Latest / Elon Musk Podcast / Waymo's Lead Is About to Get Tested by Tesla, Zoox, and Uber

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Waymo's Lead Is About to Get Tested by Tesla, Zoox, and Uber · Elon Musk Podcast

• 0:00
  San Francisco is about to become the only city on earth where
• 0:02
  riders can hail robo taxis from 4 different companies.
• 0:06
  Waymo's white domed vehicles grew from a novelty to an
• 0:09
  inescapable part of daily life in 2025, with a fleet of 1000
• 0:13
  cars completing millions of rides each month and becoming a
• 0:16
  must do experience for tourists visiting the city.
• 0:20
  Tesla, Zooks and Uber all plan to launch competing services in
• 0:23
  2026, and each one brings a radically different approach to
• 0:27
  autonomous technology, pricing and scale.
• 0:30
  I'm going to breakdown exactly where each company stands, what
• 0:32
  technology they're betting on, and what the arrival of three
• 0:35
  new operators means for fares and traffic in a city already
• 0:38
  notorious for congestion. But can any of them actually
• 0:41
  catch Waymo? Or will the Alphabet subsidy
• 0:45
  cement its lead while competitors stumble through a
• 0:49
  steep learning curve? Now the California DMV just
• 0:52
  found Tesla violated state law by marketing its technology as
• 0:56
  Autopilot and Full Self Driving capability when neither term
• 1:00
  accurately describes what the cars can do.
• 1:02
  And the company could face a 30 day suspension of its dealer
• 1:05
  license because of it. We'll cover Waymo's aggressive
• 1:08
  expansion plans across 20 cities worldwide, including Tokyo and
• 1:11
  London, Tesla's legal troubles and the flip the Switch moment.
• 1:14
  Investors waiting for Zoox's plan to launch paid rise in the
• 1:18
  second-half of the year with its distinctive pod shaped vehicle
• 1:22
  and Uber's unusual bet on $100,000 luxury vehicles through
• 1:27
  partnerships with Lucid Motors and Neuro.
• 1:29
  And we'll get right into that right after this very short
• 1:32
  break. Now.
• 1:34
  San Francisco transformed its Waymo City over the past year,
• 1:38
  and now 3 competitors want a piece of that market.
• 1:42
  Scott Devitt, managing director of equity research at Wedbush
• 1:46
  Securities, described 2025 as the calm before the storm.
• 1:50
  The robotaxi industry is entering a new phase where years
• 1:53
  of research and billions in investment finally translate
• 1:56
  into Commercial Services competing for the same riders on
• 2:00
  the same streets. Waymo holds a commanding
• 2:03
  position heading into this fight.
• 2:05
  The company announced its Bay Area Service zone is expanding
• 2:08
  to more than 260 more miles that will include freeways for the
• 2:13
  first time, a significant upgrade that allows vehicles to
• 2:16
  take faster routes between cities.
• 2:18
  San Jose Menita Airport became the first major California
• 2:22
  airport to offer 24/7 Waymo pickup, giving the service a
• 2:26
  foothold in business travel. Now, the DMV approved an even
• 2:30
  larger N California zone that stretches into the East Bay,
• 2:33
  North Bay, Sakto, Sacramento, though Waymo still needs a
• 2:38
  permit from the California Public Utilities Commission
• 2:41
  before launching commercial rides in those areas.
• 2:44
  And the global ambitions tell you how confident Alphabet is in
• 2:48
  this tech. Waymo announced plans to expand
• 2:51
  into more than 20 cities worldwide next year, including
• 2:54
  Tokyo and London, markets that would establish the company as a
• 2:58
  truly international robotaxi operator rather than just an
• 3:02
  American experiment. Harry Campbell, who writes the
• 3:05
  Driverless Digest newsletter covering autonomous vehicles,
• 3:08
  put it bluntly when he that he doesn't count the competitors in
• 3:12
  the same league as Waymo called Waymo the only true robotaxi in
• 3:16
  town right now, though he acknowledged that could change
• 3:19
  in the next year as two competitors mature their
• 3:23
  offerings. Now Tesla presents the biggest
• 3:25
  potential threat to Waymo's dominance, but the company faces
• 3:28
  serious obstacles that could delay its progress for years.
