Uber Vs. Tesla: The Diverging Roads to Robotaxi Dominance

On Wednesday, Uber Technologies (NYSE:UBER) unlocked Dallas as yet another city available for robotaxi rides, owing to its partnership with Avride, a subsidiary of Nebius Group (NBIS) using Hyundai’s Ioniq 5 EVs. Just a week ago, Uber expanded its robotaxi availability in Abu Dhabi by partnering with WeRide (NASDAQ:WRD) using its GXR fleet.

As Uber is building its Level 4 autonomous driving ecosystem with partners,Tesla’s (NASDAQ:TSLA) robotaxi service is progressively opening up, from California and Arizona to New York, Texas, Florida and Nevada.

Year-to-date, UBER stock is up 44% while TSLA has only gained 16% value after the slump between February and April. But beyond stock prices, and the recent TSLA boost gained from Trump’s robotics push, which economic model is likely to prevail between the two companies?

Uber’s Automation Drive Examined

In addition to the aforementioned Avride and WeRide, Uber is automating its ride-hailing network with Aurora, May Mobility, Lucid Group (together with Nuro), Momenta, Motional, Pony.ai, Waabi, Wayve and of course its largest partner – Alphabet’s Waymo.

Binding them all is Nvidia’s Drive AGX Hyperion platform, utilizing the Nvidia DriveOS operating system alongside its Level 4 full-stack software Nvidia Drive AV. In other words, Uber is investing in orchestrating an ecosystem rather than owning one.

In the absence of in-house hardware pipelines and vertically integrated manufacturing, this approach keeps the global robotaxi scaling costs light. In turn, this creates a momentum building on the company’s ride-hailing dominance across 70 countries and over 189 million monthly users as of Q3 2025.

In 2024 alone, Uber completed 11.2 billion trips. This is a solid basis for data-feeding needs. Through its existing Level 4 partnerships, Uber aims to collect over 3 million hours of robotaxi-specific driving data within Nvidia’s platform.

Moreover, Uber’s business model continues to be highly successful judging by latest Q3 earnings. The company’s gross bookings increased by 21% YoY to $49.2 billion, having increased trips by 22%. Overall, Uber’s net income increased to $6.6 billion in Q3 across its mobility, delivery and freight divisions, representing a 154% increase from the year-ago quarter.

At the same time, Uber is beholden to licensing agreements to facilitate autonomous driving, mainly from Waymo.

Supplier Risk in Uber’s Autonomy Strategy

At a glance, it may seem incongruent that Waymo is competing with Uber’s other partners. Likewise, Uber’s competitor Lyft also uses Waymo for autonomous ride services. However, Alphabet is building Waymo’s business model as universal AV infrastructure rather than a vertically integrated moat.

Waymo’s long-term bet is to sell autonomy as a licensable platform. This approach reflects Alphabet’s other platform – Android. As smartphone manufacturers plug into the Android stack, it gains proliferation. In the same way, Waymo is less concerned about competition but more with achieving the broadest possible deployment footprint across metropolitan areas.

In other words, Uber’s reliance on Waymo is simultaneously a strength and a weakness. Although Uber gains immediate access to high-safety and high-reliability robotaxi capabilities, avoiding associated R&D costs in the process, the company is beholden to licensing agreements.

Right now, we see the following dynamics:

• Waymo is leveraging Uber to gain maximum distribution exposure owing to Uber’s ride volume it cannot replicate on its own.
• Uber is leveraging Waymo to rapidly build up momentum ahead of its primary robotaxi competition – Tesla.
• Uber is hedging dependence by diversifying its AV infrastructure layer with partners outside Waymo – preserving its bargaining power.

Long-term, however, as autonomous driving becomes more common, safer and cheaper, Uber could face a differentiation problem as just another ride-hailing app running someone else’s operating system. Of course, at some point, Waymo could also increase pricing power or become more selective about platform partnerships, putting margin compression on Uber’s autonomy licensing fees.

After all, Waymo is part of Alphabet, the holder of the largest app ecosystem. On the other hand, Tesla’s robotaxi model is “cleaner”, if executed properly.

Does Tesla’s Approach Have Better Fundamentals?

Unlike Uber, Tesla is vertically integrated. The company’s revenue flows from both EV sales and direct software purchases and subscriptions. Moreover, Tesla is not even beholden to Nvidia’s Cosmos as a physics-based simulation platform to generate synthetic data.

Instead, Tesla is using both real-world feed from sold EVs and synthetic data for faster scaling. Yet, it is still unclear if this will yield better performance in the long-run. Although Waymo uses Nvidia chips, its self-driving capability is powered by the End-to-End Multimodal Model for Autonomous Driving (EMMA) as an extension of Google’s impressive Gemini.

As of September safety data reported to the NHTSA, it appears that Waymo’s EVs are safer. Specifically, by dividing crash figures by miles driven, Tesla’s robotaxi delivers one crash per 62,500 miles, while Waymo crashes once per 98,600 miles. The difference is even more significant when accounting for the fact that Waymo doesn’t have human supervision.

Further, it is not clear if Tesla even properly reported its crashes. Simultaneously, no other company has churned so much driving data to be utilized by its purpose-built neural network architecture. Assuming that safety issues are ironed out beyond the latest FSD 14.2 release, by owning both vehicles and the full self-driving (FSD) stack, Tesla has a clearer path toward monetization.

One push in that direction is FSD licensing itself to legacy automakers. In late November, Elon Musk pointed out these companies remain reluctant to make such moves.

“When legacy auto does occasionally reach out, they tepidly discuss implementing FSD for a tiny program in 5 years with unworkable requirements for Tesla, so pointless.”

The implication is that legacy automakers could be left in the dustbin of history, if Musk executes Tesla’s robotaxi transition. According to Cathie Wood, such a shift would bring Tesla an annual revenue of $756 billion by 2029.

The Bottom Line

While Tesla is building a long-term product, Uber is building a ride-sharing ecosystem. The risk for Uber is to have its business model become a margin-constrained front-end for other’s autonomous driving technology.

Tesla’s robotaxi push is more capital-intensive and riskier, yet it promises unmatched leverage if it crosses the safety milestone in a decisive manner. To put it differently, Uber currently leads on distribution, Waymo leads on safety, and Tesla leads on integration.

But if Tesla’s safety profile and FSD data flywheel consolidate into a single, superior stack, its closed-loop model could emerge as the dominant robotaxi force. In the end, it may be prudent to have a diversified exposure to the emerging robotaxi sector, with these players likely to dominate it.

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