The New York Times Company
SAN FRANCISCO — Tech companies once promised that fully functional, self-driving cars would be on the road by 2020 and on the path to remaking transportation and transforming the economy.
But a decade after Google unveiled an autonomous car prototype with global fanfare, the technology is still far from ready, and many investors are wary of dumping more money into it — just when the world could benefit from cars that ferry people and deliver packages without a human driver.
The companies that made these promises are now in a jam: To perfect their technology, they need to test it on roads. But they need at least two people in the cars to avoid accidents. Because of social distancing rules meant to keep people safe during the coronavirus pandemic, that is often not possible. So many cars are sitting in lots.
“This is a difficult time for everyone,” said Bryan Salesky, chief executive of the startup Argo AI, which is backed by $1 billion from Ford and another $1 billion in promised funding from Volkswagen. “We want to get back on the road as soon as it is safe to do so. There is no substitute for on-road testing.”
The timeout caused by the pandemic has hastened an industry shakeout that was already starting to happen. Many self-driving car companies have no revenue, and the operating costs are unusually high.
Now one self-driving car startup has gone out of business, and another is for sale. Four have laid off employees. And bigger companies are hunkering down to wait out the delays.
Autonomous driving research was derailed, in part, by a death in Arizona. In March 2018, one of Uber’s autonomous vehicles killed a pedestrian in Tempe. Many companies temporarily took their cars off the road, and after it was revealed that only one technician was inside the Uber car, most companies resolved to keep two people in their test vehicles at all times.
“That was a clear moment in time where the whole industry went from being a bull market to a bear market,” said Oliver Cameron, chief executive of Voyage, a startup in Silicon Valley. “COVID has taken us even further into the bear market.”