Weekly Brief: Robo-Taxi Revolution Could be on Near Horizon

Commentary By Andrew Tolve

---

1st March 2021

Fully autonomous vehicles arrived in Las Vegas last week.

The AVs belong to self-driving startup Motional, which is a joint $4Bn venture shared by Hyundai and Aptiv. While the start-up is only a year old, Aptiv has been operating AVs on public roads in Las Vegas in partnership with Lyft since the 2018 Consumer Electronics Show. Motional hired an independent third-party evaluator, Germany’s TÜV SÜD, to prove to the State of Nevada that it was ready to remove safety drivers from behind the wheel.

Motional plans to have a fleet of Level 4 robo-taxis in service in partnership with Lyft by 2023. For now, safety engineers are riding in the passenger seat and no other passengers are on-board. Aptiv will continue to partner with Lyft in Las Vegas but all of its vehicles will have safety drivers behind the wheel for the time being. This announcement is a reminder that momentum continues to build behind robo-taxis. At the start of 2021, Waymo integrated fully autonomous vans into its Waymo One service in the suburbs of Phoenix, Arizona. These vans have been operating for two months now with no safety engineers onboard, only paying passengers. Feedback has been positive. There have been no incidents or accidents or cases of contracted COVID-19. Owing to the pandemic, Waymo sterilizes its AVs throughout the day. It harnesses the car’s HVAC system to automatically flush out the cabin air after each ride. It also asks passengers to use hand wipes and hand sanitizer upon entry.

Waymo is now looking to build on this success. Two weeks ago the company started testing its driverless operations in San Francisco, California. Members of the public can’t participate yet. So far, it’s only Waymo employees who can provide feedback on how the cars handle San Francisco’s hilly terrain but that could change soon if the pilot program is successful. The state of California recently changed its laws so that ride-hailing companies can legally transport passengers in fully driverless AVs.

That’s good news for Waymo and General Motors’ Cruise, which became the first operator to deploy Level 4 AVs in San Francisco back in December 2020. GM Cruise hasn’t invited passengers on-board yet, nor has it revealed when it plans to do so, yet 2023 seems a realistic target date. The same is true for Didi Chuxing and AutoX, which have launched robo-taxi pilot programs in Shanghai, and for Baidu and Pony.ai, which have launched pilot programs in Beijing and California.

All of these initiatives speak to growing levels of comfort on the part of regulators and state and city governments to greenlight fully driverless cars. When or if that will translate into mainstream robo-taxi adoption is anyone’s guess but I would look to 2025 as the year that robo-taxis gain broad traction. Waymo will continue to lead the way. Uber sold off its self-driving division to Aurora under duress during the pandemic but it still owns a significant stake in Aurora. Don’t be surprised if it starts to take a more aggressive posture toward AV deployment as it emerges from the pandemic. Lyft has 2023 targeted on the calendar with Motional. GM Cruise is on track to deploy around then as well.

The real wild card here is the Biden administration. Pete Buttigieg, Biden’s Secretary of Transportation, is young and fluent in the ways of the mobile revolution. A couple weeks ago he set Twitter on fire when he rode to work in Washington, D.C., using a bikeshare. Buttigieg understands the need for AV regulations at the federal level and President Biden has shown a willingness to embrace them. If they deliver in a way that’s advantageous for AV companies, the floodgates could open.