Waymo and the Rise of the Robotaxis | Driving Too Fast | 2

0:09It's February 2018 and the federal courthouse in San Francisco is bracing for one of the biggest tech showdowns of the decade. In just a few hours, Waymo and Uber will square off in a trial that threatens to expose the deepest secrets of Silicon Valley's self-driving revolution. Reporters crowd the hallway, clutching notepads and camera gear. Lawyers from both companies move briskly through security-carrying boxes stuffed with exhibits and confidential filings. And there is one person everyone is waiting to hear from today. Anthony Lewandowski. Once one of Google's brightest robotics stars, he's the reason for this legal showdown.

0:54Waymo, Google's self-driving car division, is accusing Uber of orchestrating a calculated theft of its trade secrets. A heist worth, in Waymo's view,$1.8 billion. The allegations are explosive. Waymo says Lewandowski stole around 14 ,000 proprietary files, nearly 10 gigabytes of designs and engineering documents, before leaving Google in early 2016 and joining Uber soon after. Waymo discovered the theft almost by accident. In December 2016, a Waymo engineer was mistakenly copied on an email from a parts supplier. Attached was an image of a circuit board Uber had ordered. It was almost identical to Waymo's own confidential design.

1:45Waymo conducted a forensic investigation, and what they found was damning. A massive download from Lewandowski's account several weeks before he quit. They believe Lewandowski then tried to cover his tracks, installing a new operating system to reformat his laptop and erase any forensic fingerprints. Waymo is convinced that Uber used the stolen files to speed up its own LiDAR development, a charge Uber denies. Uber's defense is blunt. Its engineers built their own system, the designs don't match, and no one can own the future of self-driving cars. But the optics are terrible. and while lawyers argue over patents and trade secrets, Uber's autonomous SUVs are already on the streets of Pittsburgh and Phoenix, racking up test miles as the company scrambles to close Google's decade-long head start.

2:44Now, on the eve of trial, the stakes couldn't be higher. After 10 years of research, secrecy, and invention, Waymo, the company that helped create the self-driving car, is no longer racing ahead. It's fighting to protect the very technology it pioneered.

3:16From Wondery, I'm David Brown, and this is Business Wars.

3:41In the last episode, Google launched a top-secret project to build a self-driving car. After years of research, it unveiled Waymo, a new company promising to put robo-taxis on the world streets. Now, Uber and others are racing to catch up. By hook or by crook. This is Episode 2, Driving Too Fast. It's March 2017, and while the lawsuit with Waymo intensifies, Uber's self-driving project is making progress in California. The state's Department of Motor Vehicles has finally given the company approval to resume testing its self-driving SUVs on the streets of San Francisco, albeit with a human safety driver behind the wheel and absolutely no paying passengers.

4:34It's a comeback for the ride-hailing company and a reminder of just how chaotic Uber's rush into autonomous driving has been. The company first put its experimental Volvos on the road in September 2016, offering test rides to paying passengers in Pittsburgh. and soon after in Tempe, Arizona. The goal was clear. Catch up to Waymo and do it fast. Then came California. Instead of waiting for a permit, Uber began testing its cars in San Francisco without the required state approvals. The decision saved time, but soon backfired. Within days, video clips surfaced showing the cars running red lights at busy intersections.

5:23Hey, you know, we've seen this before. A video clip that says what others might be thinking. For its critics, Uber seems to be treating regulation like a speed bump, not a guardrail. But this isn't so much a Silicon Valley problem as a problem in business more broadly. Many young companies think cutting corners buys time. But more often, it just buys trouble later on. California's Department of Motor Vehicles ordered Uber's robot fleet off the road. Uber argued that the rules shouldn't apply because its car still had a human safety driver behind the wheel, someone who was paid to sit in the driver's seat and take over if something went wrong.

6:10The state regulator didn't buy it. It classified the vehicles as autonomous and revoked their registrations. So in December 2016, Uber's self-driving cars were loaded onto trucks and taken to Arizona, where Governor Doug Ducey, eager to turn the state into a haven for innovation, welcomed them with open arms. Two months later, Uber suffered another blow when Waymo filed a lawsuit, claiming that its one-time protege, Anthony Lewandowski, had stolen trade secrets before defecting. For most companies, this might have been a fatal one-two punch. But under CEO Travis Kalanick, Uber still plays by his favorite rule, ask forgiveness, not permission.

