Uber faces long-term risks as Waymo, Tesla advance autonomous ride-hailing

Uber Technologies Inc (NYSE:UBER, XETRA:UT8) faces growing long-term risks from the accelerating rollout of autonomous vehicle services, according to a research note from Wedbush analysts.

The analysts pointed to recent moves by Waymo and Tesla as reinforcing competitive pressures on traditional ride-hailing platforms. Waymo recently announced that it will begin public operations of fully autonomous rides in Miami, alongside the company’s expectation to surpass 20 million paid rides by the end of 2025 and lay the groundwork for operations in more than 20 additional cities.

Separately, Tesla disclosed that it has removed the safety monitor from its robotaxi operations in Austin, a step Wedbush views as a meaningful validation of Tesla’s camera-only autonomous driving approach.

Following these developments, Wedbush’s analysts wrote that the market reaction in Uber and Lyft shares was warranted. “In aggregate, the net effect of these moves imply a loss of market capitalization for the industry, validating our thesis that incumbents will be a share donor to the AV category over time,” the analysts wrote.

Wedbush noted that both Tesla and Waymo continue to expand their artificial intelligence infrastructure and data collection capabilities, while several of Uber’s autonomous vehicle partnerships are not expected to scale meaningfully until later this year and into 2027. As a result, the firm suggested that 2026 could be challenging for Uber and Lyft if autonomous adoption accelerates.

The analysts also noted that Waymo has not announced new partnerships with either Uber or Lyft in its planned operating areas, adding that as Waymo moves beyond what they described as its “training wheels” phase, distribution may increasingly occur through its own Waymo One app rather than third-party integrations.

The analysts believe the latest announcements support their view that autonomous vehicles will gradually disrupt existing ride-sharing dynamics. “We continue to believe the market is underestimating the negative terminal value impact that AVs may have on the incumbents’ DCF value,” the analysts wrote.

Wedbush estimates that roughly 40% of Uber’s mobility bookings are most exposed to autonomous competition, even as the company explores alternative strategies to protect its value proposition.

The analysts believe Uber’s two-sided marketplace model benefits from highly fragmented supply, while the rise of autonomous fleets could lead to greater supply concentration over time. “Over the next 12 to 18 months, investors will intensely debate the timeline in which AVs will expand to a greater share of consumers and the role of third-party distribution networks as the industry shifts,” they wrote.

Wedbush has a ‘Neutral’ rating and $78 price target on Uber, implying downside from current levels of about $82.