Autonomous Vehicles Accelerate

Autonomous Vehicles (‘AVs’) have rapidly shifted from hype to help. Long touted as a transformational technology, AVs have often been discussed with uncertain timelines for adoption. But recent breakthroughs from Waymo and Uber show accelerating usage and growing profitability—key signals that AVs may finally be here to stay. With momentum building, your next ride could be driverless.

The promise of autonomous vehicles is playing out much quicker than expected. Just two years ago, Cruise CEO Kyle Vogt predicted that “within 10 years, driving is going to be a hobby.”¹ It appears he may have been eight years too pessimistic. Some Waymo riders have already experienced the switch, with the company recently noting they delivered over 200,000 autonomous rides per week in the month of February.² The AV industry appears to be entering the long-anticipated “hockey stick” inflection point—when early adoption tips into mainstream acceptance—long hoped for by technologists, users, and investors alike as growth rates surge. What was once a speculative future is becoming a present reality

Waymo, an Alphabet subsidiary, has led the charge in commercial AV deployment. Since the company’s 2023 debut of an invite-only AV service in a geo-fenced area of San Francisco, Waymo has scaled operations while improving its performance. Today, the company operates its service to the public across four major metro areas, with Austin, TX being its most recent launch. The company points to significant safety benefits as a key reason why its offerings are succeeding: in its first 7 million rider miles, Waymo vehicles were involved in 85% fewer injury-causing crashes than traditional human-driven cars.³ For investors, the combination of safety improvements and geographic expansion may be reason to cheer.

Uber is also benefiting from the deployment of AVs – and it’s doing so in partnership with Waymo. With 170 million monthly active riders (according to company filings), Uber has the world’s largest on-demand transportation user base.⁴ That scale is now being leveraged to accelerate AV adoption. A recent partnership gives Waymo access to Uber’s platform and riders, and the results are promising. According to YipitData cited by Bloomberg, Waymo robotaxis accounted for about 20% of Uber rides in Austin. Speaking to the advantages of leveraging Uber’s rider base, Waymo completed 80% more driverless rides in the first 27 days in Austin than it did during the same period in San Francisco, as shown in the chart below.

Chart courtesy of Bloomberg⁵

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That surge in demand, combined with the cost efficiencies of AVs, contributed to Uber reporting its highest-ever operating margin in its Mobility segment, according to its latest disclosures.⁴ The combination of a proven safety track record, growing public knowledge, and vast expansion of active riders has allowed Waymo’s partnership with Uber to benefit both companies.

Autonomous vehicles may be on the verge of their mainstream adoption. Industry executives have promised for years that the technology was right around the corner. Now, it seems the technology has arrived at its destination. Waymo’s AV-equipped cars are expanding to new cities and gaining adoption quicker. Uber’s passengers are increasingly opting in to autonomous rides. Both are strong leading indicators that usage, adoption – and potentially profits – are accelerating.

Endnotes:

1. https://finance.yahoo.com/news/ceo-gm-cruise-thinks-driverless-110000708.html?guccounter=1&guce_referrer=aHR0cHM6Ly90LmNvLw&guce_referrer_sig=AQAAAJ4-9VKwlypApH_FhjYAJeoeegQnIJZcYNZZgjbyGGSAWChG-Ggm0zAYLusMdS2XkQjZBQ_8LeluXd77dWhMlFsq-4CWW0ptocPCHmW7HnY1OV93XuKyqrHUoLTMMVA1StG4H358-QO9G1m84YHo0y3i_SxJFMuvoSxAfZiJV4hJ
2. https://techcrunch.com/2025/02/27/waymo-has-doubled-its-weekly-robotaxi-rides-in-less-than-a-year/
3. https://time.com/6978951/waymo/?utm_source=chatgpt.com
4. https://s23.q4cdn.com/407969754/files/doc_events/2025/May/07/Uber-Q1-25-Earnings-Supplemental-Data.pdf
5. https://archive.is/2025.04.11-143434/https://www.bloomberg.com/news/articles/2025-04-11/waymo-robotaxis-make-up-20-of-uber-rides-in-austin-data-shows

For more content by Blake Anderson, CFA®, Associate Portfolio Manager click here

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