They’re finally here. Paid driverless taxis got the green light last week from California regulators. Soon, Waymo and Cruise will start charging San Francisco passengers for rides in a car with no driver, at any time of day or night.

It’s easy to forget how far-fetched this would have seemed even a few years ago, when Uber Technologies Inc. sold off its embattled self-driving unit and most autonomous cars struggled to make left turns. But gradually, General Motors Co.’s Cruise and Alphabet Inc.’s Waymo and built out their self-driving fleets in San Francisco. Previously, the companies could offer driverless rides for free across the city, but only Cruise could charge for rides and under limited circumstances.

Now, both companies will be able to offer self-driving taxis 24/7 to the paying public, clearing the way to make robotaxis a real business. Though many hurdles remain to mass adoption, the City by the Bay will soon become a test case for a new kind of transportation business model.

In an interview with Bloomberg Television, Cruise Chief Executive Officer Kyle Vogt spoke of the development in lofty terms: “It’s a signal for California that we are going to prioritize progress, versus accepting the tragedy of the status quo on our roads today.”

For those looking for a ride, Waymo says it will start charging for trips in the coming weeks. The company will also begin accepting more riders from its waitlist, which now stretches beyond 100,000. The pricing will be competitive with ride-hail services, it said.

Cruise plans to initially charge for rides between 9 p.m. and 5:30 a.m. across the city (it previously charged for rides only in certain areas). Cruise’s waitlist also stretches into the tens of thousands.

The expansion of robotaxis will add fuel to the debate on how cities need to evolve to cope with mixed traffic. Waymo and Cruise both have hundreds of self-driving cars in operation, and each has emphasized that expansion should be incremental, slow and careful.

There’s reason for both hope and caution. Analysts at BloombergNEF found that in California the vast majority of collisions involving an autonomous vehicle appear not to have been the robotaxi’s fault. Rear-ended collisions were quite common. No human injuries or property damage were reported in 90% of the collisions that occurred while the AV was in self-driving mode.

Still, some people who testified at the public hearing prior to the vote raised concerns about the volume of robotaxis on streets and many labeled the little electric cars as a nuisance. The Teamsters Union, which represents drivers across industries, characterized regulators’ decision as “complete disregard for public safety.”

One statistic does needs to improve: The number of injuries per mile traveled by autonomous vehicles in California is four times higher than the national human average, according to BloombergNEF analysis. However, the sample size is small and the cars drive almost entirely in cities, where collisions are more likely.

For now, the California decision will be viewed as a major milestone for driverless vehicles. It’s also notable that it happened in San Francisco, which has a well-worn reputation for exporting innovation to the rest of the world. As a city resident, I’ve been enjoying riding in Waymos and Cruises for months. One day, maybe the rest of the world will, too. —Ed Ludlow Bloomberg

Microsoft on Tuesday reported fiscal fourth-quarter profit of US$20.1 billion, or US$2.69 per share, beating analyst expectations for US$2.55 per share. It posted revenue of US$56.2 billion in the April-June period, up eight per cent from last year. Analysts had been looking for revenue of US$55.49 billion, according to FactSet Research. CEO Satya Nadella said the company remains focused on “leading the new AI platform shift”. “Organisations are asking not only how — but how fast — they can apply this next generation of AI to address the biggest opportunities and challenges they face, safely and responsibly,” he said in a prepared statement.

Alphabet Inc. shares jumped more than 7% in late trading after the Google parent reported revenue that beat analysts’ expectations. Alphabet revenues were boosted by advertising on the company’s flagship search business, which is withstanding new competition from artificial intelligence chatbots. It has also weathered an ad slowdown that affected social media companies in recent quarters.

Elon Musk explained his decision to strip Twitter of its famous blue bird logo as a move to remake the business into a broad platform for communications and financial transactions.

Texas Instruments, the biggest maker of analog semiconductors, gave lukewarm earnings forecast for the current period, indicating that a slump in demand for key types of electronics is dragging on.

iRobot’s stock tumbled after Amazon said it’s paying less to acquire the Roomba maker to account for fresh financing taken out by the company as a merger review drags on.

