Uber Technologies, known as UBER, is fully embracing autonomous vehicles by entering into a significant multiyear partnership with electric vehicle manufacturer Lucid (LCID) and autonomous startup Nuro. This strategic collaboration may significantly alter Uber’s future trajectory.
Under this fresh partnership, Uber is planning to invest $300 million in Lucid Motors and an additional substantial amount (in the hundreds of millions) in Nuro. Over time, they aim to utilize at least 20,000 self-driving taxis manufactured by Lucid, incorporating Nuro’s advanced Level 4 autonomous technology, over the course of the next six years.
This isn’t the first time Uber has ventured into robotaxis, but it is their largest direct investment in owning an autonomous vehicle fleet. Previously, they had collaborations with Alphabet’s Waymo and May Mobility in the United States, WeRide in Europe and other regions, Pony.ai in the Middle East, among others.
In contrast to previous collaborations, Uber is now planning to take ownership and manage the operation of the vehicles. In some instances, third-party fleet partners may also be involved. This marks a significant change in their strategy, demonstrating Uber’s ambition for increased control as the ride-hailing sector evolves towards robotaxis.
Uber intends to utilize the Lucid Gravity SUV for its robotaxi service, which will be fitted with Nuro’s autonomous driving technology. The Gravity’s extended 450-mile range and hardware backups make it an ideal choice for a robotaxi. Already, Lucid and Nuro have started testing these prototypes in Las Vegas.
Uber makes a big bet in a competitive market
I’m witnessing a significant stride in the realm of transportation as Uber’s latest action underscores. Robotaxis, once considered a distant dream, are now a reality, cruising on city streets. Waymo is already providing paid autonomous rides across multiple U.S. cities, while Tesla (TSLA) recently initiated a robotaxi trial in Austin, Texas.
In a scenario where the global transportation market moves towards autonomous taxis (robotaxis), Uber faces a potential risk: They could be excluded from this emerging industry. If Google and Tesla opt to provide driverless ride services exclusively through their own apps, Uber might find itself on the sidelines in the upcoming years.
In essence, Uber’s strategic alliance with Nuro and Lucid serves to bolster its control over the upcoming industry landscape. Rather than simply leasing Nuro’s technology and purchasing vehicles from Lucid, Uber is actively investing in both companies. This strategic decision can be viewed as a combination of defensive and offensive maneuvers, demonstrating remarkable foresight on their part.
Nevertheless, this business venture involves some risks. On the other hand, Nuro has had to adapt and transform itself over time. Initially, the company centered its technology around delivery robots, but due to excessive spending, it altered its approach to licensing its technology to automakers and other businesses. This deal marks a significant step in this new direction, so we’ll have to wait and see how it unfolds.
Uber’s platform advantage
In essence, it’s unlikely that Uber will surpass Tesla or Alphabet in terms of technology innovation; nevertheless, the company boasts some significant advantages. Uber has established a robust brand and is widely used by hundreds of millions of individuals worldwide on their mobile devices. Furthermore, it possesses extensive routing and pricing data from decades of operation, as well as expertise in managing vehicle supply within fluctuating demand scenarios. While companies like Waymo can create exceptional self-driving car systems, Uber already has a solid distribution network in place and knows how to manage a fleet effectively.
In collaboration with Uber, Waymo manages the vehicles and technology in cities such as Austin and Atlanta. Meanwhile, Uber focuses on the customer experience. So far, this partnership seems to be thriving, as evidenced by Uber’s statement that the typical Waymo vehicle in Austin outperforms 99% of their human drivers in terms of busy-ness.
Through the recent Lucid-Nuro collaboration, Uber is set to elevate the idea of vehicle control. This strategic step allows them greater influence over vehicle ownership. While it’s a shrewd decision, we’ll observe its effects on existing partnerships such as the one with Waymo.
A strong core business gives Uber time
Beyond its collaborations with robotaxi companies, Uber’s primary operations are performing exceptionally well at present. The company is currently profitable and producing substantial free cash flow. Simultaneously, both its ride-sharing and food delivery sectors are thriving. This prosperity will provide the company with ample time to launch and optimize its robotaxi fleet.
In the first three months of 2025, the total number of trips and revenue both saw significant increases. The total trips jumped by 18%, resulting in a revenue of $11.5 billion, which represents a 14% rise. Mobility-related revenue increased by 15% to reach $6.5 billion, while delivery earnings grew by 18% to hit $3.8 billion. What’s more, profitability metrics are escalating at an even faster rate. In mobility, EBITDA experienced a growth of 19%, reaching $1.8 billion, and its delivery EBITDA surged by 45% to reach $763 million. Notably, the company managed to generate $2.3 billion in free cash flow during the quarter, marking a 66% increase compared to the same period last year.
The road ahead
That said, the future is clearly all about robotaxis.
Developing a robotaxi fleet, even with partners involved, comes at a significant financial expense and demands excellent execution. It’s not until late 2026 that Lucid plans to start manufacturing these vehicles, and it will take some time for production to reach full capacity. During this period, competition is expected to intensify as other players in the market advance their own projects.
To put it simply, Uber is not just idling by; it’s actively investing in various areas to avoid being stranded on the curb as the industry evolves.
This deal carries certain risks, but it’s crucial for Uber as it could make them a frontrunner in the robotaxi industry. The potential rewards are substantial if they manage to pull this off. It’s advisable for investors to keep a keen eye on the company’s progress.
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2025-07-25 14:32