Despite a tumultuous year for robotaxis, Waymo has quietly built a thriving business, amassing an impressive 5 million driverless trips, with a staggering 4 million of those taking place in 2024 alone. This significant milestone underscores the company's substantial lead in the autonomous vehicle industry, leaving its rivals struggling to keep up.

Waymo's remarkable growth is attributed to its operations in three key markets: Phoenix, San Francisco, and Los Angeles. The company's service area, although relatively small, is expanding, covering a cumulative 500 square miles across its main cities, as well as Austin, where it operates with a waitlist. Waymo has also announced plans to launch in Atlanta and Miami, with testing underway in Japan.

The company's achievements are not limited to the number of trips. Waymo riders have spent a cumulative 11 million hours in its autonomous vehicles, resulting in the avoidance of over 6 million kilograms of CO2 emissions. This environmental benefit is a direct result of the company's switch to electric vehicles only.

To celebrate this milestone, Waymo is offering its customers a personalized "Year in Review" through its Waymo One app, providing users with their own stats, including miles traveled, emissions avoided, favorite destinations, and more. The most popular destinations in each city this year were Sky Harbor International Airport in Phoenix, the Ferry Building in San Francisco, and The Grove shopping center in LA.

The fact that Waymo has facilitated 4 million trips in three cities, while only serving one airport, is a testament to the company's future prospects as its technology continues to mature. Airports are a significant source of revenue for human-powered ride-hail companies like Uber and Lyft, and Waymo's early mover advantage in this space could prove crucial.

However, Waymo is not immune to the challenges facing the autonomous vehicle industry. The company faces an uncertain future with mounting regulatory and financial pressures. Tariffs on Chinese vehicles and software could hinder its growth plans, and President-elect Donald Trump's desire for a regulatory framework for AVs adds to the uncertainty. Additionally, lowering costs will become increasingly important for Waymo as it expands to new cities.

Alphabet, Waymo's parent company, does not break out the robotaxi company's costs in its earnings report, but its "Other Bets" unit, which includes Waymo, brought in $388 million in revenue in the third quarter of 2024, up from $297 million a year ago. The unit's losses decreased slightly to $1.12 billion from $1.94 billion in the year-earlier period. Alphabet recently led a $5.6 billion funding round for Waymo to help it cover costs as it eyes its next phase of growth.

As Waymo continues to grow, pricing will become a significant challenge. The company has settled into the "premium" tier of ride-hail services, similar to Uber Black, with its retrofitted Jaguar I-Pace vehicles costing a substantial amount to equip with the necessary sensors and hardware. The 175,000 trips a week that Waymo is currently doing are not enough to recoup these costs.

Expanding the types of services it provides will also be crucial for Waymo's future success. Currently, the company only offers trips to one airport, in Phoenix, and will need to expand its services in its current and future markets to remain a viable mobility option. Additionally, Waymo will need to become more comfortable riding on the highway, which it only does in limited cases.

Safety is another significant hurdle for Waymo. While the company has published studies indicating its vehicles are safer than human drivers, lingering questions around passenger safety remain. Waymo vehicles have been targeted for harassment and vandalism, and they have occasionally come into conflict with emergency vehicles.

Despite these challenges, Waymo's novelty and customer satisfaction may be enough to propel the company to another successful year in 2025. The company's ability to customize rides, allowing users to play their own music and set the temperature to their liking, has earned it high marks from customers. As the autonomous vehicle industry continues to evolve, Waymo's early mover advantage and commitment to innovation may prove decisive in the long run.