Uber stock took another hit Wednesday on investors' robotaxi jitters. Shares of the ride-hailing giant fell after General Motors said it would wind down its Cruise self-driving-taxi efforts.
GM will focus instead on developing advanced driver-assistance systems for use in personal vehicles, the company said late Tuesday. The automotive giant cited growing competition in the robotaxi market. Cruise has faced several setbacks, while Alphabet-owned Waymo is already providing more than 150,000 paid trips each week. Tesla, meanwhile, is targeting next year to launch a ride-hailing service.
Gene Munster, managing partner at Deepwater Asset Management, wrote on X Tuesday that the Cruise announcement looked like good news for Tesla and Google and bad news for Uber and its top U.S. rival, Lyft.
"This is further evidence that the robotaxi market will be winner take most," Munster wrote. "The likely winners are Tesla and Waymo. The losers will likely be Uber and Lyft."
Uber stock slipped more than 4% to 62.01on the stock market today. In late August, Uber announced it would partner with Cruise to offer robotaxis on its app starting in 2025.
Uber Stock's Robotaxi Woes
This is the second time in the past seven days that Uber stock has sold off in response to robotaxi news. Shares sank more than 10% last Thursday after Waymo announced it would expand its Waymo One app to Miami.
Waymo has partnered with Uber to offer rides through the Uber app in Phoenix and for its upcoming expansions in Austin and Atlanta. So investors appeared startled when Uber was not mentioned in Waymo's announcement
Uber is pitching its app as a way for self-driving-car developers to find demand for their vehicles. Uber's app powered nearly 3 billion rides in its third quarter alone. It also has a partnership with Avride, part of Nebius Group (NBIS), and last week launched robotaxis in Abu Dhabi through a partnership with China-based mobility company WeRide.
But investors have largely taken a more bearish view this year on Uber, mostly because of robotaxis. The 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.
With Wednesday's decline, Uber stock is now down a 0.5% year-to-date and 1% from its price 12 months ago. That's a significant reversal after Uber's push to profitability and bookings growth powered a 150% rally in 2023.
Lyft stock is down 5% at 15.40. Its year-to-date gain has been knocked down to just 2%.
