By Dan Gallagher

Uber can't seem to emerge from the shadow of what's to come. But what's to come may still need Uber.

Robotaxis are barely off the ground, but many investors already see the market as a two-horse race -- with Uber not among them. Waymo is offering full commercial service in six U.S. cities, with a dozen more slated to come online over the next year or so. Tesla offers its robotaxi service in Austin, Texas, and the San Francisco Bay Area, though the latter still requires a human "safety monitor" in the vehicle.

Because Tesla's service is designed to be available for anyone who owns a Tesla vehicle with the company's full-self-driving feature enabled, it could scale up rather quickly, at least in theory. And while Waymo has partnered with Uber for service in the Austin and Atlanta markets, Uber's lack of involvement in subsequent market announcements has created a perception that Waymo is increasingly planning to go it alone.

That has been a costly perception for Uber. The stock has lost nearly one-quarter of its value over the past six months, as Waymo has announced plans to expand into several new U.S. cities using its own app to run the service.

The company has tried to address the fears, even going so far as to release a 13-page slide deck with its latest earnings report devoted to making the case for why autonomous vehicles aren't an existential risk. But that did little to soothe worries; Uber's stock is down about 7% since the Feb. 4 earnings report.

"It will take time for the market to fully digest the potential that Uber's relationship with Waymo, the most advanced AV operator in the market, is under severe strain," MoffettNathanson analyst Mike Morton wrote in a note to clients following Uber's earnings.

With the robotaxi market in its early stages, it seems way too early to call a winner that will rule the category. But Waymo's momentum is indeed undeniable.

Waymo now provides more than one million paid rides in California each month, according to an analysis by Guggenheim Securities of data released by the state. That momentum helped drive a funding round that raised $16 billion for the company that is still majority-owned by Google parent Alphabet. Waymo now sports a private-market valuation of $126 billion -- only 16% below Uber's current market cap of about $150 billion.

But a valuation like that makes it even more imperative for Waymo to build a service that can scale to profitability sooner than later. Waymo's sensor-ladened cars are expensive, costing more than $100,000 apiece. Even if newer vehicles the company is building cut that cost by half, an autonomous-vehicle service needs to maximize utilization to earn a return on investment.

And that is tricky -- especially compared with a platform like Uber, which is well accustomed to using pricing and software to adjust its fleet of drivers to match times of peak and low demand. Without that capability, a robotaxi fleet is "immobilized capital," New Street Research analysts wrote in a report in December.

Waymo's latest funding gives it resources to continue its strong expansion pace. But even coming close to matching the scale of Uber and its smaller rival Lyft will take some time -- and presumes a large number of ride-share users are comfortable taking robot cars. Guggenheim analyst Taylor Manley estimates that Uber and Lyft combined will provide about five billion rides in the U.S. this year compared with 38 million for Waymo.

Uber, for its part, is hardly sitting still on autonomous vehicles. The company has partnerships with several smaller AV players and is even developing a robotaxi service for San Francisco -- Waymo's biggest market -- with partners Lucid and Nuro. And despite what seems like a growing rivalry with Waymo, Uber keeps making the case that the two services are better together.

In the latest earnings report, Uber claimed that AV trips per vehicle per day were much higher in Austin and Atlanta with shorter wait times compared with the Phoenix and Los Angeles markets, where Waymo runs its service through its own app.

But like companies in the battered software sector, Uber is currently in the difficult position of having to prove that it won't be disrupted by a still burgeoning new technology. And that is going to take a while, given the long time it will take for robotaxi services like Waymo and Tesla to scale. "The debate on AVs will take years, not months, to play out," said Morton of MoffettNathanson.

In a market inclined to sell now and ask questions later, Uber's stock may stay parked for a while longer.

Write to Dan Gallagher at dan.gallagher@wsj.com

(END) Dow Jones Newswires

February 19, 2026 05:30 ET (10:30 GMT)

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