When Google tapped John Krafcik, an auto industry vet, to lead its self-driving car unit, the Internet giant said the project is not a separate Alphabet company but could be one “at some point in the future.” That point is next year, according to a report this morning from Bloomberg, which claimed Google is planning to deploy driverless fleets as rides for hire.
We’ve heard from a few sources that Google is toying around with this service internally, but it’s unclear when it will roll out or how it will look. Google isn’t commenting. It has tried to dampen* earlier reports of a standoff with Uber, in which Google Ventures owns a stake.
But it’s difficult to imagine a model for the self-driving car business that doesn’t center on providing transportation as a service — a driverless car summoned with an app or, per Google’s patents, a wearable. Something squarely in Uber’s turf.
Google has claimed repeatedly it does not plan to manufacture its own fleets. So it wouldn’t make money from car sales. And while YouTube and other services would see a boost from driverless cars (what else will we do in cars?), that can’t be enough to sustain a standalone operation, which Alphabet companies are meant to be. It won’t be an ads business.
Google could take the Android approach, licensing out a package of self-driving software to carmakers. One source close to the self-driving car project said Google is thinking about reimagining the inside of cars, designs that could reduce vehicle costs. Google could distribute that. Yet the licensing model depends on willing auto partners, and most carmakers are working on their own self-driving initiatives — and trying to keep Google at arm’s length.
The money here is in hauling people and things from one place to another.
“Eventually, Google’s driverless vehicles will compete with not just Uber and taxis, but also FedEx, Amazon, Seamless, transit operators and the very notion of individual car ownership,” said Bryant Walker Smith, a self-driving car expert at University of South Carolina.
Uber is rapidly investing in self-driving research, along with its own mapping tech. Most in the industry, however, agree that Google is far ahead of everyone else.
That said, Google’s stab at transportation logistics — its Shopping Express delivery service — has not come close to competing with Amazon or even proven to generate a profit. Maybe a different Alphabet company can do it better.
At a session for reporters in September, Chris Urmson, the self-driving car project director, noted that Google was keeping its business plans up its sleeve because, in part, it did not want to commit to something too early. “We certainly think about how the business model will work,” he said. “But saying you know what that’s going to look like ahead of time is fraught with peril.”
* After Bloomberg’s February report that Google was working on a service competing with Uber, Google offered this retort.
(Despite the urging of a former Re/code reporter, Google has yet to “elaborate on dat.”)
This article originally appeared on Recode.net.