Alphabet’s Waymo Now in Serious Business

Waymo officially entered ride-hailing market

Alphabet (GOOGL) is scheduled to report its results for the fourth quarter of 2018 on February 4, marking its first quarterly report since its Waymo subsidiary began offering commercial ride-hailing service in self-driving vehicles.

Waymo is the Alphabet subsidiary focused on self-driving. In December, Waymo launched its ride-hailing service in parts of Phoenix, Arizona, moving to challenge Uber and Lyft for revenue in a rapidly expanding market that Goldman Sachs estimates will be worth $285 billion by 2030. Waymo’s move saw it jump ahead of General Motors (GM) and Ford Motor (F), which are also working on entering ride-hailing with self-driving vehicles. Yandex (YNDX) also last year began testing its ride-hailing service in self-driving vehicles in parts of Russia.

Alphabet’s Waymo Now in Serious Business

Sponsored rides and package delivery

In addition to regular ride-hailing where passengers pay for themselves, Waymo is also eyeing sponsored rides and package delivery markets. Sponsored rides involve companies paying for rides for their workers or customers in Waymo vehicles. Walmart (WMT), which employs more than 1.5 million people in the United States and serves about 265 million customers every week, is one of the companies that have shown interest in Waymo’s sponsored rides program.

Recruiting business clients

Google’s relationship with retailers such as Walmart and Target (TGT), which use its online selling tools, puts Waymo in a great position when it comes to recruiting business clients for its sponsored rides and package delivery programs to expand its revenue opportunity. Google and Waymo are siblings under the Alphabet corporate family.