press X to doubt GP's claim that Alphabet is undervalued. "IT'S PRICED IN" [1] [1] https://www.reddit.com/r/wallstreetbets/comments/eberem/everything_is_priced_in/ https://www.reddit.com/r/wallstreetbets/comments/eberem/ever...
      • hadlock 1y ago
        It's unlikely to exceed what search was, but transit is a much more reliable bet for continued revenue. I don't think anyone is betting on ad revenue being reliable at Google long term anymore.
  • crazygringo 1y ago
    But the market is so, so much bigger. And the margins will likely stay high for a long time while there are few competitors, and their main competition is human drivers. Not having to pay drivers is an enormous source of profit.
• onlyrealcuzzo 1y ago
  Tesla has 1/3rd the market cap. If Waymo is a rounding error to GOOG, it's basically a rounding error to Tesla's implied valuation. So what is Tesla valued in then? Clearly not car sales, profit, and especially growth in either of those segments. xAI is supposed to be where all the AI is. Where is it?
  • hedora 1y ago
    Future gains on political corruption?
  • thorncorona 1y ago
    Faith in the fact that Elon has never lost investors money.
  • christkv 1y ago
    Robotics I think.
    • lobsterthief 1y ago
      Tesla’s robots during that investor event were shown to be controlled by humans wearing mimicking hardware
      • onlyrealcuzzo 1y ago
        Isn't that what Robotaxi is?
        • christkv 1y ago
          I thinking about their humanoid robots and other initatives.
• 1024core 1y ago
  Uber also has to pay drivers. How much of that $50B goes to the operator? Meanwhile, for Waymo, a good chunk of it is profit (after the fixed cost of the vehicle, of course).
  • dmix 1y ago
    The cost of the computers, LIDAR, special maintenance, vandalism, staffing humans for remote issue handling etc will probably costs the same as a year's income for an Uber driver. But after that it's mostly profit and they can run cars longer. The most important thing for Waymo is scaling up production of LIDAR and maintaining them efficiently. They will have a massive fleet running very sophisticated radar+computers. That's a huge logistical investment when it's a million cars. Those sensors will break or be damaged.
    • tracerbulletx 1y ago
      They've been partnering with Uber to maintain the fleet in some cities haven't they since they already have regional infrastructure? I don't think they want to be in the fleet management business.
      • dmix 1y ago
        AFAIK Uber is doing app integrations + some local operational fleet management. Waymo is supplying the cars, radars, computers, remote service, the brand, etc. Waymo has to scale that production and maintenance up country wide and then globally. Uber's CEO compared it to Marriot, people come in to run the hotels in the local region, but they actually don't own the hotels. It's like hired managers who take a cut. It also makes sense to have people with local experience run them in each local region. But those businesses still involve margins and expenses that have to make sense.
• sashank_1509 1y ago
  Uber making 50B, probably means Uber is paying drivers around 200B or higher. So that is Waymo’s potential revenue in the long term as it releases in most ride share markets. I think it’s under 1B revenue now, which just shows how much growth ahead is possible. Even if we think Uber will be at least 50% market share in the coming decade, at least 100X growth is left for Waymo. This also completely ignores Waymo creating latent demand, which is wholly possible. I would for example trust a Waymo to drop my kids everyday over an Uber.