Uber Stock: Can It Thrive Alongside Waymo and Tesla Robotaxis?

During their recent episode, Taylor, Carlisle, and Jonathan Boyar discussed Uber Stock: Can It Thrive Alongside Waymo and Tesla Robotaxis? Here’s an excerpt from the episode:

[Jonathon] Yeah. Yeah. We I mean, we’ve been waiting for Elon Musk to roll out cyber cabs since like 2020.
Waymo has done a fantastic job and they’re a formidable competitor. But the thesis on Uber is as long as there’s not just one autonomous vehicle company, they’re going to do quite well. People are not going to want six different apps.

You’re only as good as what you can do during peak demand. Waymo, even though they’re largely owned by Google, is not going to it wouldn’t be capital efficient for them to have enough vehicles to satisfy peak demand, especially in areas that are more rural and suburban. So I think it’s going to be a hybrid mix for many years.

And Uber is the go to platform. Plus, they have the delivery part of the business. Dara, you know, for the first time in a while, just bought back some stock.

It’s as I said, it’s selling at a below market multiple. And I think our thesis pans out as long as there’s not one winner in autonomous vehicles. Plus, they’re partnering with Lucid and a few others to, you know, put these cars on the road.

And they’re generating a tremendous amount of cash flow. I think they’re going to have 10 billion dollars of free cash flow next year. It’s and they’re buying back stock.

[Jake] I mean, anecdotally, I feel like the price of taking an Uber has gotten they’ve been really taking price. Yeah, well, everything I mean, everything two or three X, I feel like what I used to pay for comparable trips.
[Jonathon] But the number of trips and revenues still still growing. So they’re able to they’re able to absorb it. And they’re you know, the cost of these things are going up with the price of gas, etc.
So it’s, you know, but yeah, no, it’s a very profitable business. And, you know, it’s ubiquitous. It’s literally a verb.

We like those type of companies.

[Tobias] So that that’s a little bit of a plus for Tesla, isn’t it? Wasn’t that the thesis that you like you park your car and then you just put it in the pool and it goes to work for itself during peak hour? It goes and pays for itself.
[Jonathon] Yeah, it’s what happens when someone makes a mess in your car.
[Tobias] Well, that’s true for Lucid, too. Yeah. And you’re gonna put a hundred thousand dollar vehicle into the cat pool.
[Jonathon] Well, I mean, they’re making Lucid cyber type of like solely for that. And that’s the other thing like you Tesla needs an infrastructure on. They need to clean these things.
They need to make sure everything runs smoothly. It’s not just putting a car out on the on the road. So Uber has all the, you know, back end operations for it.

Waymo, I’m not dismissing what they’re doing, but Waymo would have to, I think, double the amount of rides every year for the next seven or eight years to get to where Uber is today. And Uber is growing. So Waymo is a long way to go.

And Uber and Waymo in their latest funding round was valued closer to that of Uber. Just, you know, you have to kind of think about it in those terms as well.

[Tobias] So the the challenge for Waymo is that at peak hour, at peak hours, it costs so much to have that many cars on the road that it’s not economic.
[Jonathon] Exactly. I mean, think about how many you really need cars from, you know, seven in the morning to nine, ten in the morning and, you know, four to seven on, you know, in the evening and then certain times on the weekends during the day, you don’t need nearly as many of those cars. So you just they would just be sitting there.
And these cars, obviously, they’re gonna get cheaper and cheaper. But right now, the cars are like $100,000. So you’re just you’re going to need that hybrid mix.

Plus, if you look in the cities that Waymo is in, San Francisco being one of them, Uber is still growing in those areas. So it’s it’s not taking away share from them.

[Tobias] Yeah, it’s interesting. I see Waymo’s when I go to Santa Monica, there’s no Waymo’s where I am, but Santa Monica and downtown and there’s but Uber’s will come here. Yeah, it’s hard to see who wins that.
And then but I still think that’s a big plus for Tesla if they can figure that out. They’ve got people who are prepared to put their cars into the pool anyway.

[Jonathon] Yeah, I mean, if they’re able to do that, it’s a lot easier said than done. It’s also the they’re way behind in terms of the regulation. It’s not easy to get cities to approve these things.
So, you know, we’ll see. Elon Musk is someone I would never bet against. I just don’t think it’s going to be a winner take all type of scenario.