6:59So, after being banished from San Francisco, the company applied for the proper permits. Now, with state approval in hand, its autonomous cars are back on the streets, this time under strict oversight. Uber's gamble has paid off, for now. But while Uber is moving fast and breaking rules along the way, Waymo is moving slow, steady, and sure. You know, seems like every industry has its hares and its tortoises. The flashy players may get all the headlines, but the patient ones often get durability. Going slow doesn't mean falling behind. it often means fighting fewer fires compared to the competition.

7:44In fact, for a small business, consistency can be a competitive advantage all of its own. And in the long haul, markets tend to reward reliability more often than they reward drama.

8:02It's 2017, and the sun is beating down on a wide strip of tarmac outside a police training yard in Chandler, Arizona. Waymo's pale gray Chrysler Pacifica minivans are parked in neat rows, their rooftop sensors glinting like helmets in the heat. It's a peaceful scene. Then, all hell breaks loose. A wall of sound erupts from every direction. Police cruisers scream in from one end of the lot. Fire engines roar past in the opposite direction while ambulances weave through the chaos. Red and blue lights flash across the minivan's curved panels. Inside a nearby tent, engineers stare at their monitors, watching as the vehicle's microphones and LiDAR feeds erupt in color and noise.

8:52This is Waymo's first emergency vehicle test day, and the mission is simple but nerve-wracking. Find out whether the world's most cautious robot cars can navigate a full-blown emergency. If the algorithms misread a reflection or mistake an echo for silence, one of those minivans could roll straight into a fire truck. For several tense minutes, the scene looks and sounds like a full-blown crisis. Then, one by one, Waymo's Pacificas start to react, slowing, edging aside, signaling turns and yielding as the convoy of sirens surges past. The engineers exhale. The cars did it. They responded like a careful human driver would.

9:44It won't make national headlines, but for Waymo, the day represents a victory. While its rivals chase speed in hopes of claiming market share early, Waymo is teaching machines to stay calm amid chaos and to keep people safe. Waymo isn't just a moonshot anymore. It has a CEO with a plan, John Krafcik, an auto industry veteran who's previously worked at Hyundai and Ford. For two years, he's been reshaping the company from a research lab into a business with customers, partners, and finally, a promising path to revenue. Originally, Google considered licensing its tech to automakers and building its own cars, but Kraftschick is bringing focus.

10:35He views Waymo as a self-driving technology company, not a car manufacturer. While licensing talks with manufacturers like Ford and Fiat Chrysler plod on, Kraftschick focuses the business on launching Waymo's own ride-hailing network. The logic is simple. Control the vehicles, control the data, control the experience. To make the point, Kraft Chick strikes a deal guaranteed to Sting Uber. A partnership with Lyft, its fiercest rival. The deal, announced in May 2017, will allow Waymo to test its self-driving rides on Lyft's platform. The message is unmistakable. Waymo isn't waiting around anymore.

11:21It wants the same passengers Uber once assumed were its own. For the first time since Google co-founder Larry Page's challenge a decade earlier, Waymo has both a product and a business model. A fleet of robo-taxis that can earn money while they learn. It's February 2018, and after a year of accusations, counterclaims, and damaging headlines, The case that once threatened to define Silicon Valley's self-driving wars finally ends, not with a bang or with a whimper. Waymo settles with Uber out of court. The showdown that could have bankrupted reputations and reshaped the industry concludes with a handshake.

12:11By now, the main players in the dispute have fallen. Uber's hard-charging CEO, Travis Kalanick, has been forced out after a string of scandals. And Anthony Lewandowski, the engineer at the heart of the lawsuit, has been fired, accused of refusing to cooperate with the investigation. Under its new leadership, Uber wants peace. It agrees to give Waymo a 0.34 % stake in Uber's business. It sounds small, but this stake is worth around$245 million. Uber also pledges not to use any of Waymo's software or hardware in its autonomous vehicle program. For Waymo, it's a vindication, if not quite an outright victory.

