Waymo CEO John Krafcik explains why systems like Tesla's Autopilot could be a 'big problem' (GOOGL)

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Waymo CEO John Krafcik shared on Wednesday why the self-driving-car company has steered clear of driver-assistance tools at Bloomberg's Tech Conference.

Waymo, a Google spinoff, is pursuing level 4 self-driving cars, meaning the vehicles can drive without any human intervention in select locations. That strategy has reportedly had its drawbacks; in 2016, several top executives left the program for companies looking to bring the tech to market faster by building semi-autonomous systems.

But Krafcik said that there's a "fundamental conundrum" for companies putting driver-assistance tools on the market: how do you get people to pay attention?

"If at some point the car needs to ask the human to pay attention... that could be a big problem," he said. "It's one of the reasons we pivoted Waymo to a full self-driving solution."

Level 2 autonomous systems, like Tesla Autopilot, can handle some driving tasks but still require a driver to pay attention and sometimes take back control of the car.

Tesla's Autopilot, introduced in October 2015, was the focus of intense scrutiny when it was disclosed in July 2016 that a driver was using the technology when he crashed into a semi-truck and died. The NTSB, an independent government investigative agency, said Tuesday that Autopilot contributed to the crash because it allowed the driver, Joshua Brown, to avoid steering or watching the road for long periods of time.

Google conducted an experiment in 2012 where it asked employees to ride in its self-driving cars, informing them that they had to pay attention to the road and be prepared to take over. (Waymo was still a self-driving-car unit run by Google in 2012.)

Google ultimately ended the pilot early because employees repeatedly lost focus, Krafcik said.

"It’s the fundamental conundrum that we face in this space and we learned it at Google, prior to becoming Waymo, in 2012," he said.

Tesla unveiled improvements last September to its Autopilot software, adding new limits on hands-off driving that CEO Elon Musk has said would most likely have prevented the fatality in May.

While level 2 systems need human oversight, they do make cars safer. The National Highway Traffic Safety Administration found that crash rates for Tesla vehicles had dropped by 40% since Autopilot was first installed. NTHSA did not find Tesla Autopilot at fault for last year's fatal crash.

The first application of Waymo's self-driving tech will likely be in the ride-hailing space and trucking industry, Krafcik said, declining to provide a specific timeline for commercialization. Waymo is currently conducting public trials in Phoenix, Arizona.

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