Alphabet‘s self-driving car company Waymo has built the world’s smartest vehicles with access to the world’s best artificial intelligence, but there’s one barrier that it might have underestimated: people.
In the last few months, the company has gained regulatory approvals, improved its driving systems using Alphabet’a AI assets and partnered with other auto manufacturers. Its cars have driven more miles than any other company’s.
But the community closest to Waymo’s main testing grounds in Phoenix, Arizona, said that the human element remains complicated, from hiring more drivers and support staff to working with city officials and emergency response staff.
CNBC visited Phoenix to check out Waymo’s progress earlier this month, weeks after the company launched its first actual business, Waymo One, a commercial robotaxi service in the Phoenix area. Meanwhile, competitors like Uber, Tesla and General Motors subsidiary Cruise are all planning their own self-driving car technology in a market estimated to garner $556.67 billion by 2026.
While analysts have valued Waymo at $70 billion, the Phoenix trip suggested the road to profitability will require humans to get it there.
Community buy-in
Arizona officials said that they have engaged with Waymo routinely for the past several years. So far, the partnership has only worked because of buy-in from cities, which value citizens as first priorities. For Waymo to expand locations, it will have to duplicate those efforts on a larger scale.
Officials of Chandler, Arizona, said the city is revamping some streets and parking lots with self-driving cars in mind. It is also working with police and fire departments — Chandler police chief Sean Duggan said his department worked with the company to identify emergency vehicle siren types so that Waymo could respond.
“There were lots of questions with this technology when we started and there are still lots of questions,” Duggan said. “The dialogue is important,” he added.
Duggan said the company has also had to work out details like who gets a citation, which required an overarching state-wide protocol in order for each jurisdiction to be uniform. The departments are also having to train staff for how to respond to collisions, which Duggan said have more complexities than the typical vehicle.
Speed limits have been a point of contention for other human drivers on the road, officials and local residents told us, noting they drive slower than most other drivers. Local reports claim residents have taken out their anger on the cars in the form of harassing drivers, trying to run the cars off the road, and throwing rocks at them.
“They function like a 15-year-old driver hoping to get a driver’s license and not really like a full-blown driver,” said author and mobility expert Dan Albert.
Duggan said he and the fire chief have been fielding calls from police chiefs across the country with their concerns or curiosities about the technology, particularly after an Uber self-driving car struck and killed a pedestrian in nearby Tempe in March 2018.
Workforce
Waymo is preparing for a contingent workforce it will need to take care of its fleets. In the last two months, it posted dozens of jobs, including a new role, “Head of Contingent Workforce Management.”
It also still needs safety drivers in each car, which Waymo trains.
Phoenix passengers told us that sometimes drivers still needs to engage. Chris Ingle, a Waymo One Rider said while he’s had mostly positive experiences, one time, on the freeway, a police officer pulled over a car but the driver quickly grabbed the wheel because Waymo didn’t detect the unexpected vehicle on the side of the road.
The company also needs maintenance staff for each depot site, where it will do things like wash cars and change oil.
“A lot of the business promise and hope for these is that they eliminate labor and eliminate the need for human beings to drive and be stuck in jobs like delivery pizzas,” said Albert “There’s a human interaction that’s still very much a part of that transportation service and we forget about the complete end-to-end user experience of a lot of these transportation functions.”
Waymo also needs 24/7 operators to address rider support — at one point, we needed to call it in order for the door to open after it presumed the ride was over. Waymo also has a phone number that police officers can call 24/7 if they need to assign a ticket or other citation, officials told us.
More riders
Up to this point, the company has used human interaction and feedback from Waymo One riders to train its rider experience. In Phoenix, it incorporated rider feedback to display trees, pedestrians and bikes on its displays screens inside the vehicle. Despite larger technical advances, it still needs more riders to train them in Phoenix and in other geographies where weather is more severe.
Waymo CEO John Krafcik also said in a recent auto industry podcast that the company needs as many miles as it can get despite having what a spokesperson described as an advanced driving simulator in-house.
The need for more riders was the reason Waymo partnered with Lyft for a fleet of 10 cars in Phoenix, which the company announced last month. It was a way to get the testing in front of a wider array of people who may not already know who Waymo is or what they do, a spokesperson said. She added that the company hopes that fleet beyond the currently limited one.
UBS, which values Waymo anywhere from $45 billion to $135 billion, said Alphabet’s self-driving car unit could generate as much as $114 billion in revenue by 2030 through ride-sharing services that allow customers to book a ride in one of its self-driving cars.
Mindset change
Above all else, Waymo, will have to overcome the common mindset that says cars need drivers.
Arizona governor Doug Ducey said it’s still “scary” for citizens, adding that the company has held town halls in various locations. “There’s mixed feelings about this,” he said. “It will be disruptive in many ways but it will be a creative with new jobs.”
Krafcik, in the past interview, said Waymo becoming ubiquitous is still about a decade out partly because humans aren’t yet able to part with their cars.
And while most people we talked to felt comfortable trusting Waymo as is, others weren’t as confident about a future without a safety driver to engage.
“I don’t want to be in a robotic car,” said one pre-teen rider about a future of driving alone in a car without a safety driver. “I want it to feel like more interactive to the drivers and talk to you the whole time. It doesn’t, like, act human. You just go in there and it’s kind of weird you never know what’s going to happen.”
The Uber fatality didn’t help matters. Following the incident, Waymo continued with business as usual, but the public required more coaxing. Students at nearby Arizona State University protested self-driving cars around its campus.
The Chandler city mayor Kevin Hartke said he had heard complaints and concern as far as the East Coast. “We’ve talked with them and they assured [us] they were doing it right,” he said about addressing Waymo after the incident.
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