Alphabet's Self-Driving Car Project Gets A New Director

Alphabet Inc. (NASDAQ:GOOGL) is strengthening its efforts toward commercialization of its self-driving cars as evident from the appointment of Airbnb top executive Shaun Stewart as a director of the project.

The appointment comes on the heels of the departure of chief technical officer of the project, Chris Urmson.

About Shaun Stewart

Stewart is an experienced technology executive who has successfully headed the establishment of Airbnb’s vacation rental business. Before joining Airbnb, he served as chief executive of Jetsetter.

He will resign from the position of Airbnb’s global head of vacation rentals to take up his new role at Google. Google will leverage Stewart’s expertise to speed up the commercialization process, which it targets to complete by 2020.

Recent Efforts

Recently, the company appointed Kevin Vosen as the first general counsel and full time chief legal officer of its self-driving car division. Vosen had served as the chief legal officer at an environmental analysis firm, The Climate Corporation, a unit of Monsanto (NYSE:MON) Co.

This appointment raises the possibility of the conversion of the unit to a company, going forward. It could also be a step toward addressing the regulatory issues that might crop up as Google intensifies its efforts toward developing commercial autonomous cars.

The Journey So Far

Alphabet, then Google, took the automobile industry by storm in 2010 when it unveiled a fully operational driverless car that drove around its Silicon Valley headquarters. Following this event, both automobile and tech companies started competing against each other to develop the technology.

The driverless car project is an integral part of Alphabet’s X labs, which was formed to test some of the most advanced ideas of the company. So far, Google’s self-driving vehicles have driven more than 1.7 million miles in California, Arizona, Texas and Washington.

In May, Google entered into a partnership with Fiat Chrysler Automobiles N.V. (NYSE:FCAU) to incorporate its self-driving technology into 100 Chrysler Pacifica minivans to be used as test vehicles. It has opened an automotive development facility in Novi, MI.

However, the road to success isn’t without obstructions. Google’s self-driving cars have met with accidents several times, thereby raising regulators’ concerns.

On Feb 14, a Google self-driving car struck a municipal bus while changing lanes in Mountain View. The company took partial responsibility for this accident and said that it has updated its software after the crash to avoid such accidents in the future.

On sixteen other occasions, cars hit the self-driving vehicles and on one occasion a self driving-vehicle caused an accident when being manually operated by a Google employee.

Our Take

Google has been trying to bring its fully robotic car control mechanism to market by forming alliances with car manufacturers. However, the current regulatory environment doesn’t support fully automated cars, so there is some hesitation on their part. The rollout of a fully driverless car may take longer than expected, thereby delaying one of Alphabet’s longest-running research projects.

Zacks Rank

Currently, Alphabet has a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering are Facebook, Inc. (NASDAQ:FB) and LinkedIn Corporation (NYSE:LNKD) , each carrying a Zacks Rank #1 (Strong Buy).