The Waymo CEO’s departure comes after a tenure stuffed with milestones, hurdles and hype

After five and a half years as head of Waymo, John Krafcik announced on Friday that he was stepping down from his position and leaving the company with two co-CEOs, Tekedra Mawakana and Dmitri Dolgov.

Krafcik has overseen the company’s biggest milestones, renaming to Waymo, partnerships, and borrowing while running the craze through the ranks. But Krafcik’s departure signals a long and arduous reality check for the early hype and hope of scaling self-driving vehicles.

“If you look at the past year and a half, almost every company in autonomous vehicle development has increasingly realized that this is a much more difficult problem than we thought,” Sam Abuelsamid, principal analyst at Guidehouse Insights, told CNBC Friday. “It wasn’t long ago that people projected that we would have robot axes everywhere by 2020. That didn’t turn out to be very clear.”

Abuelsamid said Krafcik’s connections and experience in the automotive industry – he was formerly president and CEO of Hyundai Motor America – helped Waymo form critical partnerships with automakers like Fiat Chrysler and Volvo.

In 2020, the more than 10-year-old company received its first external funding round – a $ 2.25 billion funding round led by Silicon Valley investment firms such as Silver Lake. Then another $ 750 million was raised. He also oversaw the launch of a local delivery service with freight partners called Waymo Via, and recently launched its first fully self-driving car service that some Phoenix, Arizona residents can order.

Krafcik took over the helm in 2015 and led Waymo to an industrial consortium in 2016 to accelerate self-driving cars. Alphabet became a founding member of the Self-Driving Coalition for Safer Streets, which included Argo AI, Aurora, Cruise, Ford, Uber, Volvo and Zoox.

Krafcik knows the business and backend of scaling cars and hasn’t strayed from reality. Even less in recent years.

Close-up of a self-driving minivan with LIDAR and other sensor units and logo visible, part of Google parent company Alphabet Inc, driving safely past a historic train station with a sign saying Mountain View in the town of Mountain View in California’s Silicon Valley. October 2018.

Smith Collection / Gado | Stock photos | Getty Images

Under Alphabet’s “Other Bets” umbrella, the company has consistently bled money, which has been less accepted since Ruth Porat joined the company as CFO and tightened its purses. The Other Betting segment posted an operating loss of $ 4.48 billion in 2020. That’s an increase of $ 2.03 billion in 2019. Covid has also weighed on operations as CNBC recently discovered that Waymo wasn’t sure it could afford to keep paying some workers in the pandemic.

Krafcik’s departure precedes expected federal regulations in the US for self-driving cars.

The National Transportation Safety Board recently asked its sister agency, the National Highway Traffic Safety Administration, to set stricter standards for automated vehicle technology. The NHTSA asked the public for comments before the proposed rules were set and closed the comment deadline on April 1st.

Krafcik is aware of what this is about.

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 “the world, the cities we perform in and the regulators that do.” regulate these cities, make sure Understand our technology. ”

However, Krafcik was no stranger to those who overwritten the reality of when self-driving cars would be available. Waymo and Krafcik assured the press and the public that the technology was readily available and dates back to 2012, when it was still known as Google’s self-driving car project.

Krafcik said in 2017 that it wouldn’t have to wait until 2020 – when analysts expected self-driving cars to be completely autonomous – but that it would give drivers the ability to do so within “months”.

“Fully self-driving 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. “It won’t happen in 2020, it will happen today.”

What he didn’t explain at the time was how early the testing was and what hurdles it still had to face.

In recent years, the company has started to recall its enthusiastic tone as it fell short of its original timeline to bring fully self-driving cars to the road.

In 2019, CNBC coverage found that Waymo still relied largely on human safety drivers and still needed a decent level of community buy-in. Shortly thereafter, Morgan Stanley cut Waymo’s valuation 40% from $ 175 billion to $ 105 billion and underestimated the company’s heavy reliance on human drivers.

In 2019, Waymos Chief Operating Officer and now the new CEO Tekedra Mawakana said at a conference that the hype surrounding its self-driving cars had become “unmanageable”.

That year, Krafcik began tempering the rhetoric a bit and pouring cooler water on the subject at a 2019 National Governors Association meeting. Towards the end of the year, the company consolidated its Detroit and Phoenix operations and closed its Austin, Texas facility, which affected approximately 100 employees, according to CNBC.

With more than 20 million kilometers driven on public roads and 20 billion miles driven in simulation, Waymo leads other companies in self-drive technology. But it still has a long way to go if it is to scale, even if Krafcik helped push it further.

“I think maybe he saw this as a good time to step aside,” said Abuelsamid. “He put the company on the right track. And maybe he’s just tired of the fight and wants to do something different for a while.”

Krafcik did not respond to the request for comment.

Lora Kolodny from CNBC contributed to this article.

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