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Alphabet’s Waymo Leaves Austin, Enters New Markets


Nov. 11 2019, Updated 10:30 a.m. ET

Waymo, the Alphabet (GOOGL) subsidiary focused on self-driving cars, wants to merge its teams in Detroit and Phoenix. Waymo will relocate its current team in Austin to either of these cities, CNBC reports. Alphabet’s Waymo believes putting teams in Detroit and Phoenix will better support its customers and manage its vehicle fleet.

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Alphabet’s Waymo moves to Robo-Taxis

Waymo’s plans to shut its Austin operations and merge its teams in Detroit and Phoenix. This move comes as it begins to offer a fully autonomous ride-hailing service. Last December, Alphabet’s Waymo joined Uber Technologies (UBER) and Lyft (LYFT) in the ride-hailing market with a service called Waymo One. Although Waymo One uses self-driving cars to transport customers, each of the cars has a human safety driver. However, keeping human drivers in the cars means that Waymo is taking on more costs.

Waymo started removing safety drivers from its self-driving taxis. Thus, they plan to take the cost-cutting path. As it moves to completely driverless cars for its ride-hailing service, Alphabet’s Waymo will keep a rider support team. Initially, Waymo’s ride-hailing service was launched in Phoenix. The Austin team relocating to Detroit and Phoenix provided rider support as well as fleet assistance, according to CNBC.

The global ride-hailing market will grow to $280 billion by 2030. This is from only $36 billion in 2017.

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Waymo looks beyond the ride-hailing market

The ride-hailing market is only Waymo’s first stop. Also, the company is looking to grow beyond this market. Another market that looks interesting for Alphabet’s Waymo is freight trucking. The global freight trucking market will grow to $6.3 trillion by 2025. This is from $3.8 trillion in 2016, doubling in size. Recently, Waymo CEO John Krafcik reiterated that Waymo wants to enter the freight trucking market. This will help grow its monetization opportunities.

Along with freight trucking, Alphabet’s Waymo will license its self-driving technology to other companies. Although a lot of companies are working to build driverless cars, many have run into challenges. Therefore, there may be companies interested in licensing Waymo’s advanced technology. This will help jumpstart their self-driving projects. Plus, Uber has signaled it may license Waymo’s self-driving technology.

Waymo expands with AutoNation

Alphabet’s Waymo secured another business with AutoNation (AN). Last year, Waymo won a contract to provide a transport service for AutoNation customers as they have their personal car serviced. In addition to transporting its customers, AutoNation handed Waymo another contract. Under the latest contract, Waymo will help move parts between AutoNation’s service centers in areas where it operates the autonomous fleet.


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