Although Waymo’s self-driving car is advancing technologically, it still requires a safety driver. The driver increases the cost of each ride, which makes the earnings model dull. Weaker cashflows prompted Morgan Stanley to cut Waymo’s valuation from $175 billion to $105 billion.

Morgan Stanley’s analyst said, “Over the past year, there have been a series of hurdles relating to the commercialization and advancement of autonomous driving technology. Most notably, we underestimated how long safety drivers are likely to be present within cars and the timing of the rollout of autonomous ride-sharing services.”

However, Waymo is making great strides in the autonomous vehicle industry. The company launched its ride-sharing services in Phoenix City and Silicon Valley. Waymo has completed over 10,000 rides in these locations. Most of the passengers gave the company the best rating.

In July, California regulators approved Waymo to carry passengers in its self-driving taxis. Waymo was approved to join the Autonomous Vehicle Passenger Service Pilot program in California—a big step towards commercialization.