12:59The company that started in secrecy inside Google's labs has survived betrayal, lawsuits, and well-funded rivals. But as the lawyers pack up their boxes, the business race continues. And no one, not Waymo, Uber, or Tesla, has yet won the race to build a driver that can truly replace humans. For Anthony Lewandowski, the story doesn't end there. He moved fast and mostly broke himself in the process. The man who once stood at the center of Silicon Valley's biggest race crashed out of it entirely. He lost his job, his reputation, and the fortune he'd hoped for. He sold his company to Uber in a deal worth up to$680 million, but the payout depended on hitting a series of long-term technical milestones inside Uber's self-driving program.

14:00None of those milestones were ever reached. And when Uber fired Lewandowski for refusing to cooperate with its internal investigation, he lost the unvested stock tied to the deal. In the end, he walked away with almost nothing. And then came more trouble. In 2020, federal prosecutors tried him for the theft of trade secrets from Alphabet. Lewandowski pleaded guilty. The judge called it the biggest trade secret crime he had ever seen. Lewandowski was sentenced to 18 months in prison. But before he served a single day, he was pardoned by President Donald Trump. Today, he has a new venture, Pronto AI, a startup focused on autonomous haulage systems.

14:56It's a warm spring evening in Tempe, Arizona in March 2018, and Uber is running trial robotaxis through the desert city. After nearly two years of testing, the company is still chasing Waymo's lead. Each self-driving Uber has a human safety driver behind the wheel, ready to intervene if necessary. In one of the vehicles sits 44-year-old safety driver Rafaela Vasquez. She's supposed to be keeping her eyes on the road. Instead, according to authorities, she's streaming the voice on her phone. Up ahead, Elaine Hertzberg, a 49-year-old pedestrian, steps into the road. She's dressed in dark clothes but clearly visible in the glow of the streetlights.

15:42And she's pushing a bicycle while she crosses mid-block. The Uber car is traveling at 43 miles an hour and is just six seconds from impact. Inside the vehicle's computer, the sensors detect something in the road ahead. First, they misclassify Hertzberg as an object, then as another vehicle, then as a bicycle. The software keeps changing its mind. A little over one second before impact, the system finally flags a collision warning and calculates that it needs to brake. But the car doesn't stop. At this point in time, Uber's self-driving software doesn't have its own automatic emergency braking system enabled during autonomous mode.

16:29The company turned off that feature to avoid sudden stops and false positives. The system expects the human safety driver to handle emergency braking. But by the time Vasquez looks up, it's too late. The car strikes Hertzberg at full speed. She's taken to the hospital, where she dies from her injuries. It's the first known case of a pedestrian killed by a self-driving vehicle. And the fallout for all involved will be massive.

17:14The End

17:34the road. It also orders a top-to-bottom safety review. The Tempe Police Department discovers that safety driver Rafaela Vasquez was streaming video on her phone for around 42 minutes before the crash. Prosecutors later clear Uber of criminal responsibility, but Vasquez pleads guilty to endangerment and receives three years probation. Just five days later, there's another death, A Tesla Model X running on autopilot crashes on Highway 101 in Mountain View, California. Its driver, 38-year-old Apple engineer Walter Huang, is killed. To the public, the message seems clear. Autonomous cars are not ready to be on the roads.

18:22Uber's self-driving rollout stalls. When its robo-taxis finally return to the road in December 2018, they do so under heavy restrictions. Lower speeds, shorter routes, and two safety drivers in every car. For Waymo, the twin tragedies provide a grim validation of its own slow, methodical philosophy. Over the past decade, Waymo's vehicles have driven around more than 25 cities across six states, logging more than 5 million autonomous miles in the process without any fatal or life-threatening crashes. For Waymo, safety isn't a slogan. It's the product. Driving requires a lot from us. All just to get around.

