Just a few weeks ago, Alphabet's (GOOGL) (GOOG) Waymo was the first company in California to receive a permit to operate self-driving vehicles without a test driver. Now, it's set to become the first company to commercially launch an autonomous taxi business.

Waymo has been testing in Chandler, AZ. for a while now, running fleets of autonomous test vehicles for a limited selection of customers. These cars have safety drivers within the car, ready to take over at a moment's notice if anything were to go wrong. Waymo's long-standing goal has been to launch a commercial service by the end of 2018, but as days continued to fall off the calendar, many were beginning to doubt it would happen. Then Ruth Porat, Alphabet's CFO, tipped her hand to some good news.

Speaking during Alphabet's third-quarter conference call, Porat said that Waymo is beginning to experiment with pricing. That suggested that commercializing the service was further along than many had realized and also gave hope to the fact that it may launch this year after all.

Now according to sources, Waymo will commercially launch its service in December, serving the same 100 square miles around Phoenix that it has so far. Some are also saying that it will initially only be available to the same 400 participants in Waymo's Early Rider program, before eventually opening up to more customers in the future.

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Waymo is now logging about 1 million miles in month in real-world test driving
Waymo is now logging about 1 million miles in month in real-world test driving

Some vehicles will also have a safety driver, but many will be fully autonomous without a safety driver on board. In those cases, there will be humans in Waymo's control center, ready to help in complicated situation. Pricing is expected to be on par with an Uber, Lyft or other ride-hailing service for the time being. As more competition enters the market, though, pricing could fall.

A few months ago, I spoke with Chris Heiser, the CEO of Renovo, who said that Waymo's ordering of more than 65,000 vehicles from Fiat Chrysler (FCAU) suggests the company is looking at a rollout of 10 to 20 cities over the next few years.

So in the grand scheme of things, it doesn't really matter if Waymo launches its service in December of 2018 or January of 2019. But the fact that the company is getting these vehicles on the road in a commercial sense is a major milestone in the autonomous driving industry.

If it indeed launches next month, it paves the way for more cities to be added to the list and more companies to join the mix. Where Waymo will launch next is uncertain, although the Bay Area is a constant discussion, given its close proximity. General Motors' (GM) Cruise is looking to be next, with plans to launch in 2019. Daimler (DDAIF) is working with Bosch and using Nvidia's (NVDA) new DRIVE Pegasus platform to power its Mobility-as-a-Service (MaaS) ambitions, with plans to launch within the first few years of next decade.

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

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