Even if Waymo has the technology—imagine that it was just done today—they still need time to get it to scale and they need deep automotive partnerships to make that happen.
Madrigal: The automotive companies have tended to say, “It’s nice that Google can put $100,000 worth of sensors on a car, but we’re talking about delivering automotive technology to the masses.” Is that the key problem as the makers of the suite of technology?
Urmson: I don’t buy that argument two ways. In a ride-hailing or a public-transit business model, the cost of the equipment on the car doesn’t matter. If it is $10,000 or $20,000 or $50,000, it’ll work out. The economics will work. And at the same time, there is this false equivalence where the cost of $100,000 of equipment on a car today is being equated to the cost of equipment on a fielded, scale-deployed vehicle. If you go and look at the prototype builds of any production car. Go pick the least expensive car that you might buy. I don’t know what that is in the market today.
Madrigal: Ford Escort.
Urmson: Don’t knock Ford Escorts! That was my first car.
Madrigal: Mine too!
Urmson: A little blue Ford Escort station wagon.
Madrigal: I had the ZX2.
Urmson: You had the sporty one.
Madrigal: That’s actually dorkier, though.
Urmson: You might be right. But when they built the first 50 of those, those are probably between $250,000 and $500,000 a piece. Going through the manufacturing process, the design for manufacturability, the supply-chain management process, it crushes down to $12,000 a car or whatever it is.
The same will happen on the other elements. If you think about radars, for example. Automotive radar today, you could probably buy for $50, if you were an OEM buying a million of them for a model run. When they were making the first of those, I guarantee you they were $20,000 to $50,000 apiece.
When people talk about this, you have to look at what we would call “should-cost” pricing. Take a laser off the shelf and look at the parts that are in it. Sometimes if it is a fiber-optic laser, getting the yttrium-doped fiber is expensive. But if you look at a laser-diode LIDAR system, there’s nothing in there that should cost anything. Laser diodes are pennies to dimes apiece. The APDs are pennies to dollars apiece.
And those are small volumes and each of those will drop an order of magnitude if you order an order of magnitude more of them. The cost of these things will collapse when there is actually volume behind them.
Madrigal: What are people not thinking about with self-driving cars that they should be?
Urmson: The hard question is how this technology will be ultimately used and what is the deeper impact. The smartphone has been around or about a decade. If you look at the implications for this 10 years ago, I don’t think we would have called it. I don’t think anybody saw Uber or Lyft.