Waymo and Uber just announced a partnership that will bring Waymo's autonomous vehicles to the Uber app in Austin and Atlanta. Notably, this is an exclusive partnership, meaning the only way you'll be able to summon a Waymo vehicle in these cities will be through Uber.

The people who follow this space closely, people like Reilly Brennan of Trucks (VC) and Harry Campbell (The Rideshare Guy), think this is a really big deal for a number of reasons.

One, it signals a bifurcation in the industry where there will be companies, like Waymo, that supply autonomous vehicles, and companies, like Uber, that operate them and manage the overall ride hailing marketplace. As part of this deal, Uber is going to handle all of the maintenance and cleaning of the vehicles. This split is similar to the airline industry.

Two, it suggests, and this is Harry's argument, that Waymo needs Uber more than Uber needs Waymo. One of the reasons for this is that a 100% AV fleet is simply too expensive to operate if you're solving for peak demand loads. Because during off-peak times, you then need to pay for downtime.

Uber, on the other hand, doesn't pay for downtime with its human drivers. Most of its drivers are part-time and only plug in when they want to or when the surge pricing becomes too attractive to pass up. So they're the perfect compliment to an AV fleet. Harry argues that this is part of Uber's competitive moat.

And three, it signals that AVs are really starting to arrive, if not already here. The hype cycle certainly hit its trough of disillusionment and everyone switched to thinking that AVs weren't going to happen for many years, if not decades. But now it's happening. City by city.