They have the money to do so, and investors are aware that it is a long term play. Waymo is already dominating the market for all intents and purposes.

Are they losing money on a per-ride basis? I assumed they had large R&D costs, but that each ride would be near break even.

It's the Uber model. Operate at a subsidized low price, create stickiness, push out the previous generation, enshittify and raise the price, $$$.

I don't think Waymo needs to dominate the market to succeed. They just need to scale up (time)x(number of vehicles) enough to amortize the R&D costs of the self driving capability. Paying a driver is a big chunk of a taxi/Uber's costs, so eliminating that leaves a lot of room to maneuver.

Waymo now generates more than $350M in annual recurring revenue, says https://ideas.darden.virginia.edu/waymo-fully-autonomous-fut..., and quotes $130-150k per car.

So one year of revenue buys ~2500 cars at those prices, which is roughly the size of their fleet (~3000 according to Wikipedia). It seems plausible that newer cars will be cheaper as designs get optimized, economies of scale hit and what used to be really expensive cutting-edge hardware becomes commoditized and goes down in cost over time.

They certainly also need support including contractors that assist cars that get need human input, maintenance etc. and the electricity for the cars isn't free either, but just based on these numbers, it sounds like they are likely close to being profitable if you ignore R&D.

If you assume $10 a ride, and a car giving 3 rides an hour for 12 hours a day, that's $360 in revenue per car per day, close to the $320 you'd get from $350M/3000/365. That means each car pays for itself in about a year (ignoring all other costs, of course).

Based on this and the assumption that cars last for more than 2 years, I'd guess that Waymo is only "unprofitable" (not sure how this works in accounting terms) due to ongoing R&D and expansions and there really isn't much more to "subsidize".

How is the revenue recurring? They offer a subscription?

I don't believe Google breaks it down but everyone assumes Waymo accounts for roughly 50% of $7.52B in "other bets" losses. And that's just 2025, losses in Q4 2025 are almost 2x Q4 2024. Cost factors are improving but they continue to shovel money into the R&D furnace.

I bet they've hit operating breakeven a couple years ago. If they hadn't they wouldn't have been expanding. Expanding while you have an operating loss means the loss would be expanding alongside the service. I'm not seeing that in the numbers.