Uber's (UBER) Waymo deal reaffirms marketplace value, says Morgan Stanley
Uber (NYSE: UBER) announced Thursday that it has partnered with Alphabet (NASDAQ: GOOGL) owned Waymo to make the Google self-driving ride-hailing service available to more people via the Uber platform starting in Phoenix.
The multi-year partnership will see the integration launch publicly later this year with a set number of Waymo vehicles across its newly-expanded operating territory in Phoenix. It will also include local deliveries and ride-hailing trips.
"Uber has long been a leader in human-operated ridesharing, and the pairing of our pioneering technology and all-electric fleet with their customer network provides Waymo with an opportunity to reach even more people," said Tekedra Mawakana, co-CEO of Waymo.
Reacting to the news, Morgan Stanley analyst Brian Nowak told investors that the partnership lowers the risk of an autonomous structural bear case.
"One of the longer-term investor pushbacks we have received to our OW UBER thesis has centered around a structural autonomous bear case. The
argument by these investors is that if an autonomous company reaches full L5 autonomous capabilities before UBER and LYFT, they would be able to launch their own competitive service, at a lower cost, capturing share in both the rideshare and food delivery markets," explained Nowak.
However, Morgan Stanley disagrees with the thesis. In addition, the analyst said that the partnership reaffirms their view of the value that the UBER marketplace provides.
By Sam Boughedda