Waymo leads AV race but profitability path remains unclear, BMO says

Investing.com - Waymo is significantly ahead of competitors in autonomous vehicle capabilities, but the long-term economic model for the industry remains uncertain, according to a new BMO Capital report released Monday. The autonomous vehicle sector’s evolution could significantly impact ground transportation leaders like Uber (NYSE: UBER), which InvestingPro data shows has achieved a market capitalization of nearly $190 billion while maintaining strong financial health metrics.

BMO Capital’s analysis, based on insights from a former Waymo employee who now works with policymakers, ranks U.S.-based Waymo as the clear leader in the autonomous vehicle space, followed by China’s Baidu (NASDAQ:BIDU) and Pony.ai. Amazon (NASDAQ:AMZN)’s Zoox and May Mobility trail further behind, while Tesla (NASDAQ:TSLA) lags significantly despite its recent robotaxi rollout in Austin that still requires safety drivers and support vehicles.

The report highlights that autonomous vehicles are in the early stages of proving commercial viability, with unknown costs for scaling fleets, though Moore’s Law is expected to reduce technology expenses over time. Waymo currently averages 20-25 rides per day per vehicle, compared to 15-20 rides for typical rideshare drivers, with BMO’s expert projecting this could increase to 50 rides daily at scale.

LiDAR technology remains a critical cost constraint for autonomous vehicles, with the report noting that Tesla’s camera-based approach differs from Waymo’s LiDAR-dependent system. BMO’s expert suggests cameras could potentially replace expensive LiDAR if depth perception capabilities improve significantly.

While Uber has formed partnerships with autonomous vehicle providers like Waymo, the report suggests Waymo may not need these partnerships long-term, though fully autonomous vehicles are still more than five years away from operating in most markets where Uber currently operates. According to InvestingPro data, Uber maintains a strong competitive position with 17.6% revenue growth and healthy profitability metrics. For deeper insights into Uber’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Uber Technologies Inc . (NYSE:UBER) reported the expansion of its AI data services business to 30 countries, enhancing its global technology platform for AI labs and enterprises. This expansion includes a digital task platform and a new data foundry to support AI-related tasks and model training. Additionally, Uber has filed a lawsuit against a Miami law firm and medical center, alleging their involvement in a staged car accident scam for insurance fraud. Meanwhile, New York City has finalized new minimum-pay rules for rideshare drivers, implementing a 5% pay increase, which Uber and Lyft (NASDAQ:LYFT) had initially opposed. Citizens JMP reiterated its Market Perform rating on Uber, highlighting upcoming autonomous vehicle initiatives, including a partnership with Wayve expected to begin in London by 2026. The firm also noted the potential for more autonomous service launches with companies like Oxa and Waymo. These developments underscore Uber’s ongoing efforts to diversify and expand its service offerings beyond traditional ride-hailing.

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