Home Technology Uber Tests Self-Driving Cars In Arizona As Alphabet Sets Its Crosshairs

Uber Tests Self-Driving Cars In Arizona As Alphabet Sets Its Crosshairs

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

Self-driving cars are the wave of the future, and every company with a stake in the game is scrambling to be the first. Uber now has a new test market for the self-driving cars it was testing in California until regulators there put their foot down. The ride-sharing service even has the blessing of Arizona’s governor, so it is unlikely to face any problems there.

uber self driving
Image source: Doug Ducey, Twitter (Screenshot)

Arizona governor takes a ride with Uber

In a post on Twitter, Arizona Gov. Doug Ducey revealed that he was the first to take a ride in one of Uber’s autonomous cars.

Ducey supports self-driving cars and was directly involved in convincing Uber to bring its tests to his state after the California DMV banished them from the state for not being registered for testing.

The ride-sharing firm is using 16 autonomous Volvo XC90 luxury SUVs in Arizona, and riders can specifically request one in the Tempe area by asking for an UberX, a company spokesperson told Bloomberg. Tempe is the second city where the company is testing its self-driving cars, with the first being Pittsburg, Pennsylvania.

Alphabet has ride-sharing market in its sights

With the self-driving car market being such a hot one right now, it’s no surprise that the company now has some major competition. Google parent Alphabet is planning on expanding its ride-sharing service, which is based on the Waze app. The company was developing its own self-driving car through its Waymo project, but those plans have been put on hold, as it must now develop commercially-successful technology via partnerships or licensing deals.

Waymo is operating as a separate entity inside Alphabet, and the MIT Technology Review notes that it reportedly plans to push out its own fleet to compete with Uber’s self-driving cars later this year. Of note, Alphabet’s ride-sharing service works quite differently. It’s not as flexible, and it’s not really an on-demand service because it doesn’t have as many drivers.

Alphabet follows its strategy of charging less

The service would probably be very popular with riders, as it’s much cheaper than Uber’s service. While Uber agreed to pay 80% of fares to its drivers, riders only pay drivers with Alphabet’s service 54 cents per mile, which is the most people can claim as an expense on their federal tax return when using their own vehicle for business-related travel.

Uber riders sometimes pay more than $1 per mile or even more when surge pricing is in effect. A Wall Street Journal reporter tested the Waze-based service recently and aid a ride from Oakland to San Francisco cost $4.50, compared to $10.57 with Uber.

The question is whether drivers will be willing to accept such little when Uber will pay so much more, but there’s no doubt that the two firms will be eying each other carefully as the battle over self-driving ride-sharing drags on. Alphabet has much deeper pockets, but Uber will probably put up quite a fight, provided its legal problems don’t get the best of it.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.


Is This Warren Buffett Stock a Buy After Q2 Earnings Beat?

Dave Kovaleski17 hours

Credit rating agency Moody’s just posted second quarter earnings that beat consensus estimates. So is the stock a buy? One of Warren Buffett’s favorite stocks, Moody’s (NYSE:MCO), enjoyed a substantial rise on Tuesday...

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.