Zoox Enters Robotaxi Race with Las Vegas Launch

Five years after Amazon’s $1.3 billion acquisition of Zoox, the e-commerce giant is making a significant push into the U.S. robotaxi market. This move positions Amazon as a direct competitor to Alphabet’s Waymo, which has held a dominant position in the autonomous vehicle sector.

Zoox officially launched its public service in Las Vegas on Wednesday, offering complimentary rides from select locations. The company intends to progressively broaden its reach throughout the city in the coming months. While rides will eventually be subject to a fee, Zoox is currently awaiting necessary regulatory approvals before implementing charges.

Amazon’s entry into the robotaxi market signifies a bet on the future of transportation. However, Waymo possesses a considerable advantage, having provided commercial driverless rides since 2020. Waymo reported surpassing 10 million paid rides earlier this year and currently operates in five cities with plans to expand to Dallas, Denver, Miami, Seattle, and Washington, D.C. in the coming year.

Tesla initiated a limited robotaxi service in Austin, Texas, in June, albeit with human supervisors on board, marking a cautious but notable step into the autonomous ride-hailing landscape. However, Zoox is charting a different course. Unlike Waymo and Tesla, Zoox’s purpose-built electric robotaxi departs drastically from conventional automotive designs. Eschewing a steering wheel and pedals, the vehicle’s rectangular shape has prompted some industry observers to liken it to a “toaster on wheels.”

“You can shoehorn a robotaxi into something that used to be a car. It’s just not an ideal solution,” Jesse Levinson, Zoox co-founder and technology chief, explained to CNBC in Las Vegas. “We wanted to do that hard work and take the time and invest in that, and then bring something to market that’s just much better than a car.” This ground-up approach reflects a core philosophy of optimizing the entire system for autonomous operation, rather than adapting existing designs.

Founded in 2014, Zoox was established five years after Google initiated the project that later evolved into Waymo. The company plans to introduce an early rider program in San Francisco before the end of the year, following the Las Vegas debut. Currently, Zoox is testing a fleet of 50 robotaxis in both San Francisco and Las Vegas, gathering crucial operational data and refining its autonomous driving algorithms.

Austin and Miami are slated as Zoox’s next deployment locations. While testing will soon commence in these markets, retorfitted test vehicles are already in operation in Los Angeles, Atlanta, and Seattle, providing valuable insights into diverse urban environments.

“We think it’s very, very early days, and the future is not written yet,” said Levinson, during a demo ride with CNBC, emphasizing the nascent nature of the industry and the vast potential that remains untapped.

Zoox’s Las Vegas depot occupies 190,000 square feet – approximately the size of three football fields. This facility houses the vehicles poised to initiate operations throughout the city. Users will be able to summon these robotaxis via smartphone from renowned locations such as Top Golf, Area15, Resorts World Las Vegas, New York-New York Hotel & Casino, and Luxor Hotel & Casino. The strategic placement of these initial pickup points aims to cater to the city’s bustling tourist population.

The robotaxi features two rows of seats facing each other. Its symmetrical design extends to the front and rear, incorporating bidirectional wheels that allow movement in either direction without requiring a turn. This enhances maneuverability in urban environments. A single charge provides up to 16 hours of operational runtime.

Expansive, floor-to-ceiling windows offer passengers panoramic views of the Las Vegas Strip. The interior is designed to facilitate conversation among riders, fostering a communal experience. This emphasis on passenger experience is a key differentiator for Zoox.

“It’s not a retrofitted car,” said Zoox CEO Aicha Evans. “It’s built from the ground up around the rider.” This philosophy underscores Zoox’s approach, prioritizing passenger comfort and functionality over adapting existing vehicle platforms.

CNBC interviewed Evans at Zoox’s headquarters in Foster City, California, providing insight into the company’s operational hub and future strategies.

In addition to its distinct vehicle design, Zoox is pursuing a unique go-to-market strategy compared to Waymo, which has cultivated partnerships with automakers such as Chrysler, Jaguar, and Hyundai. Waymo’s strategy allows it to leverage established manufacturing and supply chain expertise.

Zoox is venturing independently, reflecting co-founder Tim Kentley-Klay’s vision. Kentley-Klay, drawing from his marketing background, initially researched autonomous vehicles through independent interviews and market surveys.

Kentley-Klay partnered with Levinson, who contributed technical expertise in self-driving technology from Stanford University. Levinson’s father is Apple board chair and former Genentech CEO Arthur Levinson.

Kentley-Klay and Levinson opted to construct a completely new vehicle, diverging from the practice of retrofitting conventional cars with autonomous capabilities. In 2016, Neel Mehta, a former Morgan Stanley autos analyst, joined Zoox during its stealth mode phase.

“If you have a fully autonomous vehicle, then why do you need a steering wheel?” Mehta, who oversaw corporate strategy and other crucial functions, explained.

The development process was extensive.

Instead of incorporating sensors and software into existing models, Zoox employed 3D printing to fabricate entirely new components. While challenges emerged and alternative approaches were proposed, the co-founders remained steadfast in their original vision, according to sources with knowledge of the matter.

