Google Scaled Back Self-Driving Car Ambitions

Alphabet has backed off plans to develop a revolutionary car without a steering wheel or pedals, at least for now, according to people close to the closely-watched project. Instead, the self-driving car pioneer has settled on a more practical effort to partner with automakers to make a vehicle that drives itself but has traditional features for human drivers.

Meanwhile, Larry Page is planning to move its self-driving unit out of Google X, its “moonshot factory,” into a separate company under Alphabet, something that’s expected to be announced soon. That move has led to recent efforts to hire more managers to work under former Hyundai executive John Krafcik, who took over the program a little over a year ago.

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For Google, a problem with selling directly is that individually owned cars sit unused most of the time. That means the cars won’t be gathering data that will be routed to Google’s servers, helping to improve the decision-making algorithm, similar to how usage of Android phones helps the company refine that software. And in the long run, shared cars can generate a lot more revenue than owned ones because they’ll be in constant use. (Whether Google, the car brands, or a fleet with managers like Uber and Lyft will own vehicles themselves is an open question, but Google is expected to own and operate the vehicles of its first ride-sharing network.) The individual-sales approach, however unlikely, hasn’t been ruled out inside of Chauffeur.

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Whether Chauffeur can launch what is called a “robo taxi service” in that time frame depends on the performance of a new self-driving car prototype manufactured for Google by Fiat Chrysler.