Uber (UBER) – Misc. – April 06, 2024
Uber will partner with Acadia Healthcare to offer transportation to its patients as it continues its push into business-to-business (B2B) use cases. Acadia does more than $3 billion in annual revenue, making this a material get for the Transportation Giant.
In other news, as expected, Waymo and Uber have begun their autonomous delivery experiment in Phoenix. Many are concerned about Uber’s role in ride-sharing as the autonomous wave hits in the coming years. That’s not a near-term risk, but continuing to lead amid all of that change is a risk. The upside would be that it maintains dominance while utilizing fewer drivers and enjoying a more profitable book of business. The downside would be Google or Tesla trying to build an Uber on their own to replace it. To me, this is why it’s so important for Uber to continue growing its consumer market share lead. Autonomous Vehicle (AV) programs will need sky-high occupancy rates to be optimally profitable to fund hefty costs. How do these AV programs realize that needed objective? By partnering with companies like Uber to plug into massive customer demand. The Waymo relationship is promising, though I’d absolutely love to see a Tesla partnership too. And I do think that will come as Tesla sees the value in Uber’s global scale and guaranteed traffic.
This partner-first approach is one that I support vs. Uber’s old aim of building internally under its founder. Uber’s consumer differentiation (aside from lower surcharge rates and wait times due to having more drivers) lies in its network, brand awareness and product breadth. Not in its ability to beat Google and Tesla to autonomous cars. Merging these strengths is highly preferred by me personally. Doing this alone is too costly and too risky.
Finally, Jefferies modestly raised its Uber price target to a street-high $100 per share. That’s nice. What’s nicer? That the optimism is based on new product traction and anticipated profit beats.
