There’s a general sentiment in the robotaxi world that Waymo, Google parent Alphabet’s driverless ride-hailing service, is somehow the “good guy” of all robotaxis out there.
Waymo uses a more comprehensive suite of sensors such as cameras, radar and Lidar. It doesn’t have the cultural and political baggage of Tesla. But that doesn’t automatically make it flawless at the core task, which is ferrying passengers in autonomous EVs safely.
Welcome to the Friday edition of Critical Materials, your daily round-up of news and events shaping the world of electric cars, autonomous vehicles and technology.
Also on my dance card today: The worst fears about robotaxi might slowly be taking shape. In cities where services such as Waymo’s are currently operational, the wages for human drivers have started going down. Plus, one Chinese EV behemoth had a bruising second quarter this year, with the price war cutting deeply into its profits.
30%: Waymo And Tesla Face Tough Robotaxi Rollout
Tesla’s self-driving ambitions date back more than a decade. They only came to life this year with a pilot program in Austin, limited to a handful of loyal Tesla fans who can summon a Model Y robotaxi, safety driver still included.
But Tesla desperately needs this gamble to pay off. Its core passenger vehicle business is in freefall. Global deliveries dropped 13% in the second quarter, while revenue fell 12%. In Europe, Elon Musk’s politics have damaged the brand. Sales were down more than 40% between January and July.
Its approach to scaling robotaxis is different from Waymo’s. Model Ys equipped with cameras and artificial intelligence promise to deliver a more generalized solution to autonomy, which Musk claims can help the brand scale faster. He told investors in July that Tesla Robotaxis would be available to “half the U.S. population” by the end of this year. Austin’s population is about 0.3% of the U.S. population, and the robotaxi service isn’t even available to everyone in the city, only to carefully selected Tesla fans.
Musk said on his social media platform X early this month that the service will transition to “open access” in September, meaning the broader public should be able to download the Robotaxi app and order a ride. (If you’re familiar with this world, next month can easily translate to next year.)
Waymo’s approach is more methodical and cautious, but it hasn’t exactly been smooth sailing either. The company has a more cautious approach to scaling. It uses a more comprehensive sensor suite to scan its surroundings and then make active driving decisions based on what it “sees.”
Its fleet of roughly 2,000 Jaguar I-Pace Robotaxis has been operational in the Bay Area, Los Angeles and Phoenix. In Austin and Atlanta, it’s available through the Uber app. As Reuters reported Friday, this clinical approach hasn’t exactly resulted in a flawless outcome either.
Here’s what the outlet said:
In Austin, where it started offering autonomous rides through the Uber app in March, authorities have often seen Waymo vehicles ignore officers’ hand signals and drive into dangerous situations, said Austin Police Lieutenant William White.
In May, a Waymo vehicle drove into flood waters and the passenger had to find a way out. “Obviously that’s a huge concern to us,” said White. “If that person had died, we could have been looking at a serious criminal incident.”
Last year, during a charity walk near downtown Austin, a Waymo vehicle tried repeatedly to go around an officer who was clearly blocking a roadway. Police eventually disabled the vehicle by wrapping tape around one of its sensors, White said.
Those are not the only recent Waymo incidents. A quick Google search will show you many more. Waymos have driven over sinkholes at full speed, crashed into each other, honked at each other, waking entire neighborhoods up, among dozens of other incidents.
And Waymo hasn’t even started its service in America’s most chaotic New York City streets yet, although testing is now underway. With Alphabet’s war chest, Waymo can continue to expand and improve despite losing billions of dollars annually—though analysts think it will eventually become profitable.
Tesla doesn’t have that luxury. The stakes are much higher for Musk. Unless it pivots back to making sensible EVs, robotaxis will be the make-or-break test for the brand.
60%: Robotaxis Affect Driver Wages In These Cities
Business strategy and technical challenges aren’t the only obstacles for Waymo and Tesla. A new report shows robotaxis are already having a tangible impact on human cab drivers in some of America’s biggest cities.
There’s no easy way to put it: Robotaxis are straight up eating into the income of human drivers.
With Waymo now providing more than 250,000 weekly driverless rides across five U.S. cities, hourly wages for human drivers have started to fall, according to the rideshare and delivery data platform Gridwise.
Using anonymized, aggregated earnings data, Gridwise compared wages in cities where robotaxis operate against the national baseline. Nationally, drivers’ hourly pay rose 1% year-over-year in July. But in Austin, gross hourly pay dropped 5.3%. In Phoenix, Los Angeles, and San Francisco, it fell 3.8%, 4.7%, and 6.9%, respectively. Ouch.
Gridwise said drivers in these markets are seeing fewer trips during peak-demand hours and reduced incentive offers, the very bonuses that typically help boost their weekly income.
We’ve seen some of this play out in real-time, too. Uber riders in Austin for example, are canceling human trips until they match with one of Waymo’s robotaxis.
90%: BYD’s Profits Plunged In The Second Quarter
Even the world’s biggest EV maker in the world’s biggest car market isn’t insulted from some of the EV-specific challenges. After a rapid ascent over the years, BYD’s profits dropped 30% in the second quarter, its first dip since 2022.
The company raked in about $894 million in that period, Nikkei reported on Friday, citing the company’s filing with the Hong Kong Exchange. With more than 100 brands trying to grab a share of the EV market in China, competition has been fierce.
In May, BYD offered discounts as high as 34%, stifling the whole market. It even prompted the Chinese government to step in, with high-ranking government officials urging auto companies to stop their predatory pricing and unhealthy competition.
100%: Would You Ride With Humans Or Robots?
Like it or not, driverless ride-hailing is coming to a city near you, if it hasn’t arrived already.
There’s a fair case for safety when it comes to late-night robotaxi rides after leaving a bar or club. But on several press trips this year, my airport rides with human drivers have come with something driverless cars can’t replicate: friendly conversations, restaurant suggestions and local recommendations.
I’m not a woman or a teenager, but I know too well the harrowing encounters many have had with human drivers. Then again, robotaxis aren’t automatically safer. In California, they’ve been vandalized, blocked and even set on fire amid protests.
So as the industry races ahead, here's some food for thought. Can human drivers and robotaxis find a mutually beneficial and meaningful way to co-exist? And who would you actually trust to get yourself or your family to ride with? Leave your thoughts in the comments.
Have a tip? Contact the author: Suvrat.kothari@insideevs.com
