Shares of Uber and Lyft fell Thursday after Google's Waymo unveiled plans to expand its robotaxi service to Miami, in a sign of growing investor worries about heightened competition in the rideshare market. A veteran analyst said Google appears to be "laying the ground work to cut out Uber."
The Alphabet-owned self-driving car company said it will start testing its car in the Florida city next year, with plans to offer its Waymo robotaxi service in 2026. Waymo already offers its ride-hail service in San Francisco, Los Angeles and Phoenix, with plans to expand to Austin and Atlanta next year.
The latest Waymo expansion is apparently reigniting a persistent point of tension for Uber and Lyft investors this year: the impact of self-driving cars on the ride-hail market.
Uber stock dropped more 6% to 67.43 in heavy volume on the stock market today. Lyft shed more than 6% to 16.13. Google stock was down a fraction.
Uber Stock Faces Robotaxi Fears
Robotaxi concerns have weighed on shares of both Uber and Lyft since Tesla Chief Executive Elon Musk first teased the company's CyberCab plan in the spring. Musk has previously described the effort as an Airbnb (ABNB) and Uber hybrid.
But Tesla is yet to launch a service, with Musk targeting next year for the company's service. Waymo, on other hand, is providing more than 150,000 paid trips each week. The company raised $5.6 billion for expansion in October.
On the other hand, Waymo and Uber have partnered in several markets. In Phoenix, Waymo's robotaxis are available through the Uber app in Phoenix, along with the Waymo One app. Next year, Waymo will expand to Austin and Atlanta with its vehicles exclusively available through the Uber app, as announced in September.
Gene Munster, managing partner at Deepwater Asset Management, wrote on X Thursday that his read on the latest Waymo announcement is "they're laying the ground work to cut out Uber."
"Today, Waymo gets some of its riders through its Uber partnership and some through the Waymo One app," Munster wrote. "The press release highlighted Miami will be available through the Waymo One app, with no mention of Uber."
Uber Partnering With AV Providers
Meanwhile, Uber is pitching its app as a way for self-driving car developer to find demand for their vehicles. Uber's app powered nearly 3 billion rides in its third quarter alone. Along with Waymo, Uber has struck partnerships with the GM-backed Cruise and Avride, among others, to place autonomous vehicles on the Uber app.
Lyft last month announced its own AV-focused partnerships, including with technology developer Mobileye (MBLY).
Wall Street analysts have generally taken the view that robotaxis are still far from reaching a significant scale, and that Uber and Lyft could ultimately benefit as partners to AV developers. Uber is rating a buy by 89% of the 57 analysts following the stock.
But investors appear uneasy. Uber's slide Thursday dragged shares back below the stock's long-term 200-day moving average and shorter-term 21-day line. Shares are ahead just 9% this year, after Uber racked up a near 150% rally in 2023.
Lyft meanwhile, fell below its 21-day line but remains above its 50-day and 200-day moving averages. Lyft stock surged 22% following a strong Q3 report early last month. But the stock is now more than 13% off highs from November. The stock has gained 7% this year.