• 3:33
  Tesla uses cameras exclusively for its Self driving system, a
• 3:38
  cheaper approach than Waymo's expensive Lidar sensors that
• 3:41
  provide depth perception and help vehicles understand their
• 3:44
  surroundings in three dimensions.
• 3:46
  Tesla launched its Bay Area service this past summer with a
• 3:49
  zone larger than Waymo's spanning Marin, much of the East
• 3:53
  Bay and SF down to San Jose. The catch is that Tesla's
• 3:57
  vehicles still operate with safety drivers behind the wheel,
• 4:00
  and wait times can stretch to 30 minutes when a car is available
• 4:03
  at all, a far cry from Waymo's typical pickup times, which are
• 4:07
  just a few minutes now. The camera only strategy creates
• 4:10
  both opportunity and risk for Tesla.
• 4:12
  Now we're waiting for what is going to be the flip the switch
• 4:16
  moment when the company convinces regulators that his
• 4:19
  vision based system is safer than Waymo and is safe enough to
• 4:23
  operate without humans inside. And if Tesla reaches that
• 4:26
  milestone, it could recruit millions of customer owned cars
• 4:29
  into a robot taxi fleet that could dwarf Waymo's 2500 cars
• 4:34
  nationwide. Now this would put Tesla in pole
• 4:38
  position for the entire industry, way ahead of everybody
• 4:41
  else. The economics become compelling
• 4:43
  when you consider that Tesla wouldn't need to buy and
• 4:46
  maintain its own fleet because customers would supply their own
• 4:51
  cars. Now remember, this was the
• 4:52
  promise that Elon Musk made to Tesla owners in the past, that
• 4:57
  if your car was sitting in a parking lot all day long, you're
• 5:00
  at work 8910 hours and you don't need your car because you're at
• 5:04
  work. So you set your car free.
• 5:08
  You let it do work for you. You make money with your car for
• 5:11
  free, and when that happens, your income goes through the
• 5:17
  roof. Right now, Tesla's legal
• 5:19
  situation complicates the timeline considerably and raises
• 5:23
  questions about whether regulators will trust the
• 5:25
  company's safety claims. Florida jury this year ordered
• 5:28
  Tesla to pay more than $240 million to victims of a fatal
• 5:32
  2019 crash involving its Autopilot system, which relies
• 5:36
  on cameras to assist with steering, acceleration and
• 5:39
  braking on highways. The California DMV found Tesla
• 5:42
  violated state law by using misleading marketing terms and
• 5:45
  warned the company could face a 30 day suspension of its dealer
• 5:48
  license if it doesn't correct the claims now.
• 5:52
  Insurance and liability questions also remain unsolved.
• 5:56
  There's no clear answer on who bears responsibility when a
• 5:59
  driver this car a Tesla crashes, or whether individual owners
• 6:03
  would face new legal exposure by letting their cars operate as
• 6:07
  taxis. Who pays for something if a
• 6:12
  regular person uses their Model 3 as a taxi?
• 6:16
  Is their insurance covering everything?
• 6:19
  Do they have to buy separate insurance?
• 6:20
  Do they have to buy specific insurance from Tesla?
• 6:24
  That's still all up in the air. And you know what else is up in
• 6:27
  the air? Are analytics.
• 6:28
  Analytics of the show. Show that 37% of you have been
• 6:32
  following the channel. And for you, I'm forever
• 6:34
  grateful. Now, the other 63% of you who
• 6:37
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• 6:40
  haven't quite followed or subscribed yet, or maybe it's
• 6:42
  your first time here and you're actually enjoying this.
