Cristopher Bermúdez@Crisb2708
I don't like this news for Uber.
Waymo is technically the only real player in the AV space right now. I think it’s good to maintain that partnership.
However, several points are important:
-The details of why they want to end the partnership early are unknown. Some people here are assuming that Waymo simply believes it will be better off without Uber, when reports say it’s likely due to reasons related to “service quality, safety, and robotaxi regulation.” There’s a huge difference between this and assuming that Waymo is predicting higher utilization by building the service independently.
They see a headline, see the stock price drop, and speak from the perspective of “I told you so.” No, the market’s reaction to a news story neither disproves nor confirms a thesis. Only time will tell how the business performs.
-Every prediction about the progress of AVs has been wrong, and every new prediction will likely be wrong. In five years, the number of trips with human drivers will still be overwhelmingly greater than those with AVs. That doesn’t mean Uber doesn’t care about AVs, nor does it mean it’s nonsense for the market to perceive this as a risk. It does mean that, for now, these developments represent an almost negligible share of the TAM over the next 5–10 years. Waymo is considering breaking away from Uber, and that’s bad for Uber, but what does it mean for Waymo if Uber enters the AV market with other operators—even in cities where Waymo already operates? Can they afford not to maximize their utilization? I don’t think so.
-It seems there’s a sense of urgency for Uber to roll out hundreds of thousands of AV rides right now. Maybe there is if you need the stock price to rise in a couple of months. But there isn’t if you’re focused on the long-term strength of the business. Traditional ridesharing continues to grow. I understand it’s frustrating to see the stock price fall despite such strong fundamentals, but Uber's management strategies have been correct. It's not easy to roll out hundreds of thousands of AV trips right now. Look at Tesla—it's been talking about that for a decade and had to watch firsthand as another operator became the leader in robotaxis, while they're still only conducting a few tests.
-Waymo’s decision to go it alone doesn’t put Uber in trouble. Its business is too strong right now. The only time we’ll know whether Uber is in trouble or not is when multiple players enter the scene (especially in the same city) and we see how the market behaves.
-Even in a “complicated” scenario like San Francisco, the city where Waymo has been building its presence for years, it has a large market share, but Uber (still the leader there) continues to grow because, in addition to other factors related to Uber’s service improvements, the TAM is larger and AVs cannot handle every situation, and no matter what the marketing hype tells you, they probably won’t be able to do so for the next decade. And this is in a scenario where the city’s conditions and regulations favor the development of AVs. Not every city works that way.
I'm going to buy more $UBER on Monday.
