How robotaxis will reshape the ride-hailing market

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Silicon Valley is a testbed for a technology that is quickly becoming available across the world. At the push of a button I'm going to hail a robotaxi. Within minutes, a vehicle will be dispatched from a local depot or rerouted from an earlier trip. What will arrive is a car that doesn't have a person behind the steering wheel. So this SUV has been transformed into something quite special. Waymo, which is owned by Google, has kitted it out with about 40 different sensors, cameras, Lidar, radar. All of that's going to help it navigate public roads.

Like the drivers it shares roads with, the AI model that is being used to operate the vehicle needs to make assumptions about the cars and pedestrians around it. When should it proceed at a junction or switch lanes on the freeway? Besides obeying traffic rules, it has to deal with the unexpected, hitting the brakes when, for example, a child jumps out onto the road. These are all decisions you and I would make when we're driving around, but it's quite a different beast when a computer is making those judgments.

The goal is to build the model driver, a system better than people. Robotaxis are reshaping the traditional ride-hailing market, where Uber and Lyft completely revolutionised hailing a cab while robotaxi is changing how people live and work in a city. And now Waymo and other operators are trying to expand their services. Waymo operates in more than 10 cities across the US and has about 3,000 vehicles on the road. It has quickly emerged as the leading robotaxi player and set its sights on several key ride-hailing markets.

London is on Waymo's agenda this year with the UK government permitting trials in one of Europe's largest cities. The company is also testing in Japan's capital, Tokyo. Uber chief executive, Dara Khosrow,shahi has hailed the trillion-dollar opportunity tied to robotaxis. He's investing billions of dollars buying up fleets of robotaxis to operate on the network. He's also investing in companies like Nuro, Waabi, and Wayve, all of whom want to enter the robotaxi market. But one operator is building something slightly more unique.

Here in California, Zoox is developing what it calls a horseless carriage. Founded in 2014, the Amazon-owned robotaxi developer has developed a bespoke vehicle to run on its own ride-hailing network. The company started to roll out services in Las Vegas last year and has been testing services in San Francisco with a small selection of customers. Zoox is hoping that this toaster-shaped vehicle is the best representation of the end state for robotaxis. Jesse Levinson is one of Zoox's co-founders and its chief technology officer. He's been tinkering with autonomous vehicles for the better part of two decades.

So Zoox is a custom vehicle that was designed from the ground up just to be a robotaxi. So we had an unusual idea way back in 2014, that if you had autonomous technology you could build a better type of vehicle that was designed to move people around cities without all the traditional manual controls and architecture of a car that was designed to be driven by humans.

When you start from scratch and design a vehicle that's a different shape from any other vehicle that's ever been made you have some opportunities and you have some challenges. We do have some additional expenses that a retrofitted car doesn't. The retrofitted car also has a lot of expenses that we don't have, for example, batteries. A retrofitted car is not going to be able to drive all day and all night on a single charge as a robotaxi.

What that means is if you have a retrofitted car you're going to have to be taking it to your depot. And you're going to have to be charging it in the middle of the day. And that's time that you could have been carrying paying customers if you had a big enough battery. But instead you're wasting time driving to the depot. And you're using charging infrastructure and charging during peak energy hours. So there's a lot of these second-order effects that might not be as obvious that actually are meaningful advantages for Zoox.

Zoox, like Waymo, has its own bespoke app, but the vehicle that customers hail is quite a bit different. The Zoox vehicle that arrives is about the size of a compact car. Unlike a more conventional road vehicle, it can move in either direction. That allows it to navigate tricky urban environments. Inside the cabin riders experience something that's quite spacious. They sit side by side with their friends and also across from them, allowing them to easily communicate and engage socially. To the side of each rider is a control panel. So here, you can control things like the temperature of the Zoox or set your own music.

Because the Zoox vehicle is designed very differently to a conventional road passenger vehicle, the airbag system within it is also quite different. So rather than striking passengers from the front, the airbags deploy from around the passengers, engulfing them instead.

Robotaxis like this one will still face some hurdles before they are widely adopted, with questions from regulators about their safety. Bryant Walker Smith is a leading expert on the law and policy of emerging transportation technologies, particularly autonomous vehicles. I mean, the first question really is, how are regulators responding to the technology as it's being deployed, particularly here in the US at the moment?

Regulators have taken a variety of approaches. Some of it is preparing the groundwork, trying to think through the frameworks. Are our existing frameworks OK? Because in some ways they might be. Do we need new frameworks? This is what the UK has emphasised. And then a lot of it, particularly in places where automated vehicles are deployed, has been a much more responsive, interactive approach. Now, in some ways, we can criticise that as regulatory Whac-A-Mole, right? A problem comes up, you try to hit it. A problem comes up, you try to hit it. In other ways, that's the flexible approach that allows regulators to learn in real time and act in at least near real time.

Operators have self-reported hundreds of incidents of NHTSA, the US safety regulator. This includes incidents where the vehicle has struck another passenger car and even cyclists. A number of these incidents would have taken place with a driver behind the wheel, but robotaxi operators are promising better than human capabilities. This does appear to be the case so far.

NHTSA estimates that there's roughly one fatality for every 100mn miles travelled with a person behind the wheel. In a safety report published in late 2025, Waymo said that it had carried passengers for more than 127mn miles, with no fatal crashes. The group's own analysis of driving data to date estimates a 90% reduction in incidents leading to serious injury. Despite a robust safety record, each accident risks undermining an operator.

Waymo is a company that is getting to the point of having statistically significant mileage, where they can start to make pretty grounded comparisons, at least between injuries as between their fleet and some hypothetical comparable human-driven fleet. There, we can start to say that specific to Waymo, not automated driving everywhere, that in the environments in which Waymo is operating there seems to be encouraging evidence that the kinds of human crashes that we see are less prevalent or less severe with Waymo. There are a lot of caveats there. We don't have statistically significant information, for example, about fatalities. And if a robotaxi were tomorrow to go through a school bus stop sign and hit a dozen kids, all of the data collected over the last few years would be irrelevant.

Tekedra Mawakana, Waymo's co-chief executive, has said that she expects society will accept a fatal crash caused by a robotaxi. Speaking at an event in late 2025, she said that the challenge was ensuring the bar for safety was high enough for the sector to avoid incidents that erode trust in the entire market.

As we go into new markets we really take our time and care to introduce our vehicle and our service to the local community. We think that's really important. I think it's important for robotaxis in general, maybe especially important for Zoox, because our vehicles do look different, and they stand out. We'll have pop-ups with local businesses, let people sit in it. We have a lot of material online to familiarise people with the Zoox concept, including a lot of information about our safety case, how we do testing and validation.

It's definitely a journey, right? Even if the regulatory framework today does not allow this technology in every single major city, we believe over the next several years, as the technology demonstrates not only its safety, but its many, many benefits to communities, that the states and cities where it's not yet allowed, we are optimistic they will change their mind.

When these services do eventually arrive in cities, consumers are going to have to decide between driverless cars and hailing more conventional vehicles. By some estimates, riders are paying roughly a third more to ride in a robotaxi in San Francisco than an Uber with a driver behind the wheel. Ultimately, what will shape the adoption of these vehicles is whether customers can access them and afford to use them. In Silicon Valley, a place where trillions of dollars are spent on moonshot bets, well, they've fast become an easy way to get home.