Alphabet's Waymo May Offer Free Rides To Promoted Destinations

Alphabet, Inc.’s (GOOG) self-driving taxi service Waymo will begin operations in a matter of weeks, but the company may still need to figure out a sustainable source of income. Waymo could potentially do that by imitating fellow Alphabet property Google, with free rides to promoted destinations, CNET reported.

Ride-sharing is a lucrative market in cities, but even industry heavyweight Uber still operates at a financial loss. In order to bring in some extra cash, Waymo CEO John Krafcik suggested letting businesses pay Waymo to offer free rides to them. Hypothetically, users could see promoted ride destinations with free or discounted rides similar to the prominent placement of search ads on Google.

"I think this is a really interesting future business possibility for Waymo,” Krafcik told CNET.

That is far from a confirmation of such a feature, but it is a look into how Waymo’s A.I.-driven taxi service might work when it launches later this year. Users who load up the app and see a free ride offer to a restaurant suddenly have their dinner plans figured out, in an ideal scenario for Waymo.

A significant amount of Alphabet’s revenue comes from Google’s extensive digital ad operation. Applying a similar approach to Waymo could bring in some extra revenue.

Originally a project within Google, Alphabet spun Waymo off into its own company in 2016. The firm’s fleet of Chrysler Pacifica minivans has been tested in the Phoenix area since then, offering services like grocery pickups to select participants.

However, area residents have complained about the vans’ inability to deal with busy intersections, lane merging and unpredictable human behavior.

Still, Waymo said Wednesday that its self-driving cars had 10 million miles of experience on public roads. When the autonomous ride-sharing service launches in Phoenix, it will be the first of its kind.