Waymo Applies for NYC Testing Permit: Is it a Risk for Uber?

Alphabet’s GOOGL Waymo applied for a permit to test its autonomous vehicles in New York City. Shares of Uber Technologies UBER declined on the news due to concerns of future competition in one of the largest ride-hailing markets in the United States.Waymo has applied for the permit to begin testing its self-driving vehicles in Manhattan. The proposed tests would include a trained human specialist in the vehicle to supervise operations. Regardless of whether the permit is granted, Waymo intends to begin collecting data and evaluating its autonomous driving technology in the city from next month.Alphabet’s Waymo already offers fully autonomous, paid ride-hailing services in several major U.S. cities, having achieved significant milestones in the industry. However, Waymo faces substantial regulatory barriers in New York, with current state laws not permitting fully autonomous commercial ride-hailing services.We do not expect Waymo’s move to apply for a testing permit in the densely populated New York City to have much of an adverse impact on Uber’s prospects as feared. Ride-sharing companies like Uber and Lyft LYFT have successfully navigated complex regulatory relationships with the city. Shares of Lyft also fell on the move by Alphabet’s autonomous driving platform, on concerns about future competition for ride-hailing companies.Uber aims to gain a stronghold in the highly promising robotaxi market through strategic partnerships. The ride-hailing giant has a partnership with Waymo, too, in this regard. By adopting this approach, Uber has avoided the massive R&D costs associated with developing autonomous systems independently. In 2020, Uber sold its self-driving division but retained focus on becoming the ultimate ride-hailing super app.Uber’s dominant market share in the ride-hailing industry also gives it a unique advantage in the lucrative robotaxi market. 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.Lyft is also aiming to be a key player in the lucrative and emerging autonomous vehicle market, highlighting the immense competition in the space. The global robotaxi market is projected to reach $45.7 billion by 2030, seeing a CAGR of 91.8% from 2025 to 2034.UBER’s Price Performance, Valuation & EstimatesShares of UBER have gained 34.9% in the past six months, outperforming its industry’s 9.5% decline in the same timeframe. Image Source: Zacks Investment Research From a valuation perspective, UBER appears overvalued. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 26.14, higher than the industry’s 18.29. Image Source: Zacks Investment Research The Zacks Consensus Estimate for UBER’s 2025 and 2026 EPS has moved up in the past 30 days. Image Source: Zacks Investment Research UBER’s Zacks RankUBER carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOGL): Free Stock Analysis Report Lyft, Inc. (LYFT): Free Stock Analysis Report Uber Technologies, Inc. (UBER): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks