Waymo dominates the US robotaxi market in 2024, but Tesla and Zoox loom on the horizon

Although GM Following its decision to shut down its robotaxi business earlier this month, the United States has never been closer to a driverless future.

For the self-driving car industry, 2024 will be remembered as the year that saw at least one major US player – alphabetOwned by Waymo – it has seen glimmers of mainstream adoption and made strides toward commercial viability.

This came after a difficult start for the local self-driving car industry.

After a decade of significant investments in autonomous vehicle companies, Uber The company sold its self-driving business in 2020 after a fatal crash, and two years later Ford It divested its stake in robot developers Argo.AI. In 2023, Cruise temporarily halted all self-driving operations after collisions led to investigations and the suspension of its licenses in California. When GM decided to pull out of the robotaxi business earlier this month, it had already pumped $10 billion into Cruise.

Waymo may have overtaken Cruise to lead the US market, but local rivals are working to catch up as well — most notably Elon Musk's automaker Tesla and AmazonOwned by Zoox.

A share of a huge market for passenger transportation services within the United States and abroad is at stake. According to research by Fortune Business Insights, the global ride-sharing market is expected to grow from an estimated $123.08 billion in 2024 to $480.09 billion by 2032.

As we approach 2025, this is the position of these major players.

Waymo is moving forward

What started as a “project driver” at Google in 2009 has become a commercial robotaxi service available to the public across several US cities this year.

The project, which was renamed Waymo in 2016, has now completed more than 5 million self-driving trips in total, the company said last week. This represents a nearly seven-fold increase from November 2023, when Waymo said it completed about 700,000 driverless rides.

Waymo service now operates in Phoenix, San Francisco and Los Angeles, covering more than 500 square miles of public roads.

The company dropped its digital velvet tether in June and opened its robotaxi service to all San Franciscans, allowing them to hail rides via the Waymo One app. Opening up to the general public has proven to commuters, and internally, that the company's fleet of autonomous vehicles can perform well in traffic conditions in a complex urban environment.

In July, Alphabet's then-CFO, Ruth Porat, announced a multi-year investment by Google's parent company in Waymo in an earnings call, which totaled $5.6 billion, with $5 billion coming from Alphabet.

Waymo co-CEOs Tekedra Mawakana and Dmitry Dolgov told employees in an all-hands meeting in November that they must expand as aggressively as possible but they must do so with safety at the forefront of all their efforts, company insiders told CNBC.

A big focus for Waymo in 2025 will be expanding its robotics service to more cities, gaining riders and continuing research and development on newer technology that will allow the company's self-driving vehicles to operate in more weather and traffic conditions.

Waymo plans to launch commercial service in Austin, Texas, and Atlanta, with Uber rides available next year. It has also begun testing in Miami with plans to offer flights to the public there in 2026.

Earlier this month, Waymo announced its first international testing destination in Tokyo. Waymo said it has partnered with taxi app GO and one of Japan's largest taxi operators, Nihon Kotsu, and will begin test flights in early 2025.

Waymo showed off its next generation of self-driving vehicles, which it will build with Chinese auto giant Geely, in August. Waymo's custom hardware and software will be integrated into Geely Zeekr electric SUVs. For this new robot, Waymo was able to reduce the number of onboard cameras from 29 to 13 and cut the number of expensive lidar sensors on board from five to four.

The company also announced a partnership with Hyundai in October to integrate the automaker's Ioniq 5 SUV into Waymo's fleet of vehicles. The companies said they will begin testing the Waymo Ioniq 5s by late 2025.

Waymo is already conducting trials and testing in Detroit, Buffalo, New York, and at a test track in Columbus, Ohio, with its Jaguar I-Pace and newer Geely Zeekr vehicles to understand how these systems perform in different types of traffic and weather.

Given its advancement and growing presence on US streets, Waymo has received a lot of social media and publicity in 2024, sparking both cheer and controversy.

On the Reddit channel, R/Waymo, users are documenting every incident involving the company, including one in February where a mob attacked a Waymo car and set it on fire. The forum also analyzed cases where Waymo vehicles were involved in collisions or backed up traffic.

A separate incident went viral when a woman posted on X in September that she was stuck in a Waymo robotaxi when two men stopped her by standing outside the vehicle and demanding her phone number.

To maintain public confidence in the safety of its service, Waymo has established a large public affairs operation, published more detailed safety reports in 2024, and works closely with the National Highway Traffic Safety Administration, first responders and authorities in the cities in which it operates. .

Tesla unveils its robotics concept

Musk, Tesla's CEO, has been promising “Robotaxi-ready” cars for about a decade. Every year since 2016, he has announced that the company is about a year away from realizing his vision, but Tesla still does not build robotaxis or operate a driverless ride-hailing service.

While Tesla hasn't fulfilled its promises of robo-taxis in 2024, Musk did reveal the look and feel of a “custom robo-taxi” from Tesla at an event in October at a film studio in Burbank, California. He called the car the Cybercab and said Tesla wants to produce it by 2027 and sell it for less than $30,000.

The fan-pleasing robotaxi concept was a two-seater vehicle with butterfly doors and no steering wheel or pedals. The Petersen Automotive Museum actually added a pre-production Cybercab to its collection earlier this month.

At the October event, Tesla also showed off the Robovan, a low-clearance self-driving bus with an Art Deco aesthetic.

Musk has promised that Tesla's Model Y and other vehicles will be able to operate as robotaxis as early as 2025 once their systems are upgraded. Model Y vehicles, without safety drivers on board, were also traded in the closed environment of the studio at the Burbank event, demonstrating how Tesla envisions they will function as a robotaxi.

At the time of the “We, Robot” event, Tesla had not applied for licenses and permits that would allow it to operate its commercial robotics service in major U.S. markets where city or state authorities require it.

Despite the lack of permits and licenses, Musk told analysts on an earnings call in October that Tesla has already built a “development app” that allows employees to request a ride that will take them anywhere in the San Francisco Bay Area.

Optimistic investors say Tesla will deliver on its promises on self-driving technology as early as next year, but critics remain skeptical in part because of several deadlines Musk has missed on robotaxis.

Tesla currently sells driver assistance systems, including a standard Autopilot option and a paid option called Supervised Full Self-Driving. In correspondence with government agencies, Tesla calls these systems “partially automated” that are not robotaxi-ready. In fine print in its EV brochures, Tesla says FSD and Autopilot require a human driver at the wheel, ready to steer or brake at all times.

This year, Tesla wrote to authorities in Austin regarding the safety outlook for its self-driving vehicle technology.

Musk has repeatedly portrayed regulation as an obstacle preventing Tesla from putting self-driving cars on American roads. On Tesla's October 23 earnings call, Musk said he would use his influence with now-President-elect Donald Trump to create a “federal approval process for autonomous vehicles.”

However, autonomous vehicle policy expert Bryant Walker Smith rejected the idea that regulation has restricted any robotaxi businesses in a publication by Stanford Law School's Center for Internet and Society. Pointing to Waymo as an example, Walker-Smith wrote: “Autonomous vehicles can be legally deployed and regulated under current federal law.”

Heating “toasters” from Zoox

Long before Tesla showed off its Robovan and Cybercab designs, Zoox in February received critical permits allowing it to transport members of the public in its self-driving vehicles in Foster City, California, this year.

Founded in 2014 and acquired by Amazon in 2020 in a deal worth about $1.3 billion, Zoox has developed a unique self-driving shuttle vehicle that features large side windows, inward-facing seats, and no steering wheel, driver's seat or traditional windshield.

Zoox in March expanded the environmental conditions its self-driving vehicles can handle on public roads to include “night driving, driving in light rain and wet road conditions, and at speeds up to 45 mph,” a Zoox spokesperson told CNBC.

The company's vehicles can comfortably carry four adults and luggage, and the minibuses feature soft lighting, ambient music and interior cameras to monitor what's happening inside the cabin. Some early riders described the look of the Zoox vehicles as “futuristic hot dog toasters” or “toasters on wheels.”

Zoox, led by CEO Aisha Evans, aims to offer free rides to more members of the public early next year, before opening up to paying customers and the general public.

The company told CNBC that the service will start in Las Vegas and expand to San Francisco. It will start with an early rider program called Zoox Explorers, allowing select users to ride Zoox for free and provide feedback.

With its robotaxis currently on public roads in Las Vegas, San Francisco and Foster City, this summer, Zoox has also begun testing in Austin and Miami, where its test fleet is still driving.

The company is also attracting top talent. One notable recent hire was Zheng Gao, who was previously the leader of Tesla's Autopilot hardware design team and is now director of hardware engineering at Zoox.

Close cruise

Despite clear demand for robotaxi rides in the U.S. market, General Motors surprised some longtime industry observers when it announced earlier this month that it would go out of business.

“Cruze was going into the robo-taxi business, but when you look at the fact that you're deploying a fleet, there's a whole process to doing that,” GM CEO Mary Barra said in a phone call announcing the strategic change.

The Detroit automaker will now focus on developing what it calls “autonomous personal vehicles” rather than robotaxis. GM has not yet determined how many of Cruz's 2,300 employees will move to its broader technology team.

“In case it wasn't clear before, it's clear now: GM is a bunch of puppets,” Cruise founder Kyle Vogt, who sold Cruise to GM in 2016 and left the company in November 2023, posted on X website after announcing the automaker's exit.

An early entrant into the U.S. robotaxi market, Cruise halted its driverless operations in October 2023, shortly before Vogt's departure. The National Highway Traffic Safety Administration fined Cruise $1.5 million after the company failed to disclose details of a serious accident that month involving a pedestrian.

A third-party investigation into the accident ordered by GM and Cruise found that culture issues, incompetence and poor leadership led to the accident.

Correction: This story has been updated to reflect the correct number of autonomous flights completed by Waymo throughout the year.