In just a couple of months Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) driverless-vehicle company, Waymo, will launch its first commercial autonomous-vehicle service to the public. Investors have known for a while that this has been Waymo's goal. But at the recent WSJ Tech D.Live conference, Waymo shed more light on two areas that the company thinks it'll benefit from.
Waymo CEO John Krafcik said that the trucking industry would be one of the first areas where the company will make money from its technology. Additionally, Krafcik said that allowing companies to pay for rides to bring customers to their stores could potentially be a significant source of income for Waymo.
With the company poised to launch a commercial version of its autonomous-vehicle services by the end of this year, let's take a look at why these two opportunities could be so crucial to Waymo.
Image source: Getty Images.
Why Waymo cares about trucking and free rides for customers
Let's start with Waymo's opportunity in trucking. The company has already been testing autonomous trucks in California, Arizona, and Georgia. Referring to the trucking industry, Krafcik said that "you could anticipate a material contribution to the world from Waymo over the next couple years."
He mentioned that the U.S. has a shortage of 50,000 truck drivers right now, and that in the next several years that figure will jump to 275,000. In a blog post earlier this year, Waymo said that its autonomous-vehicle technology is adaptable from cars to trucks, and that its semitrucks have the same custom-built sensors and self-driving software used by its minivans.
Waymo's autonomous trucks could help fill the gap between trucking demand and the shortage of workers. The company would benefit by licensing its technology to truck makers and transportation companies; that would help Waymo tap into the growing autonomous-trucking market, which is forecast to grow to nearly 82,000 trucks worldwide by 2030.
Perhaps even more importantly, Krafcik told The Wall Street Journal that companies have expressed interest in paying Waymo to bring customers to and from their stores. The CEO said about this business model: "This is a whole other channel of demand we really hadn't thought deeply about that could end up being a really significant driver of business."
That's important to note, because Krafcik said Walmart, already a partner of Waymo, has expressed interest in using Waymo in this way. Clearly, getting a retailer the size of Walmart to pay for riders to get picked up and dropped off at its stores could be an easy way to sell users on the service once it launches.