Uber ($UBER) & Lyft ($LYFT) – RoboTaxis & Hong Kong – July 13, 2024
RoboTaxis
Tesla reportedly delayed the date of its robotaxi event from August to October. Uber stock responded very positively to this piece of news. I don’t think it makes sense that Uber sold off on Tesla robotaxi news in the first place; I don’t think it makes sense for a delay to lift the stock either. Why? Because I think autonomous vehicles will be somewhat positive for Uber’s business.
As I’ve said many times, autonomous fleets will be cash incinerators without plugging into optimal demand aggregators. That is Uber. Uber is ubiquitously associated with ride sharing and commands by far the largest loyal consumer network. I think Tesla will end up integrating with Uber when this product is finally ready for prime time. And I think it makes all the sense in the world for individuals wanting incremental income from their vehicles to plug into the network that can maximize that income. On the commercial fleet side, Uber will absolutely have to pay Tesla, Waymo (Google; current Uber partner), Zoox (Amazon) and other players a handsome take rate for access to their hardware. Still, eliminating driver compensation creates a lot of revenue to share.
Next, the world will not go from driver to driver-less overnight. It will take years and potentially decades for that to fully unfold. Manned fleets will be vital for a long time; they’ll allow commercial players to sidestep building out too much capacity to service peak hours of traffic. Doing so would mean waste and inefficiency during all other parts of the day. Yet another reason why Uber is the perfect partner for all of these players in the autonomous revolution. That is why Uber’s leadership speaks so positively and optimistically about this playing out.
Hong Kong
Hong Kong’s government is planning to more tightly regulate ride-sharing. The government plans to establish licensed ride sharing vendors with harsher penalties for violators. To be honest, that sounds like good news for Uber. It could diminish the frequency of under-the-table payments made to drivers servicing consumers.
