Waymo May Have Just Proven The Robotaxi Industry Isn’t The Gold Mine We Thought It Was
In fact, they may have just proven it can never be wildly profitable.
Waymo is the undisputed leader of the robotaxi industry. No one offers as many rides in as many cities as they do. What’s more, they cost about the same as an equivalent Uber. In fact, this August, the company announced it had reached an average of 100,000 paid rides a week! That is double the rides it was giving per week in May 2024. As such, Waymo is quickly becoming the dominant player in this industry. Yet, despite that, it has yet to reach profitability, and many doubt it can ever reach profitability. This, in turn, casts a vast shadow over the massive valuation of other robotaxi companies like Tesla. So, is the robotaxi industry a non-starter?
Well, firstly, let’s get a clear picture of Waymo’s financial situation. As it is pioneering new technology, its R&D costs are enormous, but these costs should reduce over time. So, can this explain Waymo’s current lack of profit? Well, no. Bank of America estimates Alphabet (Waymo’s parent company) spends $1.5 billion a year on Waymo, with all of this going on covering R&D costs. With the recent explosion of paid rides, Waymo’s 2024 revenues are set to reach $50–75 million. Yet despite that, the company is set to…
