Alphabet’s (GOOGL - Free Report) self-driving unit Waymo unveiled its first paid self-driving taxi Waymo One in Arizona, putting an end to its long-awaited quest for driverless car services.
The latest taxi service of the company will serve the people of Phoenix suburbs namely Chandler, Tempe, Mesa and Gilbert.
The company has simplified the system by creating an app. The riders can avail the service via this app. Further, there will be a human driver to assist in case of any emergency or untoward incident.
We note that the latest move of the company will help it in gaining momentum among consumers who are eagerly waiting to avail the driverless technology. Moreover, the service is going to aid the company’s revenue generation which will drive its top-line growth.
Coming to the price performance, shares of Alphabet have returned 0.9% on a year-to-date basis against the industry’s decline of 23.2%.
Autonomous Vehicles Hold Promise
Alphabet’s strong focus toward expanding presence in the autonomous vehicle market on the back of its robust self-driving technology and winning deals for testing its driverless cars are acting as tailwinds.
Further, the company has expanded its scope in this particular space by rolling out self-driving trucks for freight services. Notably, this initiative is also gaining steam and driverless trucks are anticipated to come on road soon. Further, the company’s efforts toward licensing its technology to automakers for direct selling to customers remains a key catalyst.
All these factors will aid Alphabet to rapidly penetrate the global self-driving car and truck market which as per a report from Grand View Research, is projected to witness a CAGR of 63.1% between 2021 and 2030.
Further, a report from Zion Market Research indicates that this market is expected to hit $26.58 billion by 2024 at a CAGR of 25.7% between 2018 and 2024.
Moreover, the latest move of the company will help it to reap benefits from the global driverless taxi market which as per a report from Technavio, is expected to witness a CAGR of 167% between 2018 and 2022.
Gaining Competitive Edge
The immense growth opportunities in this autonomous vehicle market are luring enough to attract other tech giants like Apple (AAPL - Free Report) , Amazon (AMZN - Free Report) and Baidu (BIDU - Free Report) which are also leaving no stone unturned to grab a piece of this market pie.
In fact, the iPhone maker has hired Doug Field, a former chief Tesla vehicle engineer, and Jaime Waydo, a former Waymo engineer & NASA veteran, for its own self-driving project. This move is likely to speed up the launch of its self-driving car.
Further, the e-commerce giant has recently patented an autonomous driving technology that deals with the navigation of traffic jams, construction and weather condition.
Meanwhile, the Chinese search company Baidu has added Apolong, an autonomous mini bus, to its Apollo autonomous driving platform.
Nevertheless, Waymo One provides Alphabet the first mover advantage which is anticipated to strengthen its competitive position against its peers.
Further, the company’s latest launch is likely to put competitive pressure on General Motor’s Cruise Automation and Uber Technologies which are yet to come up with their own self-driving vehicles.
Additionally, the pricing power of Alphabet for the new service does not bode well for popular ride sharing services namely Uber and Lyft.
Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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