Waymo is planning on entering Las Vegas, but it is not alone in the market there. Amazon-backed Zoox already has a public robotaxi presence in the city, giving Waymo an established rival as it begins its Nevada rollout. Alphabet Inc.’s (NASDAQ:GOOGL) autonomous-driving unit has started offering fully autonomous rides to public passengers in Las Vegas, its first public robotaxi market in Nevada. Waymo is beginning with a few dozen vehicles and plans to expand the fleet over time.
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The launch puts it directly alongside Amazon-backed Zoox, which began commercial operations in Las Vegas in August. It also adds another city to a Waymo network that has been expanding quickly across the United States.
Bull Case
For Alphabet, Las Vegas matters less as an isolated market than as another sign that Waymo is learning how to repeat its rollout. The company spent months studying Las Vegas roads before opening rides to the public. Waymo says more than 100,000 people expressed interest in riding, giving it a substantial pool of prospective customers as access expands.
The service also introduces Waymo’s newer hardware more prominently. Las Vegas is among the first cities where the majority of the fleet will consist of the Ojai, its purpose-built autonomous vehicle equipped with the sixth-generation Waymo Driver. The initial service area spans nearly 24 miles and includes destinations such as Allegiant Stadium and The Venetian. Waymo has much larger ambitions for the Ojai than one city. In May, the company said it was scaling production capacity for Waymo-enabled vehicles toward tens of thousands of units annually at its Mesa, Arizona factory.
That manufacturing push becomes more relevant as Waymo adds markets. Earlier in September, it began welcoming riders in Denver, San Diego, and Tampa, while Las Vegas now gives the company another operating city. The broader pattern is becoming difficult to miss, as Waymo is moving from proving that autonomous ride-hailing works in a handful of places toward figuring out how quickly it can reproduce the service elsewhere.
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Bear Case
Las Vegas also shows how quickly the competitive landscape is filling up. Zoox reached the city’s commercial robotaxi market first, beginning paid rides in August. Reuters identified Zoox and Tesla among Waymo’s major competitors as autonomous-driving companies expand their fleets and geographic footprints.
The company’s broader valuation makes execution more important. Waymo raised $16 billion in February at a $126 billion valuation. Expanding into more cities helps build the case for that valuation, but geographic expansion by itself does not establish what returns Alphabet will ultimately earn from the business. There is still a considerable distance between operating robotaxis successfully and proving the economics of doing so at very large scale.
Conclusion
Las Vegas is interesting precisely because Waymo isn’t entering an empty market. Zoox got there first, and Waymo arrives with a few dozen vehicles, more than 100,000 expressions of rider interest, and a new generation of hardware that it eventually wants to produce at much greater scale.
For Alphabet, that makes Las Vegas another test of whether Waymo’s expansion playbook can become repeatable rather than exceptional. The company is no longer trying to prove that a driverless taxi can carry passengers through one or two American cities, but is rather adding markets, vehicles, and production capacity at the same time. What remains less visible is the financial side. Waymo can show investors where its cars are going next, but it has yet to show them what each new city will eventually be worth.
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This article is originally published at Insider Monkey.