• 6:44
  It's great. And let me break it down for
• 6:47
  you. I've been an independent
• 6:48
  journalist covering tech, SpaceX, Elon Musk, all things
• 6:53
  Tesla, Space Flight for the last six or seven years.
• 6:57
  And I'm going to continue for the next 10, but I need your
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  help. So for my next 10 years, I'm
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  going to ask you for one second of your life, one second of your
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  time and hit the follow or subscribe button on whatever
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  That's it, That's all I ask. It's so helpful.
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  of Apple podcasts in tech. So if you could please leave a
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  five star review for the show. Thank you so much.
• 7:48
  I'm extremely grateful and blessed to have you in this
• 7:50
  community. Now, Zoox, let's talk about this
• 7:54
  to bring a different philosophy to the competition with a
• 7:57
  vehicle designed from the ground up for autonomous operation.
• 8:01
  It's an Amazon owned company and they built an aloe green pod
• 8:06
  that looks like a toaster on wheels rather than just a
• 8:09
  regular car like Waymo does with Jaguar I Pace vehicles.
• 8:13
  Zoox currently operates around 50 robo taxis in San Francisco
• 8:17
  and Las Vegas, offering free rides of people from its wait
• 8:21
  list in parts of SOMA, the Mission and the Design District
• 8:25
  CTO Jesse Levinson said at the Future AI Brainstorm conference
• 8:29
  that Zoox plans to launch a paid service in SF in the latter half
• 8:33
  of 2026. And the purpose built design
• 8:37
  gives Zoox practical advantage. A bigger battery that doesn't
• 8:41
  require multiple charges throughout the day, meaning more
• 8:44
  time on the road collecting fares instead of sitting at
• 8:47
  charging stations. Campbell raised a fair question
• 8:51
  about Zoox's path to commercial scale.
• 8:53
  Already have the Uber app, the Lyft app, the Wymo app and the
• 8:55
  Tesla app on their phones. All the apps now, He said he was
• 9:00
  asking whether people will download a fifth app for Zoox
• 9:03
  unless the product overwhelming stands out from what's already
• 9:06
  available. This is carriage style vehicle.
• 9:09
  It offers unique amenities like wireless phone chargers and
• 9:12
  personal screens that let each passenger adjust the temperature
• 9:15
  in their quadrant, features that could differentiate the service.
• 9:19
  It's a little higher level. And Levinson expressed
• 9:22
  confidence that the market could support his company's approach,
• 9:24
  saying Zooks believes it'll create a multi $100 billion
• 9:29
  business. Just moving people from point A
• 9:31
  to point B. And Uber enters the San
• 9:34
  Francisco market through partnerships rather than
• 9:36
  building its own tech after learning a hard lesson.
• 9:40
  The company shut down its internal autonomous vehicle
• 9:42
  program in 2018 after a fatal accident in Arizona killed a
• 9:45
  pedestrian exposed serious safety failures in Uber's
• 9:48
  approach. The new strategy pairs luxury
• 9:51
  electric vehicle maker Lucid Motors with autonomous software
• 9:55
  company Neuro, which is found in 2016 by two former Waymo
• 9:58
  employees, to create an Uber exclusive robotaxi.
• 10:02
  Launching in 2026, Uber plans to start with around 100 Lucid
• 10:08
  Gravity vehicles, each carrying a price tag of about $100,000.
• 10:12
  That premium positioning runs counter to an industry
• 10:15
  increasingly focusing on cheaper vehicles and scale targeting
• 10:19
  high end riders rather than competing on price with Waymo or
• 10:23
  Tesla. So if you want to go from the
• 10:26
  airport to your hotel with a little bit of luxury, little bit
• 10:30
  more class, more relaxing, higher end, this is what you're
• 10:33
  going to be looking for. And Zoox is kind of like the fun
• 10:37
  little shuttle bus. And Tesla is your tech bro or
• 10:43
  your, you know, your friend's vehicle that you jump into.
• 10:47
  Same with Waymo. It's like a nice ride, you know,
• 10:49
  And Waymo vehicles are a little bit more high end too.
