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Amazon Shakes Up the Race for Self-Driving—and Ride-Hailing

Uber CEO Dara Khosrowshahi says his company wants to be the “Amazon for transportation.” Friday, Amazon made clear that it intends to be the Amazon for transportation.

The ecommerce giant said it had agreed to acquire Bay Area–based autonomous vehicle company Zoox, a deal reportedly worth more than $1 billion. (Amazon did not respond to WIRED’s queries.) Since its founding in 2014, Zoox has been known for its technical chops, its secretiveness, and its sky-high ambition. While Alphabet’s Waymo is focusing on self-driving tech and leaving the car building to places like Detroit, Zoox has stuck to its plan to design a robotaxi from the ground up—and operate a ride-hail service. In 2018, it showed off its first prototype vehicles, which look like sensor-laden golf carts on steroids. The company has also been testing its software on more conventional-looking Toyota Highlanders in San Francisco, where it is learning to handle chaotic city streets.

In a press release, Amazon signaled that it will not stray from Zoox’s formidable self-driving goals. “We’re acquiring Zoox to help bring their vision of autonomous ride hailing to reality,” it wrote in the headline. Jeff Wilke, Amazon CEO of global consumer, said in a statement that “Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience.”

Which means the autonomous-taxi race just got more interesting. Amazon’s entrance to the space “is an existential threat to Uber and Lyft,” says Asad Hussain, a mobility tech analyst at the market analytics company Pitchbook.

In theory, autonomous vehicles and ride-hail services go hand in hand. As Uber and Lyft struggle to iron out the economics of trips, both continue to spend millions each year recruiting and retaining drivers. Moves by states including New York and California to require those drivers to be considered employees further threaten their business models. A self-driving car wouldn’t need a driver.

But lately, robotaxis have seemed to hit a rut, as the tech has proved more challenging than tech and auto executives once promised. In the last two years, well-funded competitors like Uber, Lyft, Waymo, Cruise (a subsidiary of General Motors), and ArgoAI (which is owned in part by Ford and Volkswagen) have delayed their timelines for deploying self-driving vehicles. Amazon acquired Zoox for well below its 2018 valuation of $3.2 billion.

Today, only Waymo is running an commercial, autonomous ride-hail service, only in the Phoenix metro area, and only occasionally without someone in the driver’s seat monitoring the nascent tech. In 2015, Chris Urmson, a former Google self-driving head who later cofounded self-driving startup Aurora, suggested his 11-year-old son might never need a driver’s license; the son has started learning to drive. Just this week, Aurora signaled it would shift its focus away from self-driving taxis and toward self-driving trucks. “If you want to get to market with a safe system quickly, you can do no better than to start in trucking,” Aurora cofounder Sterling Anderson said at an event hosted by The Information.

Image may contain: Vehicle, Transportation, Car, Automobile, Sedan, Sports Car, and Race Car

The WIRED Guide to Self-Driving Cars

How a chaotic skunkworks race in the desert launched what’s poised to be a runaway global industry.

If Amazon pushes ahead with its own ride-hail network using Zoox vehicles, the company may have some built-in advantages. In a note published a month ago, after The Wall Street Journal first reported that the Zoox deal was in the works, Morgan Stanley analyst Brian Nowak wrote that the company could offer discounts to its 100-million-plus Prime members, as it does at Whole Foods. He also theorized that Amazon could jump ahead of automakers, whose ability to pay for moon-shot tech like autonomous vehicles has waned during the Covid-19–induced recession. “In a post-Covid world, we believe fewer and more powerful players will be in position to deploy capital and talent to solving autonomy with a ‘play to win’ mindset,” Nowak wrote.

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