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Is the Uber-Waymo Partnership Coming to an End? · Autonomy Insiders

• Daniel Abreu Marques: Today with Harry Campbell. Welcome to Autonomy Insiders. I'm your host Daniel. Waymo is still the only company in the US offering paid fully driverless rides at a meaningful scale. And in Austin, in Atlanta, the only way for a rider to hail Waymo is through the Uber app under a product called Waymo on Uber. So that arrangement is the centerpiece of Uber's short-term autonomous strategy, but it's not the model that is everywhere. Welcome to Autonomy Insiders, the show where global industry leaders in autonomous driving unpack their real-world insights. In Nashville, example, Waymo just signed a deal with Lyft. Riders there can book a Waymo directly through the Waymo app with Lyft integration coming next. And in London, Uber is going in with the British autonomous player, Wayve and the Chinese operator, Apollo Go while Waymo is also entering the market independently now through its own app, the relationship looks different basically in every market. And the direction of travels matters a lot. And a couple of weeks ago, my guest today, Harry Campbell published a piece on the driverless Digest titled, Is the Uber and Waymo partnership coming to an end? And his core argument was sharp. is no longer a strategic alliance. It looks more transactional and transactional relationships have a shorter expiration date than alliances do. So ⁓ runs the driverless Digest podcast and newsletter and also the ride share guy. And he has spent last decade covering ride share from the driver's seat up and increasingly also from the autonomy stack down. there are very few people who understand both sides of the story at his depth. So Harry, welcome to Autonomy Insiders and I'm so happy to have you on today. Harry Campbell: I'm excited to be here. I've listened to I think almost every episode and so it's cool to be a guest and see all of the growth with your newsletter and podcast. Congrats, Daniel. Daniel Abreu Marques: Thank you. Glad to hear. jump directly in. So I mentioned already more or less the core claim of your article is that it shifted from a strategic alliance to a transactional relationship. Can you make the case for us? Harry Campbell: Yeah, definitely. And, you know, I think this is a topic that people have been talking about for a while. I do a lot of investor calls and this is a topic that investors obviously care deeply about when it comes to Uber's relationship with Waymo. And I think There's two ways to look at it. One would be objectively, right? So what are the facts? What are the data points? And the second would be subjectively. So we'll talk about both, but I'll try to kind of separate the two because obviously objectively, you can't argue with certain things when it comes to their relationship, right? And objectively, the product Waymo on Uber is live in Austin and Atlanta, as you mentioned, and Waymo has announced close to a dozen markets ⁓ ⁓ Austin and Atlanta markets without Uber. Right. So we can kind of talk about and read into what that means, but I think objectively they have launched a bunch of markets without Uber. They did Nashville, as you mentioned, with Lyft, Uber's main competitor, their main rival. And so I think that, you know, investors have obviously been asking a lot of questions about their relationship, right? I Waymo, I kind of like to joke that Waymo is, you know, Like I have a bar, right? It's paid driverless rides the United States, Waymo is the only company. So they're kind of the only AV player that, ⁓ you know, Uber or Lyft or anyone ⁓ partner with in the United States and kind of count in my book for now. And we can talk about the other companies, but that's sort of my bar. so ⁓ think... ⁓ That has been brewing for some time. And then when I saw this tweet from Uber's CTO, right, was basically criticizing a Waymo and covered Uber for 10, 11 years. I've interviewed, you know, Uber CEO, Dara Khosrowshahi several times and know, executives at all the companies. These guys are very professional. They don't do stuff like that. And so I didn't know the best way to kind of ⁓ emphasize strange this was. but they would never do any, especially a C-suite, especially an executive. I don't know if it's trying to send a message or just highlighting that the partnership is becoming rockier. And I really liked the way you phrased it, that it's more transactional in nature. And since I published that, think both companies have sort of been taking jabs at each other in the media. Uber released. a large AV white paper that basically highlighted the case for Uber and why they're so great for cities and other players, which I'm sure we'll get into all of that. But I think basically, I would almost change the title of my article that, is it coming to an end? that in the short term, at least it is coming to an end. I think it's less of a question and more of a definitive statement, just not less if and more when. Daniel Abreu Marques: Absolutely. And when do you think the first cracks appeared, so to speak, was there a specific inflection point? Harry Campbell: I don't know if the first cracks, I mean, think one thing that if you take a step back, right, the relationship has always been exploratory. I would say more on Waymo's side, right? Waymo has been very clear. I mean, they basically talk about it in every interview that they do that they're focused on safety. They're focused on the Waymo driver. Like that is their product. Right? You know, the vehicle maintenance, the vehicles, all of these other, the charging, all of these other areas that you and I have covered, like that's kind of not what Waymo wants to do. You think about the roots of the company, the roots of Alphabet, Google, SEO, search engines, right? It's more of a software play anyways. And so I think when you think about that, you know, the cracks kind of, don't know if there were necessarily an impetus or cracks, but I think Waymo was looking at this, hey, let's go do this product with Uber. This is the relationship we negotiated. Let's test it in two markets. We've got a bunch of other ⁓ San Francisco, Los Angeles, where we do first party operations. A lot of people don't even know that, you know, they do first party operations in Phoenix, Waymo does, but you can also call a Waymo ⁓ on Uber in Phoenix. So it's sort of like, know, kind of