Bernstein on UBER and LYFT Following Robotaxi Panel

Bernstein analyst Nikhil Devnan shares Robotaxi panel takeaways.

The analyst commented: "Whether you cover the rideshare and delivery stocks, or you are analyzing Waymo (Alphabet covered by Mark Shmulik), Tesla (not covered), and other automakers, one of the most important questions is whether autonomous driving technology will become a commodity or not. In our view, the genie is out of the bottle on Autonomous Vehicles (“AVs”) and the availability and use cases for the tech will only continue to proliferate. We believe 2025 and 2026 will be defining years for the sector to transition from proof of concept to a viable commercial product in the US, and a critical period for determining whether the market can/ will become more competitive. Certainly, we expect the outcomes on these debates to have notable implications for UBER and LYFT stocks. This is an area we intend to keep doing work on.

Why it matters for UBER and LYFT?

The structural bear case on the rideshare stocks is that we are moving from a highly fragmented driver base in the current labor model, to a highly consolidated, winner-takemost AV market where UBER and LYFT will likely lose negotiating power (i.e., lower take rates). Thus, incremental AV providers coming to market is arguably more important than even announcing additional Waymo partnership cities for the rideshare stocks. We believe the emergence of a handful of capable AV tech providers would be enough to fend off the bear case. Getting access to the tech would also likely accelerate the upside case of lower rideshare costs expanding the TAM for UBER and LYFT.

Our key takeaway?

t has felt like a one-horse race in the US, with Waymo in the lead. 2025/26 could see a ramp in competition on the AV front. Zoox and Tesla have ambitions to roll out commercial services this year, with smaller providers also working towards deployment (Avride and May Mobility). The collapse of Cruise was a good reminder of how quickly things can change and how difficult it can be to assess the viability of disruptive technology from the outside. Nonetheless, we thought the commentary from our panelists was encouraging and supportive of the fragmentation thesis, even if they may be a year or two behind Waymo. From a stock perspective, we think it’s imperative for Avride and May Mobility to launch in 2025 on UBER and LYFT, respectively. Even if these partnerships are initiated at small scale, they would provide valuable proof points for long-term investors around the quality of alternative providers, and the durability of the UBER/LYFT take rate."

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