One of the earliest, if not the earliest entrants in the autonomous driving race was Alphabet Inc. (GOOGL - Get Report) (GOOG - Get Report) , a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
Back then, the company was just called Google and its self-driving car segment wasn't called Waymo. Fast-forward to 2018 and Waymo is still considered one of the leaders in the self-driving car race. The company recently reported its quarterly results, beating on earnings per share and revenue expectations. However, it was comments by CFO Ruth Porat that caught my attention.
An analyst had asked her about plans are going forward with Waymo.
Her response broke down a bit of what Waymo is looking to do, but the company's outlook on safety stuck out to me. Particularly given the controversy that has engulfed companies like Uber and Tesla Inc (TSLA - Get Report) following autonomous-driving-related fatalities.
In Porat's words:
"The opportunity is here for us because we started with safety, and we remain a leader in safety, and we do believe that's the foundation for success... So we keep coming back to when you create vehicles that drive themselves faithfully, we think there's a lot of potential uses and business opportunities, and that's what we're focused on."
Porat's comments jive with that of John Krafcik, CEO of Waymo. He's reiterated safety in several interviews and recently made the case for Waymo's approach. Because so many other self-driving systems require at least partial attention from drivers, it can't be relied upon because there's still too much human input.
With Waymo, it's an all-or-nothing approach. Meaning that the vehicle has total control of the vehicle.
The company recently hit 5 million test miles on public roads, with the last 1 million miles coming over the past three months. Further, Krafcik said the Waymo will log about 5 billion miles of driving on private testing grounds and through computer-simulated tests.
The sheer magnitude shouldn't surprise anyone that's paid attention to what Nvidia Corporation (NVDA - Get Report) is doing in the autonomous driving space, although notably, Waymo does not use Nvidia hardware. It's also worth pointing out that Alphabet and Nvidia are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
Waymo's already started testing with the public in Phoenix, AZ. Customers can use the Waymo app to hail a ride, which will arrive without a driver at the wheel. It's a self-driving taxi service, essentially, and something that both General Motors Co (GM - Get Report) and Ford Motor Co (F - Get Report) are aiming for as well.
The self-driving company will look to expand to more states in the future, as well as secure more partnerships with automakers going forward. Currently, Waymo is working with Fiat Automobiles (FCAU - Get Report) and Jaguar. They're also looking to work with logistics companies and with cities to improve public transportation.
Very quickly -- and notably, very quietly -- Alphabet's Waymo is making some serious noise in the autonomous driving arena. It would be unwise to write the company off just because it's not a traditional automaker or chipmaker.