Recently, Uber Technologies UBER signed a deal with China’s internet giant Baidu BIDU as part of its efforts to tap into the rapidly evolving autonomous delivery space. Through the deal, China’s company aims to launch its driverless cars on the ride-hailing app, Uber, in Asia and the Middle East this year.
The collaboration unites Baidu's cutting-edge AI capabilities with Uber's unmatched distribution power. The multi-year partnership will see thousands of Baidu's Apollo Go autonomous vehicles (AVs) on the Uber platform across multiple global markets outside of the United States and mainland China. By bringing Baidu’s advanced AVs onto Uber’s extensive network, the collaboration focuses on increasing the supply of affordable and reliable ridesharing options, thereby showing its customer-friendly face.
After launch, if a rider requests a qualifying Uber trip, the person may be presented with the option to have the trip fulfilled by a fully driverless Apollo Go AV. Expressing delight at the development, Uber’s CEO Dara Khosrowshahi stated, “This partnership brings together two of the world’s most iconic technology companies to help shape the future of mobility.”
In another robotaxi-related development, Uber partnered with Lucid Group LCID and self-driving start-up Nuro. Following the deal, at least 20,000 self-driving Lucid vehicles armed with Nuro’s autonomous driving software will be added to Uber’s network over the next six years in exchange for the latter’s substantial investment in both companies.
The above deals highlight Uber’s asset-light approach through strategic partnerships to gain a stronghold in the evolving and highly lucrative robotaxi market. These agreements underscore Uber’s commitment to integrating cutting-edge AV technologies into its platform. With this approach, Uber has avoided the massive R&D costs associated with developing autonomous systems independently.
Uber’s dominant market share in the ride-hailing industry also gives it a unique advantage. With its vast network of drivers and customers, Uber can quickly scale autonomous services once the technology matures. Its app is designed to integrate AVs from multiple partners, giving users a variety of options.
Uber’s strategy of leveraging external expertise could prove to be very effective as it aims to gain a stronghold in the robotaxi ride-hailing market, offering massive growth opportunities. The race to deploy robotaxis at scale is set to reshape transportation.
Uber’s AV ambitions are gaining real-world traction through scalable, cross-market deployments. While macro risks and regulatory scrutiny remain, Uber’s ability to scale both core businesses (mobility and delivery) and emerging automation initiatives positions it well for long-term growth. Uber is focused on unlocking growth in suburban and low-density markets.
Story ContinuesUber’s Price Performance, Valuation and Estimates
Shares of UBER have gained 50.1% so far this year against the Zacks Internet-Services industry’s 1.4% decline in the same timeframe.
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From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 3.45X. UBER is inexpensive compared with its industry.
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The Zacks Consensus Estimate for UBER’s 2025 and 2026 earnings has been revised upward over the past 60 days.
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UBER's Zacks Rank
UBER currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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