Uber Promises to Spend $10 Billion On Robotaxis as Growth Disappoints Investors

Uber could be the next Blockbuster — or Kodak, Polaroid, Borders … any company that was rendered irrelevant by new tech. But the ride-hailing giant is putting the autonomous pedal to the metal to avoid that fate. 

After reporting slowing growth and soft guidance, Uber saw its stock fall nearly 8% Wednesday. While Uber’s revenue rose 12% for the second quarter, that was a step down from its 14% growth the same time last year. Revenue from its delivery business jumped 28%, and riders took 3.9 billion trips, up 18%.

But that could all be in the rear-view as investors focus their attention on Uber’s place in the robotaxi race. 

Hands Off the Wheel

Uber pledged yesterday to pour more than $10 billion into building its autonomous-vehicle business with a near-term goal of putting 120,000 driverless vehicles on the road. The company that flipped the taxi industry on its roof thinks its 200 million-strong customer base will help it become the long-term winner when it comes to driverless taxis. 

But Uber’s starting a turn behind some of its competitors: 

• The National Highway Traffic Safety Administration last week gave Amazon’s Zoox the green light to deploy thousands of its steering wheel-less robotaxis and start charging for rides in the toaster-like vehicles. The company will start ferrying passengers, who’ll sit facing each other gondola-style, on August 10 in Las Vegas. 
• Waymo’s more traditional fleet, where riders can be comforted by seeing steering wheels spinning around on their own, has become the AV go-to in the meantime. The Alphabet-owned service said this spring it was making more than 500,000 trips a week, up from 50,000 less than two years ago. But for now, Waymo’s been a strategic partner for Uber, not a rival. 

Partner Up: Uber’s partnership with Waymo in select cities lets riders order Waymos from within the Uber app. Yesterday, Uber said it expected to continue operating with Waymo in Austin and Atlanta next year, though Waymo has notified the company it intends to end the partnership’s exclusivity in those areas in 2028. At the same time, Uber has a plethora of other partners, including Zoox and UK-based Wayve. But as Uber shifts its focus to its own AV efforts, and robotaxi rides make up a larger portion of total trips, those team-ups could show cracks.