Uber Technologies stock slipped Tuesday, as news of Waymo's latest expansion revved back up the debate about autonomous vehicles and the ride-hailing market.
The Alphabet-backed Waymo said late Monday that it will expand to Dallas next year in partnership with Avis Budget Group. Avis will manage the fleet of Waymo's autonomous cabs, which riders can book through the Waymo One app.
Uber has partnered with Waymo on some previous expansions for its robotaxis. But the ride-hailing company is not mentioned in the announcement.
Shares of the ride-hail giant have been sensitive for more than a year to any update on robotaxis, as investors fear that new autonomous offerings Waymo and Tesla will threaten Uber's strong market share. Uber stock slumped late last year after Waymo announced a plan to expand in Miami that did not include Uber.
That trend continued Tuesday, with Uber shares sliding more than 3.5% to close at 87.14 on the stock market today.
Uber-Waymo: Partners Or Frenemies?
Uber's strategy for robotaxi is to strike partnerships that bring the automated cabs onto its platform. It has positioned its app as the quickest way for makers of pricey AVs to see a return on investment.
Waymo is Uber's most high-profile partner. Waymo rides are available exclusively through the Uber app in Atlanta and Austin. In Phoenix, Waymo rides are available through both the Waymo and Uber apps.
However, Monday's announcement appears to be adding Dallas to a list of cities where Waymo and Uber compete directly. That list includes San Francisco, Los Angeles and planned Waymo expansions to Miami and Washington D.C.
Uber has struck several other deals with competing AV developers, however. Some Wall Street analysts question whether Uber can strike other partnerships without souring its relationship with Waymo.
Waymo's announcement "further validates our hypothesis that Uber's evolving approach to protect its value proposition will likely put its relationship with Waymo at risk," Wedbush Securities analyst Scott Devitt wrote to clients Tuesday. He holds a neutral call on Uber stock, citing a competitive risk from robotaxi providers.
Devitt pointed to Uber's previously announced plan to launch robotaxis in Dallas through a partnership with Avride, a robotaxi developer that is part of the Nebius Group.
This is also Waymo's first partnership announcement since Uber announced its own plan to partner with electric-vehicle market Lucid and software company Nuro for a robotaxi service. The three companies hope to launch more than 20,000 robotaxis over the next six years.
Uber Stock Slumping In July
In general, Uber's robotaxi strategy has been for its shares this year. Uber stock has bounced back from a late 2024 slump with a 50% rally year-to-date.
However, Uber stock has slumped 7% in July. Shares dived below Uber 50-day moving average with Tuesday's decline.
Uber will report second quarter earnings Aug. 6.
Uber stock holds an IBD Composite Rating of 96 out of a best possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating.