Amid a ramp up in rhetoric from Beijing to bolster business confidence as economic growth wanes, China has stepped up its support for the yuan, and is also mulling mortgage easing to spur homebuying in big cities. The yuan jumped after China set a stronger-than-expected reference rate and a change to its capital curbs to lure inflows. Authorities are also considering loosening home buying restrictions in the nation’s biggest cities, potentially removing a hurdle that has curbed demand in Beijing and Shanghai for years, according to people familiar with the matter. Meanwhile, billionaires are showing their support behind this private sector push, with Tencent co-founder Pony Ma penning a lengthy op-ed backing Chinese pledges to resuscitate the private sector.

Bloomberg

Goldman Sachs Group’s profit plunged as the Wall Street giant notched one of its weakest quarters under Chief Executive Officer David Solomon. Second-quarter earnings fell a whopping 58% on an investment-banking slump, real estate markdowns and a goodwill writedown in its consumer business. Return on equity, a key measure of profitability, slid to 4%—the worst among the top US banks. The firm had been actively tamping down expectations heading into the report, prompting analysts to slash their estimates for quarterly profit by almost half since mid-June.

Solomon said the mergers and capital-markets business is “a fundamental part of our economy” that isn’t going to disappear, even though it’s been depressed for several quarters. “I think this is a cycle,” the CEO said. Sandy Pomeroy, a money manager at Neuberger Berman Group, had this take on the cyclical theme: “They need to come out and articulate some confidence that we are at the bottom from a cyclical perspective and that they’ve cleaned up all of their problems.” — David E. Rovella Bloomberg

Earnings reports from tech giants Tesla and Netflix disappointed yesterday. Tesla Inc. shares dropped in early trading after the carmaker warned of more hits to its already-shrinking profitability. CEO Elon Musk said Tesla will have to keep lowering the prices of its electric vehicles if interest rates continue to rise. Months of markdowns have already taken a toll on automotive gross margin, which fell to a four-year low in the second quarter.

Similarly, Netflix Inc. projected third-quarter revenue fell short of Wall Street estimates, suggesting a crackdown on password sharing and a new advertising tier aren’t yet delivering the sales growth analysts anticipated. Shares were down as much as 10% to $430.41 in extended trading late Wednesday. The crackdown that pays. Netflix added 5.89 million customers in the second quarter of the year, more than doubling Wall Street estimates after cracking down on people who share passwords. The results announced Wednesday mark the company’s best second quarter since the depths of the pandemic three years ago and far surpass Wall Street forecasts of 2.07 million new subscribers.

Microsoft’s artificial intelligence-driven rally has pushed its stock to new highs and nudged CEO Satya Nadella’s total windfall from the company above $1 billion. Nadella’s boon includes all payouts he has collected from Microsoft that can be parsed from regulatory filings: equity grants, salary, bonuses and dividends. It’s underpinned by Microsoft shares returning more than 1,000% since his first day in the top job.

Taiwan Semiconductor Manufacturing Co. cut its annual outlook for revenue and postponed the start of production at its signature Arizona project to 2025, twin setbacks for a chipmaking linchpin struggling with geopolitical tensions and a deep market slump. TSMC’s surprise cut in 2023 revenue projections sent a warning to investors that the global electronics slump may persist for some time despite a boom in AI development. And the delay in the US — a consequence of both a lack of skilled American workers and ballooning costs — underscores the difficulties in making chips there despite Washington’s insistence to reduce a global reliance on Asian facilities.

Apple is quietly working on AI tools that could challenge those of OpenAI, Google and others, but the company has yet to devise a clear strategy for releasing the technology to consumers. In recent months, the AI push is said to have become a major effort for Apple, with several teams collaborating on the project.

Next week, earnings for the biggest tech companies begin. Some things they’ll be required to spell out clearly — their profit and loss, for instance. But Wall Street is going to be looking for any way to read tea leaves on future strategy, to adjust their predictions for corporate performance.

Source: Bloomberg