Please ensure Javascript is enabled for purposes of website accessibility

Waymo Expands Its Fleet to Launch Ride-Hailing Service

By Danny Vena - Feb 7, 2018 at 7:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

On the road to a driverless future, Waymo is accelerating.

It appears that Waymo, the self-driving division of Google parent Alphabet Inc. (GOOGL 5.11%) (GOOG 5.20%), is moving its program into the fast lane. In a joint statement with Fiat Chrysler Automobiles N.V. (FCAU), Waymo revealed that it will be adding "thousands" of Chrysler Pacifica minivans to its fleet.

This increase comes in advance of Waymo's plans to roll out "the world's first driverless ride-hailing service" in Phoenix later this year as a commercial enterprise. The company has plans to expand the service to "more cities across the United States." 

"With the world's first fleet of fully self-driving vehicles on the road, we've moved from research and development to operations and deployment," said John Krafcik, CEO of Waymo. "The Pacifica Hybrid minivans offer a versatile interior and a comfortable ride experience, and these additional vehicles will help us scale."

A vehicle with a roomy interior like a minivan is an essential part of Waymo's long-term ride-hailing plans, as it has the capacity to transport numerous passengers in one ride.

A Chrysler Pacifica minivan outfitted with Waymo self-driving technology on a sunny street.

Fiat Chrysler will deliver "thousands" of vehicles to Waymo. Image source: Waymo.

The future is now

Since late last year, Waymo has been testing Pacifica minivans in a pilot program designed to educate the public about self-driving cars. "With this technical milestone, the hybrid minivans became the first vehicle to attain Level 4 autonomy," Waymo said in a statement. Level 4 indicates that a vehicle requires no human intervention, but it is limited by the maps within its systems.  

A rear-facing display screen in a self-driving car shows a map route.

Passengers are shown their progress along the route. Image source: Fiat Chrysler.

Riders boarding the vehicle are greeted by screens welcoming them and inviting them to push a blue "start ride" button located on an overhead console when they're ready. Passengers ride in the back seats, and rear-facing screens portray a digital display of the route. 

Waymo has tested its self-driving technology in 25 cities across the U.S., including Atlanta, San Francisco, Metro Detroit, Phoenix, and Kirkland, Wash. -- and it's recorded more than 4 million driving miles on U.S. roads, on top of billions of simulated miles.

The interior of a self-driving minivan.

Display screens await riders, who must push the "start ride" button in the overhead console to proceed. Image source: Fiat Chrysler.

A growing, if unlikely, partnership

"Our partnership with Waymo continues to grow and strengthen; this represents the latest sign of our commitment to this technology," said Sergio Marchionne, CEO of Fiat Chrysler.

Chrysler minivans were an early addition to Waymo's fleet with the first delivery of 100 vehicles occurring in December 2016, after an initial agreement in May of that year. Engineers from the two companies then joined forces at a facility in southeastern Michigan to speed up the development process.

An additional order of 500 minivans came last April, which coincided with an announcement to kick off Waymo's Early Rider Program. The pilot program, which was conducted in the area around Phoenix, offered local residents rides for everyday trips to the grocery store, school, taking kids to soccer practice, and commuting to work. At the time, there was always a test driver behind the wheel.

What's it worth?

It's difficult to estimate what Waymo could be worth in the long run, but that hasn't stopped a couple of Wall Street hot shots from trying. Analysts Brian Nowak and Adam Jonas of Morgan Stanley presented their assumptions in a note to clients last May, theorizing that if Waymo's fleet expanded to 3 million cars over time, with each vehicle covering 65,000 miles annually, and producing $1.25 of revenue for each mile, it would result in a company with an enterprise value of $70 billion. 

It's important to note that this is all fun with numbers and there are many more obstacles on the road to a fully self-driving society. It does, however, give an indication of just how big an opportunity this could be -- and the future is closer than you think.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,359.50 (5.11%) $114.66
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,370.76 (5.20%) $117.07
Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.
FCAU

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.