Get Ready for Robotaxis

In his book, "The Fixer: My Adventures Saving Startups from Death by Politics," Bradley Tusk details his successful campaign in support of Uber's launch of ride hailing services across the U.S. and, ultimately, the world. The Tusk playbook typically involved leveraging cynical power-to-the-people campaigns that simultaneously painted taxi operators as racist, regulators as corrupt, and politicians as corrupt, incompetent, and anti-innovation.

It sounds simple, but was anything but. It did help that politicians were typically obsessively self-interested, insecure, and compromisable. It didn't help that Tusk's original client - Travis Kalanick - was certifiably evil and eventually implicated in multiple episodes of deception of drivers, consumers, regulators, and investors.

Still, Tusk's and Uber's success speak for themselves. But like a transportation dialectic, the unintended or unanticipated consequences continue to play out around the world. Transportation startups offering drones, delivery bots, e-bikes, e-scooters, robotaxis, and all manner of autonomous vehicles have resorted to the same tactics to successfully promote their products and services.

Tusk proved the value of lobbyists and lobbying. The fulcrum for his activities has been elected officials who are fundamentally vulnerable.

In Washington, D.C., where Tusk refined his tactics on Uber's behalf the message that ultimately prevailed and which was taken to heart by local politicians and even regulators was to avoid being anti-innovation. No politician or regulator wanted to be perceived as standing in the path of new, potentially job-creating technology.

These same sentiments appear to be prevailing in Friday's decision by the California Public Utilities Commission to allow Waymo to operate a commercial robotaxi service in Los Angeles, the San Francisco Peninsula, and on San Francisco freeways. The decision opens up critical and lucrative airport trips to being fulfilled by robotaxis running from the city to SFO putting additional pressure on already stressed taxis and adding a frisson of competition to ride hailers Uber and Lyft.

The announcement follows by a few weeks a similar regulatory blessing offered to four Chinese robotaxi operators in Beijing running customers to Beijing Daxing International Airport. The implications of the two decisions are many.

Opening up robotaxi services to SFO for Waymo reflects Waymo's demonstrated ability to operate safely on highways at speed and in traffic. Waymo has demonstrated its ability to merge, change lanes, and accelerate safely.

Making the decision easier for CPUC may be the fact that Waymo operates converted mass produced vehicles from Jaguar that include steering wheels and brake pedals along with all of the other equipment necessary to meet Federal Motor Vehicle Safety Standards. While Cruise, which is also preparing to restore its robotaxi operations in multiple U.S. cities, uses converted Chevrolet Bolts, the company is seeking waivers to introduce its Origin purpose-built robotaxi which is not FMVSS compliant.

It remains to be seen whether or when Cruise will be able to return to operation and with which vehicles. Waymo's success points to a competitive advantage deriving from the use of existing vehicles for robotaxi operation.

The other question is whether CPUC or any other regulator might limit the number of Waymos operating in San Francisco, Los Angeles, or any other city. There are 1,000 taxis operating in San Francisco today and an estimated 5,000+ ride hailing vehicles.

Waymo operates approximately 100 robotaxis in San Francisco, as did Cruise before it paused operations. In 2022, Cruise announced its intention to boost its San Francisco fleet to 5,000 vehicles - which touched off resistance from local authorities.

CPUC's approval does raise the question, though, as to how many Waymos (or any other robotaxis) is enough and how much is too much? Will CPUC take responsibility for any resulting traffic congestion or increase in incidents?

What is the guiding principal of a robotaxi deployment? Is there a guiding principal? Is there a purpose?

The Tusk principal in this instance is that all innovation is good by definition. In this context it is difficult to object to new forms or transportation technology or to set limits or rein them in.

Thus far, only New York City has successfully limited the number of Ubers and Lyfts able to operate and has also set minimum compensation requirements. Ride hail operators throughout the rest of the country have few restraints other than the limits of driver and passenger recruitment.

Without specific objectives in mind, CPUC has simply opened the robotaxi tap to let the market determine the outcome. Cruise has demonstrated that there are limits to this regulatory complacency - in the form of resulting pedestrian injuries or fatalities. At least the state established data reporting requirements for autonomous vehicles which, even so, were fairly limited and also failed to define a purpose for robotaxis.

We are left with the proposition that we are accepting the introduction of robotaxis because they have demonstrated some minimum acceptable level of competent operation. How robotaxi operations might impact taxis, ride hailing services, bus/tram/subway operations, remains unclear and apparently irrelevant.

Under these circumstances there are few barriers to the introduction of robotaxis throughout the U.S. with airport trips as a focal point. In an interview conducted at StrictlyVC LA, reported on by TechCrunch, Waymo co-CEO Tekedra Mawakana described the positive response of L.A. Waymo users to its free service - using it for running errands, to go to restaurants and bars, or to go to school. She noted that the usage profile might change with commercial service.

TechCrunch: https://techcrunch.com/2024/03/01/waymo-can-now-charge-for-robotaxi-rides-in-la-and-on-san-francisco-freeways/

Los Angeles transportation executives have long-asserted their interest in leveraging robotaxi services to assist physically or financially disadvantaged populations. Those concerns have clearly not been prioritized by CPUC.

Like it or not, robotaxis are on the way. There is little or nothing standing in the way of their operation, especially in an innovation at all costs political environment.

Waymo does appear to be the more palatable operational partner vis-a-vis Cruise, with its multi-billion-dollar investment hoard and $400M+/month cash burn. Waymo is no less motivated to reward investors, but Cruise's announced plans for thousands of cars and billions in revenue within a few years were off-putting to say the least and appeared to shove safety into the back seat.

Competitors from Zoox, Pony.ai, and Motional to China's WeRide, Baidu, AutoX and others will be watching Waymo's progress to weigh their own prospects for success in California and everywhere else in the U.S. Waymo is the clear winner. It remains to be seen whether or who will lose.