BN Portfolio: FT: Uber commits $10bn to robotaxis in strategy shift

Key topics:Uber invests $10bn+ in robotaxis and autonomous tech partnershipsShift from asset-light model to owning fleets and equity stakesFaces rising competition from Waymo, Tesla, and Zoox.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Rafe Rosner-Uddin in San Francisco and Tim Bradshaw in London.Ride-hailing app races to make up lost ground with equity investments and vehicle order commitmentsUber has committed more than $10bn to buying thousands of autonomous vehicles and taking stakes in their developers, breaking from its asset-light “gig economy” business model to avoid disruption from robotaxis.The ride-hailing app has aggressively increased its dealmaking over the past year, announcing partnerships with more than a dozen providers, including China’s Baidu and US-based Rivian, as well as plans to launch robotaxi services in at least 15 cities in 2026.These deals put Uber on track to invest more than $2.5bn in equity stakes and spend over $7.5bn on robotaxi fleets in the next few years, according to FT calculations based on analyst estimates and people familiar with Uber’s deals. The agreements are contingent on its partners hitting certain deployment milestones..Uber has announced partnerships with more than a dozen providers, including Baidu's robotaxis © BloombergUber’s investments mark a striking reversal for a company synonymous with the gig economy model that emerged from Silicon Valley more than a decade ago. The group upended the taxi industry by pioneering an asset-light approach that relied on drivers using their own vehicles to ferry passengers.On Tuesday, electric-vehicle maker Lucid said Uber had expanded a previous deal to invest a total of $500mn in the California-based company and buy at least 35,000 of its cars, likely costing the ride-hailing group at least $2bn.Walter Piecyk, analyst at LightShed Partners, a venture capital investor, believes Uber’s recent robotaxi spending spree is “step one in a complete narrative change” around its business. “I think they are easing people into the concept” of Uber owning fleets of vehicles, he said.Uber is seeking to make up lost ground in the robotaxi race after selling its in-house autonomous vehicle arm in 2020 in a $4bn deal as part of a focus on profitability.Dara Khosrowshahi, Uber’s chief executive, has since committed to spend more than twice that sum with robotaxi providers from Silicon Valley through to Beijing and London. The total exceeds its $9.8bn in free cash flow last year.“We are putting our capital up in order to guarantee supply [of robotaxis] going forward,” Khosrowshahi told investors in February. “Much of that supply is going to be on profitable economics . . . And we will continue making these kinds of commitments.”.Uber’s shares, down almost 23 per cent in the past six months, largely reflect investors’ concern that the company’s role at the centre of a vast marketplace of drivers will be overtaken by a handful of AV providers. Other factors, including higher fuel costs and concerns about consumer demand, have also weighed on its share price.“The things that have hurt Uber’s stock are milestones from Waymo [and] Tesla,” Piecyk said. “Uber is trying to address the risk but it’s a balancing [act] — they need to reinvest for growth but don’t want to lose the investors that came in after it got to [profitability].”The company became profitable in 2023 after accumulating more than $30bn in operating losses.Uber’s attempt to gain a foothold in the robotaxi industry pits it against three of the world’s most valuable companies — Alphabet, which owns Waymo, Tesla and Amazon’s Zoox — all of which have thrived by cutting out various intermediaries.Uber’s deals are aimed at positioning it as a funnel through which an assortment of players can reach consumers. Khosrowshahi is also setting the group up to monetise AV data to train AI models and provide services, including insurance.“The medium-term problem for [Uber] investors is why this industry doesn’t ultimately go direct to consumer,” said Nick Jones, equity research analyst at BNP Paribas..Khosrowshahi expects Uber to play a prominent role in helping turn autonomous vehicles into a financial instrument. Although Uber has committed to underwrite tens of thousands of robotaxis, it expects fleet management companies, institutional investors and private credit to step in and ultimately help finance the deployment.“We do think that we will have a very, very healthy financing ecosystem both in terms of equity and debt,” Khosrowshahi previously said. “The whole system is going to financialise, just as you see data centres financialise as well.”It also has an important ally in Nvidia, the AI chipmaker that is investing heavily in the technology underpinning autonomous vehicles. Nvidia and Uber have co-invested in Wayve and Waabi as part of a wide-ranging partnership.But BNP’s Jones said investors were mixed on whether they wanted Uber to operate fleets of vehicles. “Can they really go more capital-intensive and pull that back [later] or do they end up becoming a more structurally capital-intensive company?”As part of its shift, Uber has been at the centre of negotiating partnerships between AV developers and carmakers, according to people familiar with the matter. Last July, it helped Nuro pair up with Lucid on a fleet of robotaxis. Waabi, an AV trucking developer, is working with Uber to finalise a deal with a carmaker to equip 25,000 robotaxis.Uber faces strong competition in the fast-growing market. While Waymo has partnered with Uber in several secondary markets, including Austin and Atlanta, it plans to go it alone in primary markets such as London as it already has in San Francisco.Waymo aims to operate 1mn paid weekly rides across 17 cities by the end of this year. It is forecast to account for more than 7 per cent of the overall US rideshare market by 2030, according to JPMorgan.In San Francisco, Waymo’s market share stood at about 16 per cent in February, according to Yipit, a data analytics group, compared to Uber’s 62 per cent. Across the US cities and regions where it has services, Waymo’s market share is around 7 per cent.Amazon-owned Zoox, which announced a partnership with Uber last month, would operate its own app in every market where its vehicles are on the road, chief technology officer Jesse Levinson told the FT.Tesla is operating its own app and Khosrowshahi previously remarked that the electric-car maker’s talks with Uber had fizzled as the company “want[s] to build it alone”.“Uber’s pitch to robotaxi operators is that it can increase vehicle utilisation beyond what they can achieve on their own,” said Neel Mehta, a partner at G2 capital. “That makes sense. The question is whether the economics are attractive after Uber takes its cut.”The ride-hailing app has increased its take rate — the margin it generates on each ride — from about 23 per cent at the end of 2020 to 30 per cent at the end of last year as it squeezes more out of people driving on the platform, according to earnings reports. Uber has not disclosed what share of each autonomous trip’s fare it will receive.Uber said this figure included insurance and that net of these costs and other incentives, its take rate in the US was less than 20 per cent..Khosrowshahi has cautioned that robotaxis are yet to scale to a level that is material for the company even if robotaxis present a “trillion-dollar opportunity”. “We added 50 times the trips on the Uber platform this last year than the entire AV industry added,” he previously said.“We’re very confident that we’re going to be the first choice for AV manufacturers and technology companies,” he added..© 2026 The Financial Times Ltd.

BN Portfolio: FT: Uber commits $10bn to robotaxis in strategy shift

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