19:15As Uber retreats from public roads, Waymo tiptoes into the market it's been promising to enter for a decade. In December 2018, its new Waymo One service begins operating in a small patch of suburban Phoenix. What if the world's most experienced driver was at your fingertips? A fully self-driving car, ready to take you where you need to go. The promise is seductive. Call a car with an app and a competent robot will show up whenever you need it to. Introducing the self-driving service. Waymo One. It's still an experiment for now. The rides are limited to a few hundred early adopters who are all under strict nondisclosure agreements, and they can only travel within a 50-square-mile geofence.

20:07Every turn has been mapped and rehearsed thousands of times, and the cars move cautiously, never going above the speed limit. And yet, for the early adopters, it feels like science fiction come to life. After years of secrecy, setbacks, and lawsuits, Waymo's driverless cars are finally carrying paying passengers on real streets. But as Waymo's fleet grows, so do its costs. Developing driverless cars isn't just complex, it's colossally expensive. Waymo's Chrysler Pacifica hybrid minivans are estimated to cost a minimum of$100 ,000 each once they're outfitted with the company's custom hardware. Every vehicle is effectively a rolling supercomputer, bristling with sensors and spinning lasers.

21:03And even for its parent company, Alphabet, Google's owner, the spending is starting to sting. After more than a decade and billions poured into R &D, there's still no clear path to profit. Instead, there's an ever-growing fleet of prototype taxis, plus the network of depots, engineers, and remote support staff needed to keep them running. So, in March 2020, Waymo does something unusual for a Google offshoot. It goes looking for outside money. The company launches an external investment round that pulls in more than$2 billion. Waymo insists the money isn't about survival, but scale. Yep, even Alphabet, the company that owns Google, finds the cost of driverless cars daunting, and there's no guarantee they'll ever pay for themselves.

21:58It's an expensive bet on a future that's still years from being widespread, and even further, from turning a profit. For a while, that didn't matter. Alphabet could afford to treat self-driving cars as a science project with great PR. But the bills keep growing bigger. And for Uber, which doesn't have Google's search engine revenue, throwing off tens of billions in cash each year, well, it's about to become all too much. After five turbulent years, billions in sunk costs, and one fatality, Uber finally hits the brakes on its autonomous vehicle ambitions. In December 2020, the company sells its self-driving division to Aurora Innovation, a startup led by Chris Urmson, the industry veteran behind the Sandstorm Humvee, and the man whose differences with Anthony Lewandowski helped splinter Google's self-driving team.

23:00Uber is done trying to build the future. It's going back to what it knows best, running a ride-hailing and food delivery service. As Uber bows out, Waymo picks up speed. In Phoenix, its Waymo One service transitions from cautious pilot to a fully driverless, paid-for taxi network. The cars ferry passengers across the metro area with no one behind the wheel. By early 2020, Waymo is already providing 1 ,000 to 2 ,000 rides per week for paying customers in the Phoenix area. Every one of them powered by the same invisible, tireless software brain. But a new competitor is now at the starting line, ready to gamble huge sums on the promise of a world that drives itself.

23:55It's December 2020, and Amazon is joining the race for a driverless future. Amazon, full disclosure our parent company, has just unveiled its latest acquisition, Zoox, a company with a robo-vehicle that looks like a cross between a London cab and a prop from Tron. Zoox's vehicle doesn't have a front or back. It can drive in either direction, spin in place, and even change course without ever reversing. It doesn't have a steering wheel or pedals either, just four seats that face each other. It's a robo-taxi designed entirely for passengers, because in Zooks' vision of the future, there aren't any drivers.

24:42That future, though, is still a ways off. For now, Zooks remains in testing, years away from going public. But another rival is already pressing hard on Waymo's bumper. Cruise, the General Motors-backed robo-taxi division based in San Francisco. Cruise isn't promising rides in some far-off tomorrow. It's already on the streets today, battling Waymo block by block for control of the driverless city.

25:16It's 2 a.m. on a March night in 2023. The mission district is quiet, its streets slick with night fog. After a frantic call, firefighters load a patient into an ambulance. The man is suffering a medical emergency. He's not critical, but time still matters. As the crew prepares to pull away, a driverless Waymo vehicle noses into the street and stops directly in the ambulance's path. We got a driverless vehicle blocking the lane. A firefighter steps up to the vehicle, taps the door, then speaks into the external communication panel, the only way to reach a remote operator. Someone will come and move the vehicle.

