shares of Uber Technologies (NYSE: UBER ) Fell 9.6% in today’s trade.
At first, Uber’s fall may seem strange, as the company didn’t make any big announcements today. However, a potential future competitor did, with major potential long-term implications.
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On Thursday, autonomous ride-hailing company Waymo, which is majority owned the alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL ) announced that it will expand to Miami in 2025, with the goal of offering autonomous rides by 2026.
Waymo was founded in 2009 as one of Alphabet’s “other bets” or “moonshot” projects that could one day turn into a big business. Waymo was then spun off into a separate subsidiary in 2016, and Alphabet attracted outside funding to help bring its technology to market. In fact, Waymo just raised $5.6 billion from a group of majors venture capital Firms in late October. Deepwater Asset Management recently estimated that Alphabet still owns about 70% of the company today.
With its own ride-hailing app, Waymo is already providing autonomous rides in San Francisco, Los Angeles and Phoenix. Hence, Waymo could potentially become a major competitor to Uber, which dominates ride-hailing today.
Yet the two companies have recently partnered. In September, Uber and Waymo announced they would jointly bring autonomous rides to Austin and Atlanta through the Uber app. As part of that partnership, Uber will provide fleet management services.
However, Waymo identified another partner, Move, for fleet management in Miami. So, perhaps Uber’s exclusion from the Miami announcement led to such a big selloff today.
Investors may have thought that each additional city would partner Uber Waymo in Waymo. However, it seems Uber isn’t the only game in town for fleet management.
If Uber can leverage its dominant ride-hailing network effects The age of autonomyThis sell-off could be an opportunity to buy. However, there is also a chance that Uber’s autonomy could be disrupted. In that case, all bets are off.
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