After five and a half years leading Waymo, John Krafcik announced on Friday that he is stepping down, leaving the company for two co-CEOs Tekedra Mawakana and Dmitri Dolgov.
Krafcik oversaw the company’s major milestones, its brand change to Waymo, partnerships and external fundraising, while leading enthusiasm among employees. But Krafcik’s departure signals a long and arduous reality check for the initial hype and the hope of climbing autonomous vehicles.
“If you look back over the past year and a half – there has been a growing perception in almost all autonomous vehicle development companies that this is a much more difficult problem than we thought,” Sam Abuelsamid, principal analyst at Guidehouse Insights, told CNBC on Friday. “It was not so long ago that people were projecting that we would have robot taxis everywhere in 2020. It clearly didn’t work out very much.”
Abuelsamid said Krafcik’s connections and experience in the automotive industry – he was President and CEO of Hyundai Motor America – helped Waymo establish critical partnerships with car manufacturers, including Fiat Chrysler and Volvo.
In 2020, he gave the more than 10-year-old company its first round of external financing – a $ 2.25 billion financing round led by Silicon Valley investment firms, including Silver Lake. Then it raised another $ 750 million. He also oversaw the launch of a local delivery service with freight partners, dubbed Waymo Via, and recently started his first fully autonomous car service that some residents can order in Phoenix, Arizona.
Krafcik took over the reins in 2015 and, in 2016, led Waymo to join an industry consortium to accelerate autonomous cars. Alphabet became a founding member of the group, called the Self-Driving Coalition for Safer Streets, which included Argo AI, Aurora, Cruise, Ford, Uber, Volvo and Zoox.
Knowing the business and the rear end of the scale cars, Krafcik did not deviate from reality. Even less in recent years.
Closeup of a minivan that drives alone, with LIDAR and other visible sensor and logo units, part of the parent company of Google Alphabet Inc, passing a historic train station with a sign saying Mountain View, in the City of Mountain View, in the Valley Silicon, California, with visible driver safety, October 28, 2018.
Smith / Gado Collection | Photo archive | Getty Images
Under Alphabet’s “Other Bets” umbrella, the company has been bleeding money consistently, which has been less accepted since Ruth Porat joined the company as CFO and tightened the purse strings. The Other Bets segment showed an operating loss of $ 4.48 billion in 2020. That was up from $ 2.03 billion in 2019. Covid also hurt operations, as CNBC recently discovered that Waymo was unsure one could continue to pay some workers in the midst of the pandemic.
Krafcik’s departure comes ahead of the expected federal regulations in the United States on autonomous cars.
The National Transportation Safety Board recently called on its sister agency, the National Highway Traffic Safety Administration, to impose stricter standards on automated vehicle technology. NHTSA requested comments from the public before formulating the proposed rules and closed the comment period on April 1.
Krafcik is aware of what is at stake.
After a pedestrian was hit and killed by a semi-autonomous Uber vehicle in Arizona in 2018, Krafcik told CNBC that part of his responsibility at Waymo is “to ensure that the world, the cities in which we operate and the regulators that regulate these cities understand our technology. ”
However, Krafcik was no stranger to those who overreacted in reality when autonomous cars would be available. Waymo and Krafcik assured the press and the public that the technology was coming quickly, going back to 2012, when it was still known as Google’s autonomous car project.
Krafcik said in 2017 that it would not be necessary to wait until 2020 – when analysts expected autonomous cars to become fully autonomous – but that it would give users the capacity in “months”.
“Fully autonomous cars are here,” said Krafcik at the 2017 Web Summit in Lisbon, where he presented a video of a man who fell asleep in one of the Waymo vehicles. “This is not going to happen in 2020, it is happening today.”
What he didn’t explain at the time was how early the test was and what obstacles were still ahead of him.
In recent years, the company has begun to reduce its enthusiastic tone by falling behind on its original schedule to put fully autonomous cars on the roads.
In 2019, a CNBC report found that Waymo still relied heavily on human security drivers and still required a fair amount of community membership. Shortly thereafter, Morgan Stanley cut its valuation of Waymo by 40%, from $ 175 billion to $ 105 billion, saying it underestimated the company’s strong dependence on human drivers.
In 2019, Waymo’s chief operating officer and now CEO Tekedra Mawakana, said at a conference that the hype surrounding their autonomous cars has become “uncontrollable”.
That year, Krafcik began to moderate the rhetoric a little, pouring cooler water on the subject at a 2019 meeting of the Association of National Governors. Towards the end of the year, the company consolidated operations in Detroit and Phoenix, closing its facilities in Austin, Texas, affecting about 100 workers, discovered CNBC.
With more than 20 million miles driven on public roads and 20 billion miles driven in simulation, Waymo leads other companies in autonomous driving technology. But he still has a long way to go if he wants to climb, even though Krafcik helped to move him forward.
“I think maybe he saw this as a good time to get away,” said Abuelsamid. “He put the company on the right track. And maybe he’s just tired of the fight and wants to do something else for a while.”
Krafcik did not respond to a request for comment.
CNBC’s Lora Kolodny contributed to this article.
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