Uber Technologies Inc (NYSE: UBER) is up nearly 5.0% on Tuesday after the ride-hailing giant extended its robotaxi offering in collaboration with Waymo to Atlanta.
Waymo’s progress in autonomous driving has been rather positive for UBER since it secured a timely partnership with Google’s self-driving business in 2023.
However, Tesla’s recent launch of robotaxi services in Austin could prove a meaningful threat to Uber moving forward.
At the time of writing, Uber stock is up nearly 45% year-to-date.
Tesla’s robotaxi offering is designed to bypass Uber
Tesla’s robotaxi launch differs significantly from Waymo in that the electric vehicles manufacturer is building a decentralised, camera-based network – unlike Waymo that relies heavily on high-cost LiDAR systems and centralised fleet ownership.
The multinational’s approach could prove a major headwind for Uber since it’s designed to bypass ride-sharing entirely.
Billionaire Elon Musk is fully committed to not just launching a fleet of autonomous vehicles but enabling TSLA owners to rent out their cars via the company’s native app – essentially converting every Model Y into a potential UBER competitor.
Note that Tesla stock has gained as much as 7.0% ever since it launched robotaxi services in Austin on June 22.
Uber may fail to match Tesla’s pricing in self-driving
Waymo’s robotaxis may technologically be more advanced, but they’re notably more expensive as well, which means the startup will likely find it increasingly difficult to scale.
Its current fleet comprises mainly Jaguar iPace vehicles, each costing up to $200,000.
Moreover, Waymo must own, maintain, and deploy each of them by itself as well.
This makes Waymo significantly more dependent on partnerships with the likes of UBER to make sure that it reaches customers more efficiently.
On the flip side, Tesla is capitalising on its manufacturing scale and full self-driving (FSD) offering to create a low-cost, high-volume alternative.
Consider this: its robotaxis have already gone live in Austin at flat fares of just $4.20 compared to Uber’s average ride price of as much as $15.
Simply put, TSLA’s pricing model poses a big risk to UBER’s economics.
If Tesla Inc delivers autonomous rides at sharply lower cost, the ride-hailing firm’s current 30% take rate will inevitably become unsustainable.
And it’s not like Uber Technologies has the leeway to attempt matching the EV maker’s pricing since it would require cutting driver incentives, risking a mass exodus from the platform.
Still, Uber shares are currently trading near their all-time high of about $93.
Why Uber stock may decline in the back half of 2025
UBER stock stands to be hit following Tesla’s robotaxi launch also because the latter doesn’t need a customer base – it already has millions of vehicles on the road and a loyal user base all ready to be converted into riders and fleet operators.
This is why analysts are increasingly framing the competition not as Waymo versus Uber, but as Uber versus Tesla Inc.
“Tesla is the 800-pound gorilla,” said Morningstar’s Mark Giarelli in a recent note, adding “what they want to do is decentralise what Uber does.”
And Dara Khosrowshahi, the chief executive of Uber Technologies Inc, seems to agree, given he recently said, “No one wants to compete against Tesla or Elon, if you can help it.”
While Uber already has a dozen autonomous partnerships and a robust logistics backbone, it lacks a proprietary fleet and the vertical integration TSLA enjoys.
If Musk’s robotaxi network scales as promised – with millions of autonomous vehicles operating independently – it could render UBER’s platform model obsolete.
In conclusion, Waymo may have been a partner, but Tesla is a paradigm shift.
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