General Motors’ GM self-driving unit, Cruise, is set to start offering its autonomous vehicles (AVs) on Uber Technologies, Inc.’s UBER platform beginning next year, in an effort to revive its robotaxi business. This multi-year partnership will give Uber riders the option to choose a ride in a Cruise AV. This partnership with Uber isn't GM’s first venture with a ride-hailing company. In early 2016, GM invested $500 million in Lyft, intending to develop a fleet of autonomous vehicles accessible via Lyft’s app. However, GM ultimately chose to launch its own vehicles and network through Cruise.
Since October 2023, Uber has been featuring driverless cars on its platform in Phoenix through a partnership with Alphabet Inc.’s GOOGL Waymo, which operates around 700 vehicles and is currently the only U.S. company providing uncrewed robotaxi services that charge fares.
After a major accident in San Francisco last year, Cruise halted its operations but has been working to return to U.S. roads. Earlier this year, Cruise resumed testing with safety drivers in Phoenix, Dallas, and Houston to demonstrate the safety of its vehicles to state and federal officials. Recently, the company agreed to recall nearly 1,200 robotaxis due to hard braking issues, which prompted the U.S. auto safety regulator to close its investigation into the matter. Per a Cruise spokesperson, despite the recent recall, the company remains committed to relaunching its own driverless ride-hailing service and app. GM currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cruise’s collaboration with Uber comes as Tesla, Inc. TSLA prepares to reveal delayed plans for a robotaxi product in October amid declining demand for electric vehicles. The commercialization of AVs has proven more difficult and time-consuming than initially anticipated, primarily due to the complex technology, high investment costs, regulatory scrutiny and federal investigations involved.
In 2020, Uber sold its own self-driving unit to cut down on cash burn and concentrate on its core services, such as ride-hailing and food delivery. Trips by self-driving vehicles on Uber's platform increased sixfold in the June quarter compared with the previous year, thanks to partnerships with companies like Waymo and the startup Waabi for freight services. Meanwhile, Waymo, a competitor of Cruise, announced that it is already delivering 100,000 paid robotaxi rides per week in U.S. cities like San Francisco, Phoenix and Los Angeles, and plans to expand to Austin, TX.
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