Alphabet-owned Waymo partners with Walmart

Waymo has a new partnership with Walmart that may just look like a deal to put more self-driving cars on the road. But in the words of Jafar from Aladin, things are not always what they seem.

Waymo, a subsidiary of Google parent company Alphabet, has struck an agreement with Walmart and four other national retailers for a test program in the Phoenix, AZ area, according to CNBC. 

Other retailers include the car rental company Avis, car repair company AutoNation, the Element Hotel, and a national shopping center real estate company called DDR Corp. It will offer customers who patronize those businesses rides to and from in its autonomous vehicles. And since all of these chains are national, these partnerships have the potential to expand beyond Phoenix.

Since this is a limited test program restricted to about 400 people, the rides will be free of charge to customers — with “some or all of the cost” paid for by partner retailers. Waymo stressed to Mashable that providing rides in autonomous vehicles is something these retailers actively want for their customers; so much so that they’re subsidizing the rides.

With this partnership, Waymo is testing out and acclimating riders to self-driving cars. But its partnership with Walmart is a particularly interesting one thanks to its emphasis on… grocery shopping. 

Customers who decide to use Waymo rides will also get a discount on groceries when they place orders on Walmart.com. Waymo cars will transport customers to Walmart, where they’ll simply pick up their pre-ordered and paid for groceries, and head home via robot chauffeur. Walmart is expanding its grocery delivery service to 800 stores by the end of the year, and now it looks like Waymo could play a role in that.

That’s important because it indicates that Walmart and Alphabet are solidifying their alliance, as both companies wage war with the ever-expanding Amazon. Waymo said that it struck this deal independent from Alphabet, and without regard for the larger business interests of their parent company. 

But even if Waymo isn’t thinking about its parent company’s overarching business battles, Walmart is certainly on the offensive. Alliances with tech companies — including Waymo and Alphabet — will help give it an edge in its fight to keep its grocery dominance from Amazon. Amazon has been snatching customers in the grocery space with its now Prime-enabled (and discounted) delivery from Amazon-owned Whole Foods. Groceries are what propelled Walmart to its mega-status in the first place, so it has a huge interest in fighting tooth and nail to keep that dominance from Amazon’s clutches.

This isn’t the first time that Walmart has formed alliances with tech companies. Google and Walmart have already established a partnership in the online shopping and grocery spaces. Additionally, earlier this month, Walmart announced a 5-year long partnership with Microsoft. It will transition its operations onto Microsoft’s cloud-based system, effectively making Walmart stores smart, and centralizing management on a cloud-based platform. That move will help strengthen its online shopping capabilities, as well as potentially set it up to compete with Amazon’s cashier-less Go stores.

There are no tanks or drones in this war (ok, maybe there are drones). But there are definitely self-driving cars.