Kentley-Klay was ultimately ousted in 2018. In early 2019, Zoox appointed Evans as CEO. Evans, a seasoned Intel executive since 2006, brought a wealth of experience in technology and management to the role.

“I had a job. Life was good, and I had lots of other opportunities,” Evans said. “This was a choice, a very deliberate choice, and Jesse was part of that choice.”

Evans’ management style proved to be more corporate and structured compared to her predecessor. However, this structure facilitated improved organizational skills, contributing to the company’s maturation. These shifts marked a potentially critical phase in Zoox’s evolution from a startup to a mature contender.

Evans stated that her objective was to create synergy among Zoox’s experts in computing, cloud technology, and robotics.

“It’s a big vision – you’re not going to get there overnight,” she said. “So it was, how do we break it down? What things do we have to prove? In what order?” This strategic approach helped to provide focus to a complex undertaking.

Within Amazon, Zoox operates under the devices and services business, helmed by former Microsoft executive Panos Panay. This division encompasses a diverse portfolio, ranging from Alexa and Kindle to Project Kuiper.

Zoox has operated as a largely independent subsidiary within Amazon, maintaining its leadership team. This autonomy contrasts with other Amazon acquisitions, such as Whole Foods, One Medical, and PillPack, where significant personnel changes transpired post-acquisition. The specific reasons behind this management continuity are likely varied, but could possibly be due to the long-term nature of the project.

“It’s been 5½ years, so we’re way past the dating period,” Evans remarked. “Their expectations are quite reasonable. Do what you say you’re going to do, and when you do it, great.”

Amazon leadership continues to monitor the Zoox initiative closely.

Amazon CEO Andy Jassy and other high-ranking executives visited Zoox headquarters in July in celebration of the company’s anniversary. The atmosphere was positive, and Jassy acknowledged Zoox’s successes.

Prior to the public launch, Zoox had been rigorously evaluating its technology in Las Vegas since 2019. Robotaxi testing commenced in 2023, and demo rides became available at Resorts World in late July.

Las Vegas was selected due to its high concentration of tourists near the Strip and the ability to access the airport without navigating highways.

Russell James, an early tester, said he has experience riding in Waymos when he’s home in San Francisco, preferring the privacy of a driverless car.

“It does what you want it to do,” he said. “It picks you up and gets you where you want to go.”

During a trip to Las Vegas in June, James accepted an offer to ride in a Zoox.

There were minor complications.

The initial vehicle summoned was not fully charged, and another three were requested before a vehicle with sufficient battery power was found. During CNBC’s visit to Las Vegas, all vehicles arriving to pick up passengers were sufficiently charged.

James mentioned he appreciated the spaciousness of the vehicle.

“I usually have to scrunch my head down,” he said. “There was none of that.”

James compared the experience to “trams that take you between terminals at an airport.” This is in line with the goal of the robotaxis providing accessible and reliable transport.

However, not all Zoox rides were uneventful.

In April, an unoccupied Zoox vehicle in Las Vegas collided with a car. This incident lead to further internal re-evaluation of safety protocols.

The crash was minor, and no injuries were reported. However, Zoox revised its software to better address this case. Zoox voluntary recalled 270 vehicles to address software related to predicting other driver’s actions.

Zoox issued another software recall shortly after when an e-scooter rider hit a robotaxi in San Francisco.
The robotaxi was stopped before making a turn.

“We’re happy to admit that we’re not perfect, and so anytime we find opportunities to improve our software, we take those opportunities,” Levinson said.

Safety has been a central issue in the robotaxi industry since its inception.

Historically, there have been significant safety challenges within this space. For instance, prior to Uber suspending its driverless vehicle division, one of their test cars hit and killed a pedestrian in Tempe, Arizona, in 2018. Furthermore, General Motors halted its funding of the Cruise division in December following a serious safety incident in San Francisco involving a pedestrian.

“Our bar is not being perfect. It’s being significantly safer than a human,” Levinson said. “Our safety record so far is very much consistent with being significantly safer than humans.”

Levinson said Zoox is starting out with free rides to generate public interest.

“Obviously we have a path to do that or else it wouldn’t make sense for Zoox to exist,” said Levinson. In terms of timing for profitability, Levinson said, it’s “not weeks from now, it’s not decades from now. So somewhere in between.” This may point to potentially long investment timelines and the need to prove out the economic model for the project.

A central priority is the ability to scale. Earlier this year, Zoox inaugurated a manufacturing facility in Hayward, California. This factory in located within close proximity to their headquarters. The company projects a significant increase in scale with the factory.

The site is producing one vehicle per day and will make roughly three robotaxis per hour or about 10,000 each year once fully operational. Waymo has more than 2,000 vehicles in its fleet.

According to Sam Abuelsamid, vice president of Telemetry market research, the significant expense of constructing and maintaining a robotaxi service makes profitability unlikely before 2030, or later.

Amazon maintains plans to be extremely patient with this project since the initial acquisition. Amazon has allocated billions of dollars to supporting Zoox.

“One of the things that I feel Amazon doesn’t get enough credit for is that it’s very good at picking some long-term big bets and actually making them happen,” Evans stated. “We’re setting out to show that, yes, this is real, and it’s coming to you.”