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Yandex Pursuing Waymo with Driverless Taxi Service

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Service launches in Russian Innopolis tech hub

Yandex (YNDX) recently launched a taxi service that uses self-driving vehicles to transport people around the Russian city of Innopolis. The service is Europe’s first driverless taxi service. The new service is layered over Yandex’s regular app-based taxi service offered under the Yandex.Taxi brand.

Alphabet’s (GOOGL) Waymo subsidiary is also working on a driverless taxi program that’s expected to launch in the United States later this year, with the first launch occurring in Phoenix, Arizona. Waymo is already conducting driverless taxi tests in Phoenix, where its fleet of Chrysler Pacifica minivans have been transporting passengers around the city to shopping locations and public transit.

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User feedback to inform Yandex’s next step

Waymo is eyeing Europe’s taxi market as well. However, the company may partner with a European auto company to enter that market. Waymo expects to operate its driverless taxi service under a different name to improve its market visibility.

Yandex has initially deployed two vehicles for its driverless taxi service. The company noted that it would study user feedback to decide the next step in this program. The company may expand its driverless taxi fleet, removing the safety driver and adding more destinations.

Diversifying the business

Uber, Baidu (BIDU), Alibaba (BABA), and Tencent (TCEHY) are among the technology companies that are developing driverless vehicles. Baidu has already produced more than 100 self-driving shuttle buses for deployment in China this year and plans to launch in Japan next year.

For the majority of these tech companies, building driverless vehicles is one of the ways they seek to diversify into new revenue areas. Baidu currently relies on advertising dollars for the majority of its revenues. Tencent is also funded by ads, and in the spirit of diversification has built payment capabilities into its WeChat social app.

Alibaba generates the majority of its revenues from offering e-commerce services. Yandex, also heavily funded by ads, generated $472.8 million in revenues in the second quarter.

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