In the race to turn robot taxis into a business, the country's largest auto maker and a young rival upstart have taken to the streets here, believing the hilly city will help them catch up to Google parent Alphabet Inc.
On Tuesday, General Motors Co., for the first time since acquiring driverless-car software company Cruise Automation, demonstrated its autonomous Chevrolet Bolt electric cars to journalists with test rides.
Separately, Zoox allowed The Wall Street Journal in one of its vehicles for the same sort of ride the startup is giving investors as it seeks to raise as much as $500 million in funding, according to people familiar with the matter. Zoox, founded in 2014, is pushing for a valuation of at least $3 billion, these people say, compared with last year's $1.55 billion value.
The efforts by two competitors to build up their driving abilities in a busy city center mark a different path than Alphabet's Waymo, which drove millions of miles on public roads, many in Mountain View, Calif., before picking suburban Phoenix to scale up its initial deployment. There, Waymo is testing the first fleet of vehicles without humans behind the wheel, and it plans to soon begin giving rides to non-company employees.
The Phoenix metro area has arguably better weather than San Francisco for the sensitive sensors and less complex driving scenarios. Arizona also allows for testing of fully driverless technology, while California still requires a safety operator in the car, a rule on track to change next year under proposed regulations.
GM and Zoox, which both have safety operators in their cars, believe San Francisco is best suited for the initial deployment of autonomous vehicles in confined urban environments for so-called mobility services, similar to Uber Technologies Inc.'s ride-hailing app but with robot cars. Uber is operating more than a dozen self-driving cars in San Francisco, though it isn't ferrying passengers as it does in Pittsburgh.
"One minute of driving in a place like San Francisco is equivalent to an hour or more in a less denser suburban environment," Kyle Vogt, head of Cruise, told reporters.
GM's strategy is centered around bringing the fully driverless technology to market as quickly and as safely as possible, rather than first launching a ride-hailing service with humans behind the wheel, Mr. Vogt said. The company hasn't begun testing its vehicles without human safety operators on public roads, he said in an interview.
Zoox has ambitious plans to create a robot vehicle from the ground up, creating a lounge-like space for traveling initially in urban environments. The service would be summoned by smartphone.
During Tuesday's demonstration, the Cruise car wasn't as smooth or as advanced as Waymo's demonstration last month on a closed course that involved no humans in the front seats.
But Cruise--founded in 2013 and acquired by GM last year in a deal potentially valued at more than $1 billion--demonstrated cars navigating more complex driving scenarios than those shown by many developers.
During one of the four routes offered, for example, the Cruise vehicle traveled at low speeds for about 20 minutes as it wound its way through an industrial part of the city full of hills, cars parked along the roadways and delivery trucks making ill-timed stops.
The overall ride was hesitant at times, as if it had a cautious new driver. A few motorists lost patience with the Cruise vehicle--honking and aggressively passing--as the driverless car stopped behind double-parked vehicles or slowed through intersections.
GM executives said the cautiousness displayed during the demonstration underscores the company's priority for safety over comfort, which will be developed over time.
The safety operators in the Cruise and Zoox vehicles never needed to take control during the demos, unlike during a shorter trip a year ago in an Uber self-driving vehicle.
Zoox's converted Toyota sport-utility vehicle followed a route the company has taken several times for potential investors, beginning at an office in the city's busy Financial District, including a left-hand turn, handling jaywalkers and yielding for pedestrians at busy intersections.
The ride seemed smoother than in Cruise's car but Zook's demo was about a third of the distance and didn't include as many unusual driving scenarios.
Rolfe Winkler and Mike Colias contributed to this article.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
November 29, 2017 08:14 ET (13:14 GMT)