Photo by Erik Mclean on Unsplash
 

On Wednesday, Uber Technologies (NYSE: UBER) unlocked Dallas as yet another city available for robotaxi rides, owing to its partnership with Avride, a subsidiary of Nebius Group (NBIS) using Hyundai’s Ioniq 5 EVs. Just a week ago, Uber expanded its robotaxi availability in Abu Dhabi by partnering with WeRide (Nasdaq: WRD) using its GXR fleet.

As Uber is building its Level 4 autonomous driving ecosystem with partners, Tesla’s (Nasdaq: TSLA) robotaxi service is progressively opening up, from California and Arizona to New York, Texas, Florida and Nevada.

Year-to-date, UBER stock is up 44% while TSLA has only gained 16% value after the slump between February and April. But beyond stock prices, and the recent TSLA boost gained from Trump’s robotics push, which economic model is likely to prevail between the two companies?

Uber’s Automation Drive Examined

In addition to the aforementioned Avride and WeRide, Uber is automating its ride-hailing network with Aurora, May Mobility, Lucid Group (together with Nuro), Momenta, Motional, Pony.ai, Waabi, Wayve and of course its largest partner – Alphabet’s Waymo.

Binding them all is Nvidia’s Drive AGX Hyperion platform, utilizing the Nvidia DriveOS operating system alongside its Level 4 full-stack software Nvidia Drive AV. In other words, Uber is investing in orchestrating an ecosystem rather than owning one.

In the absence of in-house hardware pipelines and vertically integrated manufacturing, this approach keeps the global robotaxi scaling costs light. In turn, this creates a momentum building on the company’s ride-hailing dominance across 70 countries and over 189 million monthly users as of Q3 2025.

In 2024 alone, Uber completed 11.2 billion trips. This is a solid basis for data-feeding needs. Through its existing Level 4 partnerships, Uber aims to collect over 3 million hours of robotaxi-specific driving data within Nvidia’s platform.

Moreover, Uber’s business model continues to be highly successful judging by latest Q3 earnings. The company’s gross bookings increased by 21% YoY to $49.2 billion, having increased trips by 22%. Overall, Uber’s net income increased to $6.6 billion in Q3 across its mobility, delivery and freight divisions, representing a 154% increase from the year-ago quarter.

At the same time, Uber is beholden to licensing agreements to facilitate autonomous driving, mainly from Waymo.
 

Supplier Risk in Uber’s Autonomy Strategy

At a glance, it may seem incongruent that Waymo is competing with Uber’s other partners. Likewise, Uber’s competitor Lyft also uses Waymo for autonomous ride services. However, Alphabet is building Waymo’s business model as universal AV infrastructure rather than a vertically integrated moat.

Waymo’s long-term bet is to sell autonomy as a licensable platform. This approach reflects Alphabet’s other platform – Android. As smartphone manufacturers plug into the Android stack, it gains proliferation. In the same way, Waymo is less concerned about competition but more with achieving the broadest possible deployment footprint across metropolitan areas.

In other words, Uber’s reliance on Waymo is simultaneously a strength and a weakness. Although Uber gains immediate access to high-safety and high-reliability robotaxi capabilities, avoiding associated R&D costs in the process, the company is beholden to licensing agreements.

Right now, we see the following dynamics:

• Waymo is leveraging Uber to gain maximum distribution exposure owing to Uber’s ride volume it cannot replicate on its own.
• Uber is leveraging Waymo to rapidly build up momentum ahead of its primary robotaxi competition – Tesla.
• Uber is hedging dependence by diversifying its AV infrastructure layer with partners outside Waymo – preserving its bargaining power.

Long-term, however, as autonomous driving becomes more common, safer and cheaper, Uber could face a differentiation problem as just another ride-hailing app running someone else’s operating system. Of course, at some point, Waymo could also increase pricing power or become more selective about platform partnerships, putting margin compression on Uber’s autonomy licensing fees.

After all, Waymo is part of Alphabet, the holder of the largest app ecosystem. On the other hand, Tesla’s robotaxi model is “cleaner”, if executed properly.

More By This Author: