[jessriedel]

It's based on public comments about the per-mile cost of Cruise and Waymo, and the fact that Waymo is currently operating in only a tiny number of areas. Expansion greatly dilutes the fixed costs, and iterating on the hardware will drive down the marginal/capital costs.

Amazon made no profit for many, many years, but that's because they were re-investing all their revenue. No one doubted that they could have turned a profit if they wanted. (Tbc, there is not yet a component of Waymo that is profitable because, as mentioned, they are just operating in a handful of cities.)

[foooorsyth]

>Expansion greatly dilutes the fixed costs

Where is the actual evidence of this, though? I'm not trying to be snide -- genuinely curious.

Waymo is expanding -- their service areas (and operating times) have expanded in SF and Phoenix. There's a waitlist in LA and Austin. Yet Waymo's financials are still buried in Alphabet's "Other Bets" line, which lost $1.2 billion in Q3 2023.

You think Google, which has been catching heat endlessly for falling behind in AI, has not only won the self-driving race from a technical standpoint (the claim by many in this thread), but has also found a way to make it both profitable and scalable to arbitrary locations, and they're hiding this reality in their earnings statements? Seems unlikely to me. Why bother with waitlists and slow rollouts in favorable climates? Why not blitzscale this thing to all markets and disclose the numbers to investors and send the stock to the moon?

[rcxdude]

Waymo generally seem to be extremely cautious: they have invested the most effort into the safety design of their systems and they don't shout very loudly for being the leader of the pack. I think this extends to their expansion as well: autonomous car companies are only one or two serious incidents away from severe backlash (see Cruise), and the more you operate the more likely it is that one occurs. Expanding slowly and dealing with each expansion of near-miss edge cases as you do so is a rational strategy in that case, even if you have already beaten human drivers.

(Also Google is bad at full commitment, and I don't know how much that extends to Alphabet, but they as a company seem pathologically incapable of putting even a majority of their weight behind anything, which is a significant source of failures for them)

[jessriedel]

>> Expansion greatly dilutes the fixed costs

> Where is the actual evidence of this, though? I'm not trying to be snide -- genuinely curious.

That claim was just based off how all businesses work. All the infrastructure, management, training, etc., that scale sublinearly with volume are diluted at large volume.

> Yet Waymo's financials are still buried in Alphabet's "Other Bets" line, which lost $1.2 billion in Q3 2023...

As I said, I definitely think Waymo is losing money overall right now, even in a particular regime.

> Why not blitzscale this thing to all markets and disclose the numbers to investors and send the stock to the moon?

They are in fact expanding rapidly. But this can't be scaled as fast as a software/internet company. They literally have to manufacture custom cars and, crucially, map the region in detail. Remember that Tesla's meteoric rise was ~70% growth per year. For years Waymo was only offering service to the general public in Phoenix. They opened in San Francisco in late 2022, and then in LA in mid 2023.

Also, Waymo (~$30B in 2020) is still an tiny part of Alphabet stock (>$1T), who owns a controlling interest. They have no reason to pump the stock because they have no shortage of capital.