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The latest leading indicator of the robotaxi revolution is a tiff. Waymo LLC, a unit of Alphabet Inc., and Uber Technologies Inc. are nominally partners. Uber was telling Atlantans "the future is here" only a year ago, with a tie-up allowing them to summon Waymo's robotaxis exclusively on the ride-hailing giant's app. These days, the two companies trade thinly veiled jabs in a gathering lobbying battle.
In a way, that does suggest the future is arriving faster than anticipated.
This week's public hearing in Washington DC to debate proposed local legislation allowing autonomous vehicles provided a new forum for disagreement. Uber's representative talked up how drivers on its platform spend their earnings, and pay taxes, within the city while robotaxi profits flow to unnamed companies based elsewhere. Waymo's conceded that robotaxis would mean job losses "like with any other technological shift," but also observed that companies "seated at this table" controlled drivers' earnings today and were taking a significant chunk for themselves.
This diplomatic sparring is just the latest sign of discord. The most striking example came in late April when Uber's chief technology officer posted video on X of a "scary @Waymo moment" in San Francisco. Flagging apparent problems with robotaxis is fair enough, but you just don't normally see executives calling out partners that way. Chief Executive Officer Dara Khosrowshahi, answering a question about autonomous vehicles on an earnings call in May, listed areas of concern - "situations where the power goes out or interacting in school zones or working with firefighters" - that just happened to hit on recent Waymo controversies. Not long after, Waymo and Uber ended a partnership in Phoenix, signed in 2023.
There is an argument for such partnering. Uber's reach and logistical capabilities are useful tools as Waymo, and other robotaxi operators, seek scale. For Uber, robotaxis add capacity to serve its customers in a hybrid model that mixes human and artificial drivers. Robotaxi developers can also be customers for Uber's back-end services and its capital if it invests in them.
There is, however, an inherent competitive tension. Uber wants to protect and grow its position linking consumers to transportation, takeout and other services, building on its ubiquitous app. "Just like we want every safe human driver on the platform, we want every safe robot driver on the platform," Khosrowshahi put it candidly on an episode of the Decoder podcast in May.
Waymo not only aims to disrupt the economics of ride-hailing, chiefly by removing the human driver, but also to build its own brand and loyal customer base downloading its app. It just launched a new ad campaign that tries to counter the narrative of robotaxis displacing humans by emphasizing safety benefits for riders. Tesla has similar ambitions for its "cybercabs."
Uber's finance chief, Balaji Krishnamurthy, captured the dichotomy well at a recent Wall Street conference with this oddly worded summation of his company's strategy on autonomy: "We are going to invest to future-proof ourselves against the opportunity that's in front of us."
That paradox extends to Uber's lobbying efforts and its recent white paper titled "Unlocking the promise of autonomy." This mostly involves locking robotaxi development into Uber's preferred hybrid humans-plus-robots model on the grounds that its network isn't merely a commercial enterprise but also something like a public good. On this reading, policies should favor Uber's approach because of societal benefits, which it says include providing work for drivers and transportation for underserved communities, as well as managing congestion.
Uber hence opposes the proposed legislation in Washington, believing it limits the hybrid approach (Waymo and, with caveats, Tesla support the legislation). Similar battles are playing out elsewhere. A proposed law in New Jersey, for example, could effectively block Tesla deploying robotaxis there via equipment requirements. Labor union opposition has stymied legislation to enable robotaxi deployment in New York.
If there is some irony in Uber finding itself on the same side as some unions in robotaxi politics, there is also some signal.
Uber's placement of multiple bets with various robotaxi developers, centered on a symbiotic relationship between emerging autonomous fleets and human drivers, is a rational strategy at this nascent stage. That is certainly the prevailing view among Wall Street analysts, almost 90% of whom rate Uber's stock as a "buy."
Part of the reason they do, however, is that investors seem more skeptical.
It is striking to see a company whose earnings are forecast to more than double over the next three years trading at a discount to the market.
One interpretation is that, for all of Uber's near-term strengths in terms of incumbency, growth and free cash flow, investors are more deeply discounting its terminal value, or that share of the price relating to earnings beyond the next several years. Some of the biggest one-day drops in Uber's shares have coincided with news of expansions or initiatives involving Waymo (or Tesla). While Waymo and robotaxis remain small in the grand scheme of things, their growth is outpacing even relatively recent forecasts from the likes of Morgan Stanley and Goldman Sachs Group Inc.
In other words, the market may be indicating a future of widespread robotaxi deployment arriving sooner than anticipated by even Wall Street's bulls, and cannibalizing Uber's business in the process. Uber's efforts to slow and shape that process, while offering a defense, also suggests anxiety about the same outcome.
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Liam Denning is a Bloomberg Opinion columnist covering energy and commodities. A former investment banker, he was editor of the Wall Street Journal's Heard on the Street column and a reporter for the Financial Times's Lex column.
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