Waymo's test is a baby step — autonomous vehicles will serve the perimeter of the airport, avoiding the front door of terminals themselves. But it's the Alphabet unit's first foray into serving an airport. If it works, the days of driverless cars and profitable ridehailing services will edge closer.
Alphabet’s Waymo autonomous-car unit is preparing to dip its toes into one of the biggest and most challenging ridehailing markets there is: The ride to and from the airport.
Waymo is planning to test service between Phoenix Sky Harbor International Airport and downtown, the company said at a TechCrunch conference last week. Initially, its driverless Jaguar SUVs won’t attempt to hazard the promenades immediately in front of the terminals at the nation’s ninth-busiest airport. Instead, they will serve rail stations at the airport’s perimeter (see map), letting departing passengers take the shuttle from there to begin the trek to the gates.
“Eventually we’ll expand to the terminal,” said Waymo spokesperson Julia Ilina. “Terminal dropoff is a challenging, chaotic thing.”
Phoenix is already a key test market for Waymo, which like other driverless-vehicle companies is still refining its technology before a wide launch. The company is expanding into allowing fully driverless cars to serve downtown Phoenix, while the first rides to the airport will have a Waymo employee in the car in case they are needed. The airport runs will initially serve other Waymo workers before expanding in phases to “trusted testers” and the general public.
Serving airports looms as a major opportunity for Waymo and for established ride-hailing services like Uber and Lyft. Both companies have wanted to phase out drivers to become the profit engines investors in their initial public offerings expected. Uber lost $5.9 billion in the first quarter of 2022, though its core ride-hailing unit eked out a $168 million profit before interest, taxes, depreciation and amortization. That was less than 1 percent of gross bookings. Like Uber, Lyft reported a net loss but positive earnings before interest, taxes, depreciation (EBITDA) on ride hailing.
Lyft shares have lost three-fourths of their value since peaking right after the company’s 2019 IPO, and Uber is down more than 60% since February 2021.
“The thing about airports is that they’re predictable,” said University of Oregon professor Benjamin Clark, an expert in the urban planning effects of autonomous cars. Like trucking, another expected early use case for driverless vehicles, airport runs usually are made on clear, unobstructed roads, he said. “There are more obstacles in cities than on a highway trip to the airport.”
Sky Harbor generates between 11,000 and 14,000 ride-hailing trips daily, said Tamra Ingersoll, a spokeswoman for the airport, with up to 1,400 more taxicab trips.
Waymo is on the fifth generation of its driverless software platform, which it uses on Jaguar I-Pace electric SUVs. It has used its fourth-generation technology in Chrysler minivans in other parts of Phoenix, but those are not slated to be part of the airport service initially,
“We’ve been investing and moving qualitatively forward on the technical side to that fifth-generation system that is designed to work everywhere,” said Dmitri Dolgov, co-CEO of Waymo, speaking at the TechCrunch Sessions: Mobility conference on May 18.
“Now we’re exercising that muscle of deploying but doing it on the new system, and we’re moving much faster than we’ve ever been before. You’re seeing that in San Francisco. You’ll see that in downtown Phoenix, and we will exercise the playbook as we go after new markets.”
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Photo credit: The rail station Waymo will initially serve is near the perimeter of Phoenix Sky Harbor International Airport. Waymo