Why is Google investing in self-driving cars?

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Why is Google investing in self-driving cars?

Asked at Google over a year ago

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Rafa · Answer 1 · 2021-12-26T19:03:52+0000

Clarifications

Google is investing in technologies related to autonomous vehicles.
Currently, they aren’t investing in manufacturing or selling vehicles.

Structure

Size of the market

Potential revenues

Direct
Indirect

What are the threats if not entering the market

What are the opportunities entering the market

Strengths

Weaknesses

Answer

I assume that in the world, there are 1billion + vehicles.

Autonomous vehicles are becoming more popular, and it feels like the market is going in that direction.

There are a few big drivers to that change:

Innovative / excitement
It addresses some serious pain points (opportunities)
- Driving is time-consuming - drivers would prefer doing something during that time.
- The low efficiency of finding a parking space is low.
  - Time-consuming
  - Expensive
  - Stressful
- The efficiency of transportation of people and goods
  - Paying people is expensive
  - People drive not efficiently (get sick, get distracted, make irrational decisions, etc.)
  - The cause of ~90% of accidents is the human factor.
Business \ Revenues potential.

** screen time \ time spent in vehicles

Google’s Strengths

Capital
ML\AI\Optimization
Brand Strength
- Google in General.
- Around Navigation (Google Maps and Waze).
Brand Strength
The Android OS
- The product is already exist
- There are partnerships with some vehicle manufactures \ distributors.

Google Weakness

It depends on the vehicle manufacturers.
Unclear unique selling proposition.
Lack of massive support centers (human/technical support).
Lack of background in insurance.

Google Opportunities

Be the OS of autonomous vehicles.
- Control Entertainment (YouTube, Social Media, Google Home, Google Search) - people spend a lot of time in vehicles.
- Collect unique data for adjusting targeting algorithms of Google Ads.
- Integration with other devices. Be the IoT hub of the vehicle.
- Partnerships with vehicle manufacture.
- Google Play Store for vehicles.
- gPay - when buying gas or charging batteries.
Vertical expansion to manufacture vehicles.
Horizontal expansion - other vehicles that could benefit from autonomous navigation OS (space, ships, airplanes, etc.).

Google Threads

Be left out of the vehicle - e.g., Google may be left out of the Apple vehicles’ and lose potential data, users, revenues,...
Smart navigation systems can replace the need in Google Maps / Waze.
When Google is not involved, the regulator can decide to benefit Google’s competitors.
Attitude / Bad PR to the company that is not participating in the new industry.

@Nag · Answer 2 · 2021-08-30T19:15:25+0000

I will answer this question as a product strategy question:

Step 1- Clarify the question:

1) When we say investing, do you mean manufacturing cars or building technologies or investing in companies that are involved with building self driven cars?

2) Are we looking at a specific timeline (1 yr, 2 yrs etc.)to evaluate this strategy

3) Do we need to consider any specific competitor while evaluating this strategy?

4) Are we looking at a specific region to focus while evaluating this strategy?

Step 2- Describe the company:

Google's mission is to organize worlds information and make it universally accessible and useful.

Beyond traditional search services, Google has extended its reach into video, home management products and cloud services which are in some way are an extension of their search infrastructure. Google is one the largest corporations in the world in terms of market cap with industry defining trends and products. Google considers Microsoft as its main competitor in the search business with other organizations like facebook, amazon, apple as competitors in advertising, mobile engagement and data mining area.

Step 3: Google's strategic goals

1) Keep a tab over data business, data drives all other industries. The company with the data can control the overall business

2) Reduce dependencies on advertisements to engagement driven sales-- move into Amazon's turf

3) Expand avenues of customer touchpoints outside search and video consumption business

Step 4: Strategic imperatives for driverless cars for Google

1) Invest into driverless cars with any objective not to manufacture car but to license technologies to car manufacturers e.g. development of android platform

2) Use driverless car technology as a means to capture metrics on commutation and then sell the metrics to music, food companies and advertising corporations

3) Use driverless car technologies as an avenue to sell associated services e.g. cloud infra, cloud services, car operating systems etc.

4) Use driverless technologies to expand into associated industries e.g. Telecom, broadband , 5G infrastructure

5) Use driverless technologies to set up a company like Uber where cars may or may not be supplied by Google still the underlying infrastructure is managed by it

6) Get into a new business altogether like Hyperloop and using driverless cars as a feeder to hyperloop

Step 5: Evaluate strategic imperatives

Strategy	Revenue	Growth	Competitiveness
Invest into driverless cars with any objective not to manufacture car but to license technologies to car manufacturers e.g. development of android platform	High	High	High
Use driverless car technology as a means to capture metrics on commutation and then sell the metrics to music, food companies and advertising corporations	Medium	Medium-High	Medium-High(there are other avenues to collect this data e.g. mobile tracking etc.)
Use driverless car technologies as an avenue to sell associated services e.g. cloud infra, cloud services, car operating systems etc.	Medium	Medium-High	Medium(since Google is not a big player in cloud)
Use driverless technologies to expand into associated industries e.g. Telecom, broadband , 5G infrastructure	Medium-Low	Medium	Medium(since there are many telecom contenders already in this space)
Use driverless technologies to set up a company like Uber where cars may or may not be supplied by Google still the underlying infrastructure is managed by it	Medium-Low	Medium-Low	Medium-Low(Uber is not profitable since last 10 years)
Get into a new business altogether like Hyperloop and using driverless cars as a feeder to hyperloop	Medium	Medium- High	Medium (Too far fetched in terms of revenue oppurtunities)

Step 6: Recommendations

Based on the analysis above, Google is getting into driverless cars to 'license technologies to car manufacturers e.g. development of android platform'