• 10:51
  So it's kind of a mix between a Tesla and the Lucid Air.
• 10:55
  And you're going to get a really good ride there.
• 10:57
  Riders that are hoping for four different robotaxi operators
• 11:01
  that it'll drive down the fares. But I don't think that's going
• 11:05
  to happen. Developing autonomous tech
• 11:07
  requires enormous capital, and all these companies will want to
• 11:11
  recover the costs rather than engage in destructive price
• 11:14
  wars. So investors have substantial
• 11:19
  stakes in these companies and expect them to break even as
• 11:22
  quickly as possible. They want their money back.
• 11:25
  And if you invest in something, you want a return on your money,
• 11:28
  right? So you want them to make as much
• 11:29
  money as possible as fast as possible so you can get your
• 11:31
  money and then some. And the period of subsidized
• 11:35
  rides that often accompanies new technology may be shorter than
• 11:40
  riders hope. So these low fares, they're
• 11:43
  going to go up as soon. Same with everything else.
• 11:46
  They entice you in with a small fare.
• 11:48
  Think of it like Netflix. How much was Netflix when it
• 11:51
  started? How much is it now?
• 11:53
  Same with Disney, Disney Plus, etcetera.
• 11:56
  Prices go up because they know there's you're already locked
• 12:00
  in. That's what's going to happen.
• 12:02
  You're going to get used to a type of a ride from say a Tesla
• 12:07
  and you're going to use it that price range and then little by
• 12:11
  little they'll incrementally Jack that price up.
• 12:15
  It goes from 420, we've already seen it happen from the 420
• 12:19
  introductory price to $6.90 maybe, and from there I go to $9
• 12:27
  for a fare. From there it's per mile per
• 12:31
  like for time, whatever. So overtime, they're going to
• 12:34
  keep charging more and they can because they're going to be the
• 12:36
  only players in this game now. David Zipper at the MIT Mobility
• 12:41
  Iterative offered a more cautionary view about this
• 12:45
  competition and what it means for San Francisco.
• 12:48
  Zipper said he would be nervous if he lived in San Francisco,
• 12:51
  pointing out that new entrance will face a steep learning curve
• 12:54
  operating on real streets with unpredictable conditions.
• 12:59
  He expects them to make mistakes, block traffic and
• 13:02
  interfere with public transit. As they figure things out on
• 13:04
  public roads, we've already seen them stop.
• 13:06
  Buses stop, trains park sideways in the middle of the road
• 13:11
  because they didn't know which way to go.
• 13:13
  Robotaxis aren't perfect and they're still learning.
• 13:16
  And every Rd. is different and there's sometimes new
• 13:19
  construction or just random people walking across and it
• 13:22
  confuses the computers. So you know, the learning
• 13:25
  process happens with Waymo, but now there's three more companies
• 13:29
  that will go through A simultaneously in the city.
• 13:31
  So expect some pretty weird things to happen.
• 13:35
  And SF will serve as the proving ground for the robotaxi industry
• 13:38
  in 2026. This is the moment that we've
• 13:41
  all been waiting for, for robotaxis, and their residents
• 13:44
  and commuters will be bearing the consequences of that
• 13:47
  experiment. Waymo holds a clear lead with
• 13:51
  1000 plus vehicles, freeway capabilities and plans to expand
• 13:56
  into 20 cities worldwide. Tesla needs regulatory approval
• 14:00
  to remove safety drivers and they must resolve mounting legal
• 14:04
  challenges before it can deploy its camera based system at
• 14:07
  scale. Zoox plans to cover its free
• 14:10
  rides into a paid service with around 50 vehicles and purpose
• 14:13
  built pods. Uber is betting on luxury
• 14:16
  partnerships rather than building its own fleet or
• 14:19
  technology, and traffic and disruptions will likely increase
• 14:24
  as three new operators learn the city streets alongside millions
• 14:28
  of human drivers.