Lyft Inc.‘s (NASDAQ:LYFT) ambitious partnership with Waymo to bring driverless cars to Nashville by 2026 raises questions about its short-term growth potential, as analysts point to limited vehicle supply initially affecting market impact. Despite investing $10 million in a dedicated depot and strengthening its position in autonomous vehicles, Lyft faces challenges from non-exclusive agreements and potential barriers in fleet management.
The collaboration will leverage Lyft’s proprietary integrated fleet management services through its Flexdrive subsidiary, which will provide end-to-end fleet management, including vehicle maintenance, infrastructure, and depot operations for the Nashville fleet.
Riders can hail Waymo’s fully autonomous vehicles first on the Waymo app, with plans to also dispatch its fleet on Lyft’s network for matched rides later in 2026.
As part of this partnership, Lyft will construct a purpose-built AV fleet management facility with charging and vehicle service capabilities.
BofA analysts Michael McGovern and Justin Post on Wednesday wrote, “Waymo is a high-profile partner for Lyſt, & Waymo launches in 2025 were catalysts for Uber stock.”
Also Read: Uber Bets On Drones With Flytrex Deal To Speed Up Deliveries And Cut Costs
The analysts see minimal impact on Lyft's volume growth, citing limited initial Waymo supply. Waymo One will continue offering direct rides post-launch, with no clarity yet on a Lyft-exclusive Waymo tier.
While the deal is non-exclusive, integration in Nashville appears strong. Lyft plans to invest about $10 million in a dedicated depot to service Waymo vehicles. FlexDrive-only rides likely carry weaker unit economics but remain profitable.
“Lyft’s growing position in the AVs makes the company more competitive, but there are still partnership unknowns, including Waymo supply/availability on Lyſt and FlexDrive competition (barriers to entry in fleet management are likely relatively low),” the BofA analysts wrote in an investor note.
BofA raised the price target from $12 to $14, with an underperform rating, citing that Lyft trades at 13x 2026E EBITDA, narrowing the gap with Uber's 18x, but faces greater autonomous vehicles risk given its heavy exposure to Waymo markets.
LYFT Price Action: Lyft shares were down 2.74% at $22.21 at the time of publication on Thursday. The stock is approaching its 52-week high of $23.50, according to Benzinga Pro data.
Read Next:
Photo: Shutterstock
