Former auto executive John Krafcik to head new unit called Waymo

Google’s self-driving car project on Tuesday got an official name, Waymo LLC, and became a stand-alone business unit within the Alphabet Inc. empire, signaling that the effort will soon be expected to generate revenue.

The Mountain View, Calif., tech giant showed new willingness to work with partners to put its autonomous-driving technology in typical vehicles, indicating it isn’t totally wedded to developing futuristic cars without steering wheels and brake pedals.

“We are a self-driving technology company … not a car company,” said Waymo Chief Executive John Krafcik, an auto-industry veteran who has led Alphabet’s driverless-car project for the past year. “We’re not in the business of making better cars. We’re in the business of making better drivers.”

Waymo also hinted that tests with members of the public could be coming soon. On its website, the company said its next step “will be to let people trial fully self-driving cars to do everyday things like run errands or commute to work.”

Alphabet executives had said they expected the self-driving car project to graduate from the company’s research lab, X, where it had been shielded from commercial demands.

The move suggests the technology is becoming commercially viable. However, Mr. Krafcik didn’t explain how Waymo would generate revenue beyond saying he saw opportunities in ride sharing, transportation logistics and trucking, as well as licensing technology to other auto makers. And, while the unit will be expected to generate revenue before long, it is unlikely to face pressure to turn a profit at first.

The company’s high-profile work on autonomous cars, along with developments by Tesla Motors Inc. and other technology companies, promises a world of safer roads, less congestion and greater mobility for disabled and elderly people. At the same time, it has put traditional car and truck makers on alert that they could lose their dominant position.

Ford Motor Co., BMW AG, Toyota Motor Corp. and others are developing similar technology, pushing to put autonomous vehicles on roadways by 2021. General Motors Co. acquired San Francisco-startup Cruise Automation earlier this year in a deal valued at $1 billion to help jump start its self-driving car program. Recent Tesla vehicles come with hardware that could be activated by a forthcoming software revision that would make the cars fully self-driving, the company has said.

Increasingly, companies developing self-driving technology believe that autonomous cars initially will be used as robot taxis, in part to introduce them to a wary public.

Uber Technologies Inc. is testing self-driving taxis in Pittsburgh, and startup nuTonomy is testing such vehicles in Singapore.

Still many regulatory and legal hurdles lie ahead. U.S. regulators are taking steps toward regulating the emerging technology, proposing guidelines earlier this year to encourage development while ensuring safety.

Regulators are looking into a fatal Tesla crash this year that involved the company’s Autopilot feature, a semiautonomous capability that can take command of the vehicle in certain situations. German regulators have asked the company not to use the feature’s name on the grounds that it is misleading.

Alphabet has advocated cars without traditional controls, arguing that eliminating the option of human control is safer than requiring people to take control if the car encounters a situation it doesn’t understand.

Waymo has tested prototype vehicles that lack a steering wheel and brake pedals, and Mr. Krafcik said the company is lobbying regulators to allow cars without such controls. Meanwhile, he said Waymo likely would install its technology in conventional vehicles as federal rules require controls such as steering wheels.

“We’re not in the business of making better cars, we’re in the business of making better drivers,” Mr. Krafcik said.

Mr. Krafcik said the Waymo name stands for “a new way forward in mobility.”

Waymo is Alphabet’s 12th business unit—alongside Google, home-automation firm Nest, venture funds GV and CapitalG, and others—each with its own effective CEO. The unit claims extensive experience developing self-driving technology, including more than 2 million miles of testing on public roadways in the past eight years.

At a press event Tuesday, Mr. Krafcik touted the company as the first to test a self-driving car on public roads without a human driver in the vehicle. Steve Mahan, a legally blind man from Morgan Hill, Calif., in October 2015 rode around Austin, Texas, in a Waymo car that lacked a steering wheel and brake pedals.

“It was so much fun to be driving down these streets, past homes and folks in the neighborhood, coming to intersections…left turns, right turns, lane changes,” Mr. Mahan told reporters. “I just don’t want that to be the overall end of the ride.”