One of the great features of the so-called gig economy is that many of its businesses operate with an asset-light model. Uber, for instance, relies on drivers showing up with their own cars. This is the opposite of, say, the real estate industry, which, for a lot of business models, is both capital-intensive and asset-heavy.

But there is one problem with the asset-light model, and it's that it may not work forever. The Financial Times just reported that Uber has committed to spending $10 billion over the next few years on actual cars and on equity investments in various strategic companies.

For instance, earlier this month, electric vehicle company Lucid announced that Uber will be investing $500 million in the company and buying at least 35,000 of its cars.

This is gig-economy blasphemy, but it's very obviously an existential concern for the company. Uber needs to be in the AV race, or else asset-light could be an asset-liability. The thing that helped Uber become successful in the past now seems to be what they need to overcome in this new mobility race.

On a loosely related note, I find it somewhat amusing that cities are now starting to push back against robotaxis out of fear that they will displace Uber drivers. If you were following Uber in its early days, you'll know that cities fought the company vehemently because of the taxi lobby. Now they're trying to protect it.

Cover photo by Erik Mclean on Unsplash

It seems like just yesterday that people were protesting Uber for disrupting the traditional taxi business. Now the question has become: are AVs about to disrupt Uber?

Over the last six months, Uber's stock price has declined nearly 19%. At the time of writing this post, its market cap is around $155 billion, compared to Waymo's private market valuation of $126 billion (though I'm sure many would argue this is a wee bit high).

The market seems to think that self-driving cars are a two-horse race between Waymo and Tesla. If this is true, what role will Uber play?

Uber has naturally tried to assuage concerns. Alongside their Q4 2025 earnings, they published a 13-page "spotlight" on AVs, where they argued, don't worry, everything is fine:

AVs will change how trips are supplied, but not how demand is aggregated. History suggests that over time as supply fragments and technology commoditizes, the platform that can bring the highest utilization to assets, and superior reliability to customers, will capture a large share of value. That is the role Uber is set up to play.

One of the arguments for this is that rideshare demand is highly variable throughout a week. A typical Monday can be less than half of a Saturday night, and daily troughs can decline to something like 5% of peaks.

So, if you try and service this demand variability with only AVs, you're going to have a lot of underutilized vehicles during off-peak times. This makes sense to me right now, but I'm not certain it will persist or always matter as the space evolves.

When Uber sold its AV division in 2020, I understood why (to try and reach profitability), but it always felt a little unsettling to me. AVs were very clearly the future — are you sure you want to sell this off?

Now I suspect they'll have to re-enter in a meaningful way. They're going to need to do it as long as the market continues to believe the current narrative.

I use Uber on a regular basis, but I already have the Waymo app on my phone (I downloaded it on a long layover in SFO where I contemplated a joy ride). As soon as rides become available in Toronto at reasonable prices, I wouldn't think twice about switching.

Cover photo by clement proust on Unsplash

Stock graph from the WSJ

Demand chart from Uber Q4 2025 Earnings — Autonomous Vehicles Spotlight

September 2025 was a milestone month for Waymo in California: It reached 1,000,000 paid driverless rides. This represents a year-over-year increase of ~182%, which is a pretty good sign that the technology works and that customers like it.

(Note: The dramatic falloff in rides in June 2025 was because of anti-ICE protests and vandalism taking place in Los Angeles and San Francisco. The company decided to temporarily suspend operations.)

This is still a small fraction of the traditional ride-hailing market, though. According to the California Public Utilities Commission, Uber and Lyft combined complete somewhere around 300-320 million passenger trips per year in the state. That averages out to roughly 25-27 million trips per month for context.

Still, the writing is on the wall. AV usage is growing rapidly and I think it's only a matter of time until it supplants traditional ride-hailing, and perhaps even car ownership.

Chart via Charlie Bilello