I’m Still Bullish on Uber ($UBER). Here's Why.
Driverless cars won’t kill Uber - they might just make it unstoppable...
Hi, Investor 👋
I’m Jimmy, and welcome back to another edition of our newsletter. Today’s post is an update on our Uber Technologies ($UBER) investment thesis, first published earlier this year.
After a +55% rally, we’re revisiting the stock to dive deeper into autonomous vehicles - and the big question ahead: in a driverless future, who wins - the builders, or the platform?
In case you missed it, here are some recent insights:
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We published our investment thesis on Uber Technologies ($UBER) back in January 2025.
If you're curious, here’s the full thesis:
Since then, the stock has rallied +55.9%, significantly outperforming the S&P 500 during the first half of 2025.
In our view, a key driver of this alpha was the de-risking of autonomous vehicles - a segment once perceived as the greatest existential threat to Uber’s business model…
After more than a decade of pilots and prototypes, the autonomous vehicle (AV) industry is finally moving from R&D to commercialization.
Robotaxi services are now live in multiple cities, and real scale is beginning to emerge.
What was once considered the company’s greatest existential threat is now becoming a major tailwind.
And Uber isn’t trying to outbuild the AV players. It’s positioning itself to orchestrate the network they plug into.
That shift may prove to be one of its most important strategic moves yet…
Industry Overview 🚘
The autonomous vehicle space has become increasingly competitive.
In the U.S., at least six serious players - most backed by tech giants or legacy automakers - are actively scaling robotaxi services.
Some are limited to just a few cities. Others, like Waymo, are expanding at a faster pace.
Waymo, for instance, now operates in San Francisco, Los Angeles, Phoenix, and Austin.
As of spring 2025, it averages more than 250,000 trips per week - around 13 million rides per year. That still represents less than 0.5% (!!!) of the total U.S. rideshare market, but the trajectory is what matters.
And that trajectory looks promising:
In Austin, Waymo vehicles are already outperforming human drivers, with 24+ trips per vehicle per day.
Other AV firms are making moves too, with expansion announcements from Hamburg to Dubai, and pilot tests running in more than a dozen North American cities.
Some analysts now forecast that the number of commercially operating robotaxis in the U.S. could exceed 10,000 by 2026.
While most services remain constrained to geofenced zones, regulatory momentum and hardware readiness are rapidly closing the gap.
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Uber’s Strategic Role ♟️
Uber has chosen a unique path. Instead of building its own AV hardware or software, it's becoming the platform that connects riders with autonomous fleets.
Platform, not producer.
By mid-2025, Uber had partnered with 18 AV developers. In cities like Phoenix, Austin, and Atlanta, riders can already book AV trips within the Uber app.
In these markets, Uber isn’t just another option. It’s often the primary source of demand for AV providers. That demand brings benefits:
Higher trip density;
More efficient routing;
Faster data collection and feedback loops.
Uber also deploys a hybrid dispatching strategy: short, straightforward trips go to AVs, while longer or more complex ones are reserved for human drivers.
AV Developers vs. Uber Platform 🔐
Could AV companies build their own apps and compete directly?
Technically, yes. But it’s a heavy lift…
Uber already has:
Millions of users and established brand equity;
Sophisticated logistics, pricing, and trust infrastructure;
Real-world data from billions of trips.
For AV firms, plugging into Uber means better fleet utilization, quicker market validation, and less friction at launch.
Especially in early-stage deployments, it’s often the fastest route to scale.
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Austin Case Study 📈
Uber’s partnership with Waymo in Austin is a standout. Waymo vehicles there are busier than 99% of Uber’s human drivers, averaging 24+ trips per day.
That’s not just efficient - it’s highly scalable…
Customer engagement is also strong. Opt-in rates are above 50%, and users tend to return for more AV rides after their first experience.
Operationally, Uber steers short trips to AVs during off-peak hours, like 2 - 4AM, when driver availability is low. In Austin and Abu Dhabi, Uber even coordinates fleets through third-party operators.
Globally, more than 15% of its supply hours now run through fleet models.
AV Ecosystem Layers 🌐
Uber envisions the AV industry organizing into five layers:
OEMs - manufacturing vehicles;
AV software developers - enabling autonomy;
Fleet operators - managing deployments;
Financiers - providing capital to fleets;
Demand platforms - connecting riders to vehicles.
Uber’s ambition is to lead that fifth layer.
As CEO Dara Khosrowshahi recently said:
“We want Uber to be the platform for all modes of mobility - whether there’s a driver behind the wheel or not.” (!!!)
AVs may only represent a single-digit share of rides globally in the near term, but in cities like Austin, that share could climb quickly.
Improved simulation tech could also accelerate the timeline for new AV entrants - and Uber is ready to distribute their supply.
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Platform Economics 🔎
Uber’s model echoes other platform giants.
Amazon didn’t need to make products to dominate ecommerce.
Airbnb doesn’t own homes.
Uber doesn’t need to build AVs to lead autonomous mobility.
If AV hardware becomes commoditized, the value moves upstream - to the platform that controls demand, pricing, and routing.
Uber’s asset-light strategy positions it well for this future.
Rather than own the vehicles, it wants to own the interface. And it’s already proving that model can work.
Competitive Threats ❌
Of course, challenges remain…
A large AV firm could scale its own consumer-facing app. Rival platforms may emerge. Regulators might favor more open ecosystems.
Still, Uber has a clear edge in scale, trust, and operational depth. For most AV providers, partnering with Uber is the fastest path to users and revenue.
If its performance in Austin can be replicated in cities like Miami or London, Uber could become the default gateway to autonomous mobility.
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Investment Thesis: 📊
Now let’s update our investment thesis on Uber (+ valuation and NEW target price)…
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