Waymo gains Taxi License in Arizona

by Michael Keane

Per a story written by Jonathan Gitlin fron Ars Technica (story link here), Alphabet's Waymo has been granted a license to operate as a taxi in the Phoenix, AZ area. This should add leverage to the autonomous driverless vehicle industry as more and more of the public will have access to its use. Fiat Chrysler should also see some added marketing and advertising coverage from this as more of their vehicles will be on the road and available for the public to experience.

Getting more eyes and experience behind the driverless vehicles is paramount to continue to develop the technology, and the attitude of the public. While there will be issues, it seems that step by step, driverless vehicles are becoming more of a reality. The likely jump in revenue is not far behind for Waymo and Fiat Chrysler. 

Waymo Alphabet's next Big Thing

by Michael Keane

With the expansion to Atlanta, Waymo is beginning to look like Alphabet's next big revenue generator. They are entering the holy trifecta that search, Android, and YouTube entered; growing customer base, growing partner base, and growing marketplace.

With Atlanta opening up, the number of people using the service is continuing to grow. The more miles that the service goes, the more confidence will grow in the driverless concept.

Waymo has a nice set of known partners on the driverless ride. Having a major motor company like Fiat Chrysler is a big deal. Everyone knows and is comfortable with the vehicle (Caravan) that is used. There is no "what is that" comment when looking at the vehicle, which puts customers at ease. Having Trov on the insurance end is also big, but on a different end. Most major insurance companies are fighting the driverless concept at one level or another. The reason is that the record of safety for these vehicles puts the margins of auto insurance at risk. A previous article on this subject can be found here. Insert Trov, who provides the insurance for not just vehicles, but all items in this sector. The numerous tech partnerships are too many to name. One big one is governmental partnerships. They are growing.

The driverless marketplace grows with almost new news weekly on the topic. Motor companies are investing millions on the concept. Governments are preparing their roads for it. More and more tech companies are spending on this concept.

When you put all of these things together, the likelihood of major success is high. Alphabet has to feel good about the way that John Krafcik and his team are running Waymo. 

** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Phoenix Becomes Disruptor with Partnership with Waymo

by Michael Keane

Waymo, Alphabet's self driving vehicle company, and the City of Phoenix, have been executing and delivering on their plan to bring driverless vehicles to the mainstream. We hope that there is plenty of press on experiences and process!

The Bloomberg article is below.


Waymo Partnership article

A previous blogpost on the use of Trov for the insurance of the program is here.

   ** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**

Why Tech Will Buy an Automaker

by Michael Keane

As the struggle and innovations continue to develop in the driverless car industry, the idea that a tech company will buy an automaker is becoming more and more real.  A few things come to mind in forming this idea. The first one that comes to mind is company valuation and cash balances. Many tech companies that are involved in the automotive space are sitting on a lot of cash.  The second area that indicates the probability of this idea is that there are already partnerships and smaller deals between the tech companies and the automotive companies. Another area that brings this idea to fruition is finding the answer to the question of “What does the future look like in the space and who is best capable to lead this move into the future.

If you look at the tech sector and the automotive sector in terms of valuation, you will see that it is entirely possible for a deal to happen. The following chart gives a quick snapshot of valuations of different tech companies involved in the auto space as well as a few automakers. You can see the cash balances and valuations of the tech companies actually put them in a favorable spot to make a bid. Tesla’s market cap and Ford’s is now basically equal.

Company	Valuation	Cash on Hand	Amount Invested in Auto
Alphabet	$600 Billion	$86 Billion	New Company named Waymo
Intel	$167 Billion	$5.5 Billion	Just made a bid for Mobileye
Apple	$753 Billion	$21 Billion	Undisclosed Amount in Software
Tesla	$45 Billion	$3.5 Billion	Full Electric Car Company
Ford	$47 Billion	$16 Billion	Auto Company
Fiat Chrysler	$21 Billion	$18 Billion	Auto Company
GM	$51 Billion	$14.5 Billion	Auto Company

Large partnerships are starting to abound between the two industries. Recently, Intel made a bid for Mobileye. Ford has been in partnerships with Alphabet. GM purchased Cruise Automation for more than $1 Billion dollars last year and has a partnership with Lyft. Mercedes Benz recently reached an agreement with Uber with regards to a driverless car. With all this smoke around, the likelihood of a purchase continues to get stronger and stronger.  

While in the past, someone might not associate tech with cars, today you just can’t get away from the connection. Driverless eco friendly vehicles are the future. Big companies are putting large fortunes in play to make this happens. There will be some hiccups and disasters for sure. But don’t be surprised if you wake up one morning, pick up your phone (instead of the tv), and find that a car company has been purchased by a tech company.

**Disclosure - KDK Fund, a client of KeaneVCC, owns shares of Ford. KDK Options, another client of KeaneVCC, owns an April spread options trade on Microsoft. **