Trend Watch: Tesla, Uber, and the Driverless Future

Consumer buzz around autonomous driving just hit all-time highs – surging an incredible 196% year over year on the back of several exciting developments…

Chatter around robotaxis, autonomous vehicles (AVs), and the implications of this technology accelerated this month after Tesla (TSLA) CEO Elon Musk announced plans for a Tesla Robotaxi to be unveiled on August 8.

The Robotaxi will be designed from the ground up for autonomous driving without any pedals or steering wheel – marking a significant development in Tesla’s efforts to create a fully autonomous ride-sharing service.

This unveiling is part of Tesla’s broader strategy to advance its Full Self-Driving (FSD) capability and to move towards vehicles that can operate as fully autonomous taxis, potentially generating income for their owners by giving rides on their own.

Tesla also slashed the price of its monthly Full Self-Driving subscription in half shortly after its Robotaxi announcement, further driving consumer interest.

As this autonomous driving “mega” trend unfolds, several big names stand to benefit. The chart below showcases a few on our watchlist:

Other than Tesla, you’ll find Lyft (LYFT) and Uber Technologies Inc. (UBER) topping the list – both of which have launched robotaxi services within their ride-hailing apps in select cities. And then there’s Alphabet (GOOGL), which has a direct stake in AV tech through Waymo.

But there’s one company on this list we’re most excited about – and that’s Uber.

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UBER Levels Up

Uber is set to play a big role in the autonomous future of mobility because its industry-leading scale offers immense value to AV players. It currently has 10 partnerships shaping the AV mobility, delivery, and freight ecosystem, including projects with Waymo, Motional, Aurora, and Volvo.

The AV space could significantly expand Uber’s market by increasing vehicle supply and rider bookings. Lower fares may also lead to an increased consumer base, higher customer engagement — and absent driver costs, greater profitability.

After launching self-driving car rides in October 2023, Uber Eats and Waymo launched an autonomous food delivery service in Phoenix this month as part of a multi-year collaboration.

With Waymo’s ride-hailing also available in Los Angeles and San Francisco, these cities are logical candidates for driverless Uber Eats expansion. In addition, Uber Eats has teamed up with several robotics companies on autonomous driving ventures including Cartken, Motional, Nuro, and Serve Robotics.

(The Uber Eats robots that have been delivering food in Tokyo since March, for example, were made in partnership with Cartken.)

How does Uber stack up against peers right now, according to LikeFolio data?

Uber is the largest player of the “delivery” names, commanding nearly 60% of the consumer mindshare compared to Lyft, DoorDash (DASH), and Instacart (CART).

Uber also leads all other peers in the all-important Consumer Happiness metric at 54% positive. That’s impressive, considering it also commands the highest mention volume.

And Uber web traffic is growing 5% year over year, trailing just behind newly public Instacart’s +15%:

Uber is the clear leader in last-mile logistics. Our conviction on this hasn’t changed.

In fact, we see a nice bullish setup emerging as mentions grow 41% year over year (another sign consumers are still prioritizing experiences), and the stock trades ~7% off February highs.

What we’re watching NOW is potential competition from – or even a partnership with – a competent Tesla…

Will It Be UBER vs. TSLA or UBER + TSLA?

Potential partnerships between companies like Uber and Tesla could leverage their combined strengths to accelerate the adoption of autonomous vehicles. We are not ruling out a potential merger of the two companies.

Additionally, new business models could emerge, including logistics, autonomous deliveries, and vehicle leasing programs, expanding the market reach of these technologies.

As Uber and Tesla push forward in the autonomous driving arena, the implications for market dynamics are profound. Both companies are well-positioned to capitalize on the transition to autonomy, potentially reaping significant rewards as they help shape the future of transportation.

This ongoing development in autonomous technology is not merely a technological upgrade but a fundamental evolution in our transportation paradigm, promising significant investment opportunities and a reimagined global transport ecosystem.

📅 Full AV Report Drops TOMORROW with 3 Small-Cap Picks

With any paradigm-shifting “mega” trend like autonomous vehicles, there are established winners like Tesla and Uber – and there are up-and-comers just waiting for their breakout moment.

We’re talking about under-the-radar players Wall Street hasn’t even heard of yet. The tiny companies that could see explosive growth as AV adoption spreads.

Tomorrow, our MegaTrends subscribers will get their hands on three such picks – one that’s trading for just $1 – with the release of the April MegaTrends Report.

Go here now to make sure you’re on the list.

Until next time,