Uber's stock has done exceptionally well this year. At the time of writing this post, it's up over 60% year-to-date. But at the same time, it remains unclear to me what the relationship will be between Uber and this brave new world of autonomous vehicles.
I mean, right now, if you're in Phoenix, I'm told you can order a Waymo car through Uber's app. But if you're in San Francisco, Waymo customers must use the Waymo app. It's all bit mirky right now, but Uber is just trying to put "as many cars on Uber's network as possible."
There's also an argument that, for the foreseeable future, ride-hailing networks are going to need some mixture of both human and robot drivers. I get this argument. But beyond the short term, I think there will be strong incentives to completely eliminate human drivers.
Last month, the New York Times announced that Uber is in talks with Travis Kalanick, the company's co-founder who got pushed out 8 years ago, to help him buy autonomous vehicle company Pony.ai.
It's a bit of an interesting story. Pony is a Chinese company, but because the US doesn't want Chinese tech to become too deeply embedded in the American economy — and has become increasingly hostile to such companies — it has been readying a clean US subsidiary of the business for sale.
This is what Travis allegedly wants to buy with the help of Uber. And it's particularly noteworthy because it could be an indication that Uber is worried about Waymo and wants to have its own AV unit (which it had previously, but then sold off in an effort to quickly reach profitability).
My sense is that Uber needs to do something along these lines. The risk of not having autonomous vehicle capabilities is simply too great.
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The autonomous vehicle narrative has historically gone something like this: remove the labor component of rides (i.e. drivers) and rides will become significantly cheaper. Then, people won't need or want to own a car anymore. They'll just Uber or Waymo or whatever around.
But as Waymo provides in and around 250,000 paid trips per week in the 4 cities in which it operates, the opposite has proven to be true — at least so far. A recent report by Obi (an app that aggregates real-time ride pricing) has just revealed the following for San Francisco during the period of March 25 to April 25, 2025:
In other words, Waymo is more expensive than Uber and Lyft, especially for shorter distances. Is this right? Well, Waymo may not have to pay drivers, but they do own and operate their own cars. Uber and Lyft do not. This represents a very different cost structure.
Bond — which is a San Francisco-based VC firm with a cool website — just published this 340-page report on Artificial Intelligence. One of the authors of the report is Mary Meeker. She has been called the "Queen of the Internet" thanks to a 20-year run of presentations about the state of the internet, and her perceived ability to identity new trends early. So people are paying attention to this report. Her last one was in 2019 and I mentioned her 2018 report on this blog, here.
At this point, it's boring to say that AI is ushering in "unprecedented" global change. Everyone sends around snippets from ChatGPT. I incorporate some sort of AI-powered tool all the time in my daily workflow. And we've started using it on our development projects to help with tedious things like design coordination. Eventually we'll probably stop calling it out as "AI" and just refer to it as the things that computers and the internet can do.
But I think it's valuable to point out that this has been a really long time coming. The report talks about an "AI winter" from 1967 to 1996. That's a long time to stay motivated and interested in something that doesn't seem to be gaining traction. And it's a reminder that crypto is still early. Even though I also use blockchains every day and I've already transitioned (or am transitioning) a lot of my online life, including this blog.
Of particular relevance to this community is probably the fact that AI is also going to have a meaningful impact on our built environment. One of the sections in the report is called "Physical World AI," and it talks about how quickly data centers are now being built (compared to housing) and how Waymo (using AI) has taken something like 27% of the ride share market in San Francisco in the span of just 20 months.
This transportation product is now scaling, and cities have always responded and remade themselves according to new mobility innovations. This time won't be any different.
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They also have a more inelastic supply base, meaning they have cars whether demand is high or not. Whereas in the case of Uber and Lyft, supply can be variable. That's the idea behind "surge pricing" — to induce more drivers onto the road when it's needed the most.
Fewer Waymos also means that wait times are going to be longer and that their cars are probably spending more time driving around without paying passengers. That's a cost.
Whatever the reasons, lots of people seem to be willing to pay the premium. Part of this almost certainly has to do with the novelty of riding in an autonomous vehicle. I'd pay more if they were in Toronto today. But another reason seems to be that people really appreciate being in the car alone. I guess it's akin to driving your own car.
It, of course, remains to be seen how Waymo's cost structure and pricing model will evolve over time, but I have no doubt that privacy will remain a feature people are willing to pay something for. In the modern world, we are all going to have at least two places of solitude: bathrooms and Waymos.
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