Tesla's much-anticipated robotaxi reveal has mostly cast gloom on Uber stock since Elon Musk teased the carmaker's plan earlier this year. But at least one analyst sees Uber as a potential beneficiary for autonomous vehicles – so long as it can continue adding partners from within the industry.
Ahead of Tesla's Oct. 10 robotaxi event, stock analysts at Bernstein on Tuesday published a research report on the economics of operating an autonomous vehicle network. Bernstein rates Uber stock as outperform and is positive on the recent partnerships it has made with AV developers Waymo and Cruise.
"We believe that Uber offers valuable access to a large and active ride-share audience, with an already-scaled OpEx base, thus it can be a source of incremental demand and more efficient network management," Bernstein analysts led by Nikhil Devnani wrote Tuesday.
"Nonetheless, it's also increasing clear to us that ride-share platforms must strike partnerships because eventually AVs will be disruptive to ride-share cost structures — and they cannot be caught on the wrong side of history."
On the stock market today, Uber stock gained 1.8% at close at 72.80. Shares are approaching an 82.14 consolidation pattern buy point, according to MarkeSurge.
Uber Stock's Tesla Overhang
Uber stock has gained about 18% year-to-date, helped by a positive response to its second quarter earnings in early August. But shares of the ride-hail giant are below record levels reached in February. Uber stock slumped starting in April. That was when Musk, Tesla's Chief Executive, said the company would reveal a "robotaxi" product at an event Aug. 8. The date has since been moved back to Oct. 10.
Uber's smaller rival Lyft has struggled in that time as well, with an early 2024 rally wiped out and Lyft shares down more than 10% year-to-date.
The concern is that Musk's vision of an Airbnb-meets-Uber robotaxi service from Tesla would provide a new and financially-strong competitor.
In Bernstein's view, Tesla's approach to robotaxis could be disruptive to Uber and Lyft. But there are still a lot of questions and hurdles for the idea.
In the meantime, Uber and Lyft can position themselves as partners to autonomous vehicle markers.
"Cost dynamics likely protect Uber and Lyft for some time on undercutting, but these cars will have a structural cost advantage on labor and insurance over time," the Bernstein note said. "Partnerships are 'free cash flow friendly' and preferred vs. buying/leasing fleets. Uber leads the way here."
Uber's Partnership Approach
Investors appear to agree. Uber stock shot up 6.5% on Sept. 13 after the company announced an expanded partnership with Google's ride-hailing company, Waymo. Uber already offers Waymo driverless rides in Phoenix. Starting next year, the arrangement will expand to Austin and Atlanta.
Uber once invested significantly in building its own autonomous vehicles. But its strategy has shifted to instead partnering with self-driving car developers.
Last month, Uber announced a partnership with the General Motors-backed Cruise that will allow Uber riders to hail AVs in undisclosed markets starting next year. Uber also recently announced a strategic partnership with the startup Wayve, which makes AI-powered software for autonomous vehicles.
For AV developers, "there are real challenges to scaling, and opportunities for Uber and Lyft to add value as incremental distribution channels," the Bernstein note said.
