TechCrunch Mobility: The cost of Waymo

The NHTSA is moving to streamline the Part 555 exemption process to accelerate the deployment of self-driving vehicles lacking traditional human controls, aiming to address the current process's complexity and length; manufacturers will still need to demonstrate equivalent safety levels. In other transportation news, JetZero plans to invest $4.7 billion in a North Carolina factory for zero-emissions aircraft, contingent on receiving over $1.1 billion in state incentives and creating 14,000 jobs. Waymo's robotaxi service is reportedly more expensive than Uber and Lyft, yet maintains demand, while the company also faced vandalism during LA protests, raising surveillance concerns.

Analysis

The National Highway Traffic Safety Administration (NHTSA) has announced intentions to streamline its Part 555 exemption process, a move aimed at accelerating the deployment of autonomous vehicles (AVs) lacking traditional human controls such as steering wheels or pedals. While specific details remain somewhat opaque, the agency acknowledges the current process is lengthy, complex, and ill-suited for AVs, though manufacturers must still prove their vehicles offer an equivalent safety level to compliant vehicles and serve the public interest. This regulatory shift could benefit companies like Waymo and Tesla (TSLA), which are actively developing and deploying AV technology. Separately, JetZero, a zero-emissions aircraft company, plans a significant $4.7 billion investment in a North Carolina factory, supported by over $1.1 billion in potential state performance incentives contingent on creating over 14,000 jobs between 2027 and 2036. This venture has attracted strategic investment from United Airlines (UAL) and Alaska Airlines (ALK), indicating growing airline interest in sustainable aviation, though first customer deliveries are not expected until the early 2030s. In the ride-hailing sector, Waymo's robotaxi service reportedly commands higher fares than Uber (UBER) or Lyft (LYFT) but maintains ridership, suggesting consumer willingness to pay a premium for autonomous experiences. However, Waymo also faced operational challenges, including vandalism to its vehicles during LA protests, which has raised questions about the use of its onboard surveillance technology. Other developments include Tesla's planned robotaxi launch in Austin, a Wayve and Uber partnership for a future driverless service in London spurred by accelerated UK government timelines for AV pilots, and new product reveals in micromobility and Apple's (AAPL) CarPlay.

Key Decisions for Investors

• Investors should monitor the NHTSA's progress in streamlining AV regulations, as this could reduce deployment timelines and barriers for companies in the autonomous vehicle sector, though significant safety validation hurdles will remain.
• The substantial long-term investment by JetZero, backed by United Airlines and Alaska Airlines, presents a potential opportunity in sustainable aviation, but the extended timeline to initial revenue and reliance on state incentives warrant careful due diligence for those with a long investment horizon.
• Waymo's ability to charge premium pricing despite competition from Uber and Lyft indicates strong early demand for AV services; however, recent vandalism incidents highlight ongoing operational and public acceptance risks that AV operators, including Tesla, must navigate.
• Consider the evolving competitive landscape in ride-hailing and AV deployment, noting Tesla's upcoming robotaxi launch and international expansion efforts like the Wayve-Uber partnership in London, which are influenced by local regulatory environments.