When headlines hit the wire that Alphabet (NASDAQ: GOOGL) subsidiary Waymo was removing its autonomous vehicles from the Uber app in Phoenix, the market reacted with predictable, reactionary selling. Shares of Uber Technologies (NYSE: UBER) slid more than 4% on June 29 after the news was released, pushing the stock down nearly 12% year to date and leaving it near $72.
The knee-jerk interpretation is that Uber is losing its grip on the autonomous vehicle revolution, sidelined by a vertically integrated giant that has decided to go it alone. Take a step back and look at the underlying mechanics of marketplace dynamics. The withdrawal of a dozen Waymo vehicles in a single metropolitan market is not a structural failure of Uber’s long-term business model.