26:02Stand by. But seconds go by and nothing happens. Then, incredibly, a second Waymo rolls up and blocks the other side of the street. The ambulance is completely boxed in, its lights flashing uselessly against the white autonomous vehicles. Waymo later said it had no evidence that any of its vehicles blocked an ambulance that night. The fire department stood by its account. With no footage to settle the dispute, the episode became another flashpoint in a growing debate about what happens when driverless cars meet real-world emergencies. Several months later, the industry faces another embarrassment when a cruise prototype drives straight into a stretch of wet cement, its tires sinking as construction crews look on.

26:58Almost every company working on autonomous vehicle technology seems to be under scrutiny. Tesla's autopilot system has also been the subject of several federal investigations, from a long-running probe into crash patterns and driver over-reliance, to a Department of Justice inquiry into the company's self-driving claims. And then, in October 2023, another genuine tragedy hits. All right, we have an update now on that breaking news in San Francisco, where a woman has been seriously injured after being hit by an autonomous vehicle. A cruise robo-taxi strikes a pedestrian who'd already been knocked into its path by another car, then drags her roughly 20 feet before coming to a stop.

27:46Within a few weeks, California's DMV suspends Cruise's license. General Motors freezes its self-driving car program nationwide. By spring 2024, frustration among some San Francisco residents is reaching boiling point. Robo-taxis are clogging intersections, stalling at lights and blocking bus lanes. To some, they're just the latest symbol of tech companies testing their toys on everyone else. It's a Lunar New Year celebration in San Francisco's Chinatown. Amid drums and firecrackers, a Waymo rolls into a crowded street after dropping off a passenger. The crowd parts, then closes around it. Light that s*** on fire!

28:38A bottle smashes against the hood. Someone punches out a window. A firework arcs through the shattered glass and explodes. The Waymo goes up in flames, its sensors melting as hundreds of phones film the scene. The driverless revolution that once promised calmer, safer streets now seems to be making people angry. And yet, despite all the headlines about crashes and software errors, most rides in autonomous vehicles go exactly as planned. In fact, the data is unequivocal. Autonomous cars are safer than human-driven vehicles by a wide margin. Worldwide, around 1.2 million people die in traffic accidents every year.

29:28In the U.S., 94 % of crashes involve human error. And two out of three Americans will be affected by a drunk driving accident during their lifetime. And Waymo's data from the four cities it operates in shows you're 85 % less likely to get into an injury-causing crash in one of their cars compared to one driven by a human. But poll after poll shows that most people simply don't trust driverless cars. In 2024, AAA, the American Automobile Association, surveyed more than 1 ,000 American adults. 66 % said they were afraid to ride in a fully self-driving vehicle. A 2021 Pew Research Center poll found similar skepticism, with most Americans doubting the technology's safety, and only a minority willing to ride in a fully autonomous vehicle.

30:24The problem is that safer than a human isn't the same as safe. The cars continue to make mistakes. Sudden stops, indecisive turns, moments where a traffic cone or a plastic bag confuses a multi-million dollar computer. Errors that only reinforce people's fears. Right now, the financial impact of that fear is limited. Waymo and its rivals aren't expecting to turn a profit yet, and autonomous vehicles are on the roads in only a handful of cities. But widespread adoption will require convincing people to get over their fear. Driverless vehicles face another problem, geography. Waymo's success stories come mostly from cities built for cars like Phoenix, Austin, and Los Angeles, where the roads are wide, intersections are predictable, and the weather is accommodating.

31:19Drop those same vehicles into older, denser cities like Boston, Tokyo, or London, and every curb, cyclist, and crosswalk becomes a new challenge, a new point of potential failure. And as driverless cars become more visible, the scrutiny intensifies. Every malfunction becomes a headline, every error a viral clip. The question that once sounded futuristic now feels uncomfortably current. If machines drive better than most of us, Why do we still find it so hard to trust them?