Uber and Waymo Team Up For Announcement—Are They Trying To Compete With Elon?

Uber and Waymo–bitter enemies turned awkwardly polite coworkers–just announced they were expanding their robotaxi partnership to two new cities: Austin, Texas and Atlanta, Georgia. The timing couldn’t be more interesting, with Elon Musk’s big Tesla robotaxi reveal coming up on October 10th. It's almost like they’re trying to steal some of the spotlight. 

Uber’s stock revved up by a cool 5.3% on this news, proving that investors are as excited as a kid in Chuck E Cheese. CEO Dara Khosrowshahi is practically giddy, proclaiming that riders in these new cities will soon experience the same "mobility magic" that Phoenix folks have enjoyed. This expansion means Waymo’s autonomous rides will soon be available exclusively through Uber’s app.

So, Waymo’s sleek, self-driving Jaguar I-PACE vehicles will be cruising around these new cities, but only via Uber’s app. Waymo’s own app, Waymo One, won’t be an option in Austin or Atlanta. Instead, if you want a robotaxi ride in these cities, you’ll need to use Uber. It’s a win-win: Waymo gets to tap into Uber’s massive user base, and Uber gets to offer a high-tech, autonomous option to its riders.

But before you start thinking Uber has this self-driving thing all figured out, let’s not forget Elon Musk’s shadow looming over this road trip. The Tesla overlord is planning to unveil his own robotaxi prototype on October 10th. That’s right, just a few weeks away, Tesla will show off its version of the self-driving future, and rumor has it, it’s going to be the automotive equivalent of the Super Bowl. But remember what Uber’s CEO said? 

Uber CEO Dara Khosrowshahi isn’t exactly buying into Elon Musk’s robotaxi vision. Musk’s plan is for Tesla owners to rent out their cars as autonomous cabs whenever they’re not using them, creating a whole fleet of privately owned self-driving taxis. Musk claims this could bring in up to $30,000 a year for Tesla owners. While it sounds like a sweet deal on paper, Khosrowshahi seems a bit skeptical. After all, turning your car into a part-time robotaxi might not be as seamless as it sounds.

Remember, Uber used to dream about building its own self-driving cars, but after a few major setbacks (remember that tragic accident in 2018?), the company decided to change lanes. Instead of burning cash on its own autonomous fleet, Uber is focusing on teaming up with the experts—like Waymo and GM’s Cruise. This move lets Uber leverage cutting-edge technology without the hefty price tag of developing it in-house.

By the way, Uber’s stock hit a record high of over $80 earlier this year but has gained 12% so far in 2024, which is about the same as the overall market. Even though the stock price is steady, Uber’s business is doing really well. The company’s revenue is growing by around 15-20% each year, and it’s now making an impressive 40% in profit margins. Honestly they’ve run past a lot of experts' predictions. 

Of course, the road ahead for driverless vehicles won’t be without its speedbumps. With Tesla's robotaxi reveal right around the corner and other players gearing up to enter the market, Uber’s got to stay on its toes. Right now, regulation is Uber's biggest hurdle, but looking ahead, the real game-changer might be technological advancements. As new companies roll out their own autonomous vehicles and robotaxis, Uber could either face serious competition.

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Stocks.News holds positions in Uber, Tesla, and GM.