By Al Root

Self-driving taxis are here. More are coming. What it means for investors is still up for debate.

On Wednesday, ride-hailing giant Uber, EV maker Lucid, and self-driving technology start-up Nuro announced plans to launch robo-taxis in Houston in 2027. The trio plans to launch a service in San Francisco later this year.

Uber operates the network, Lucid builds the cars, and Nuro provides the autonomous driving technology.

The move is yet another example that the long-promised era of driverless cars has arrived. Another example: automotive hardware and software provider Mobileye announced plans to operate robo-taxis on Wednesday.

Robo-taxis operate in 11 U.S. cities with a combined population exceeding 50 million. Alphabet's Waymo, Tesla, Lucid, Nuro, Nvidia, Amazon.com's Zoox, and others are all vying for a piece of the pie.

Exactly how the market will develop is anyone's guess. Will robo-taxi and self-driving car technology be car-like, with dozens of providers and low profit margins? Or will it be Google search-like with winner-take-all dynamics?

Tesla believes the latter, and thinks its advantages lie in low-cost car manufacturing and billions of miles driving using its Full Self-Driving driver-assistance product.

To be sure, low costs mean more market share. But cost differences might not be great enough to create a near-monopoly. Future Fund Active ETF co-founder Gary Black believes self-driving tech will end up being a feature of all cars, like air bags or anti-lock brakes. Suppliers of the feature will earn money, but not Google-like returns.

ARK Invest's Cathie Wood is on the other side of the argument. ARK believes Tesla will generate hundreds of billions in annual robo-taxi profits by the end of the decade. (Tesla is expected to generate a 2026 operating profit of about $6.2 billion, according to FactSet.)

The debate will be settled in the future. As for the debate about whether cars will drive themselves? That's over. They do.

Tesla launched its robo-taxi services in Austin, Texas, about a year ago, and now it operates in four cities. Investors want to see the service expand soon, partly to generate more earnings and partly to grab a leading early position in the new market.

Uber stock was edging down 0.4% shortly after the market open and Lucid shares were rising 5.3% while the S&P 500 was down 0.6%. Tesla stock was down 0.9%.

Write to Al Root at allen.root@dowjones.com

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June 17, 2026 10:01 ET (14:01 GMT)

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