Alphabet Inc , has a subsidiary focused on building self-driving cars. The unit, called Google Auto has a fleet of self-driving cars on the streets of California and it has a fleet of Lexus cars fitted with self-driving features. It seems that the firm is not ready to enter a direct rivalry with other carmakers because it doesn’t have plans to sell its cars to consumers.
Alphabet to spin off self-driving unit
Bloomberg Business reports that Alphabet has plans to spin-off its self-driving car unit as a stand-alone firm. The restructuring that gave birth to the parent firm, Alphabet Inc is already causing the firm to rethink its approach to costs. Alphabet Inc has said that it would stop handouts to its subsidiaries and that they must justify their expenses by showing fiscal smartness. The spin off would force Google auto to find ways to make money.
One of the ways through which he self-driving project team could make money is to sell their cars or license the tech to other firms. The Verge reports that the firm is getting ready to challenge Uber in ride-hailing business as it plans to debut self-driving taxis. The report has it that “Google plans to start small by deploying its multi-sized autonomous fleet in confined areas like college campuses, military bases, and corporate office parks.”
Starting a ride-hailing service with self-driving cars in confined areas would allow the firm to log more miles without having to worry about rules for self-driving cars on public roads. The ride hailing service would also save the firm from direct rivalry with traditional carmakers .Google needs to avoid that rivalry because it doesn’t make the cars itself and it might not be able to match the scale of carmakers who have factories.
Yet, avoiding a rivalry with carmakers will make put the firm in direct rivalry with Uber. Alphabet’s Google Venture has a stake in Uber; hence, a direct entry into Uber’s turf might lead to an M&A activity between Alphabet and Uber. M&A deal with Uber or not, the ride-hailing service would help Google to generate some money while it perfects its technology.
Alphabet is not cool with rules for self-driving cars
Alphabet Inc has expressed its angst with proposed rules for self-driving cars by Californian regulators. California used to be a home for self-driving car projects but the city might take a tougher stance going forward.
Part of the proposed rules for self-driving cars restricts the use of driverless cars on public roads unless there’s a licensed human driver on board. More so, the rules will require driverless cars to have a steering wheel and pedals. Alphabet has said that its goal is to make cars that won’t have wheels or pedals and hat can take anyone from A to B at the push of a button.”