Alphabet Inc’s Google (GOOG, GOOGL) is often mentioned in the same breath with the likes of Tesla (TSLA) as one of the leaders in the driverless-car space. There’s a good reason for that — it is one of the leaders in the driverless-car space.
In fact, Google has been working diligently on self-driving cars since 2009, and has arguably made more progress in that field than any other company on the planet.
Google’s autonomous vehicles have been humming around California for years, and after logging about 1.5 million miles on the road, only one accident (a 2 MPH collision that harmed no one) has been chalked up to the driving software.
But Google isn’t just doing this for bragging rights or because it’s cool. It’s a public company, and GOOG is a publicly traded stock. It wants to commercialize its state-of-the-art technology, and that means it needs the legal leeway to take driverless cars mainstream.
With self-driving cars expected to be an $87 billion market by 2030, you can understand why Google, and GOOG stock owners, might be antsy to see government make room for a wider rollout.
Google’s Gotta Lobby
Lobbying on the part of private enterprise can often be a dirty, morally touchy area. When big companies lobby D.C. bigwigs to serve their own self interests, it raises uncomfortable questions: “Are private companies buying votes?” “Has America’s political system been corrupted?”
These are legitimate concerns. But they don’t apply to Google, not in this instance. Yes, Google is lobbying on behalf of its own interests, having invested massive sums of money and time in self-driving cars since 2009, but it’s also a shift that’s nearly inevitable at this point.
The leader of GOOG’s self-driving car project, Chris Urmson, is appearing before the Senate Commerce Committee on Tuesday, encouraging Congress to give the Transportation Department the authority to speed up the process that can get driverless cars on the road en masse.
Currently, the U.S. National Highway Traffic Safety Administration has safety rules in place that pose major roadblocks for driverless cars. As a recent Fortune article explained:
“The basic problem is that the standards are based on the assumption that vehicles would always have a steering wheel, foot pedals, or even a rear visibility. Regulators must now figure out how to certify a car that might have seats designed like a lounge and that may not even face forward.”
While these are indeed hurdles, it should be encouraging to GOOG stock owners that the company is taking concrete steps to make its far-fetched idea a reality.
After all, a 2014 research report by Lux Research estimated the self-driving car market would reach $87 billion by 2030. That’s the cumulative value of all parts of the market: carmakers, connectivity and apps, maps, software, wireless hardware and other categories are all included.
While automakers stand to make billions from the new-look vehicles, Lux figures that software companies are actually the biggest beneficiaries of the shift. By 2030, the driverless car software market alone will be worth $25 billion, Lux says, giving companies like GOOG and IBM (IBM) a lucrative new way to grow revenue.
Hopefully Google’s very public lobbying efforts will help those projections become a reality, sooner rather than later.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.