a hybrid market that they've had around for a while, not a lot of people know that. And so I would say the cracks maybe started to form. you know, after Waymo did this partnership with, with Uber in Austin and Atlanta. And, know, they're kind of getting the information they need. They're getting the data they need. And maybe I wouldn't say that it wasn't a success, but you know, it was an experiment. They are going to try it for whatever the con the period that the contract dictates. And, you know, I don't, I don't know what will happen after that, but I think that's kind of more the impetus for that relationship. It was an experiment. Let's see how it goes. And I think Waymo I think Waymo you know, if there was a gun to their head right now, they would say they're probably not going to do that model Waymo on Uber where you can only call for a Waymo on the Uber app like you can in Austin and Atlanta going forward. I'd be very surprised if they launched another market like that with Uber or with Lyft or with anyone. they're probably not going to do that model Waymo on Uber where you can only call for a Waymo on the Uber app like you can in Austin and Atlanta going forward. I'd be very surprised if they launched ⁓ another market like that with Uber or with Lyft or with anyone. Daniel Abreu Marques: Yeah, absolutely. before we go chronologically through all the evidence ⁓ of this deteriorating relationship, one question. If this partnership breaks down, from your opinion, ⁓ who has to lose? it Uber or is it Waymo? Harry Campbell: No. Mm-hmm. I'd say in the short term, definitely Uber because obviously, I mean, I think it's such an interesting time in the autonomous vehicle space right now because you look at a company like Uber, for example, and 99 % of their business is human rideshare, right? They're global. They operate around the world, you know, all over the United States, every single city. You can imagine in New York City alone, Uber and Lyft do 700,000 trips per day. Waymo is doing 500,000 trips per week. So they're just a fraction of the ride share market in one city alone. And so I think that ⁓ that's kind of the high level view, but what do people care about? Investors. which kind of, you know, is what's important to Uber right now. They're a public company, you know, very high market cap and a couple hundred billion dollars. And that's kind of their boss, right? Uber's boss is investors. so investors are asking, they don't care that 99 % of the business today is human rideshare What they care about is AVs. They care about Waymo specifically. I just had an ex Uber founding autonomy member on my podcast and he talked about 71 % of questions. on the earnings call these days and when he was tracking it are about AVs. So I thought that was really interesting. I've been saying 90 % of what investors care about are AVs, but maybe it's 70 to 90%. Let's call it. so I think that kind of really highlights like how important ⁓ is to investors, which then makes it. important for Uber and puts a lot more urgency on the partnerships that they land, you know, and Waymo is the only AV player in town doing paid driverless rides. So in that short term, investors clearly seem to be kind of putting a lot of stake on that relationship. You know, we'll talk about all the other AV partners that Uber has, but I mean, Uber stock is down 5%, or, you know, 10 % to start the year. Well, you know, the market is up 5%. So clearly Uber's investors aren't really buying. that narrative and all of those other partnerships, they kind of care about Wemo and they kind of care about AV rides today. Daniel Abreu Marques: Yeah, that's super interesting. And I also find it really fascinating how much vehicles are really a topic in the earnings calls. ⁓ some somehow it's also a bit because we like in the bubble and we are reading everything in the through the lens of AV. So at least me. But it's super fascinating to see. Harry Campbell: Yeah. One, right. haha Well, and also look at all the data that Uber is releasing. You know, they've got a lot of executives, you know, tweeting about their AV operations. They just released this white paper on the last earnings call or two. You know, they're dedicating a lot of time to the actual earnings call talking about AVs making the case. I think they provided a lot of supplemental data and a big PDF about AVs and you know what it's like on the Uber platform. So I don't think it takes a rocket scientist to realize that, AVs are important. right now to Uber and to investors and to everyone really, which is good for guys like you and me who are covering AVs, Daniel Abreu Marques: Absolutely. to talk about. ⁓ in your piece, also had ⁓ different kind of signals. And I want to with the longest running signal. So the data that's showing that Waymo is really eating into Uber and Lyft market share in the cities where it operates. give us a sense of what does the trajectory actually look like and which cities are the furthest along. Harry Campbell: Yeah. Yeah, well, so there's definitely I think San Francisco has been a big focal point because that's where we've seen some data from some of the credit card companies that have credit card data and provide you know, sort of market share based off of credit card data that says, you know, Waymo is, you know, equaling Lyft's market share of 20 % in San Francisco. And I think that there's been some argument over the actual numbers and the sample size and things like that. But I do think that it's pretty clear, you know, just looking at the fleet size that Waymo has, know, whether it's high hundreds or a thousand cars and markets like San Francisco and LA. I mean, you go to San Francisco and you see Waymo's everywhere. Right. I think that sometimes it's like, like looking at the data and using the data, but I also like looking, my eyes and my brain, right? What do I see? What do I feel? What, how are people talking about it? And, know, kind of ⁓ all of these different ⁓ data points where there's subjective, objective and collating. think that's kind of the challenge of analyzing and covering the industry and where you can kind of really make some good observations. And so I think when it comes to market share, I think it's actually pretty clear that for the most part, Waymo is really cannibalizing Uber and Lyft's market share. I don't think that they're actually growing the market a ton. Maybe it's a small amount, 1%, 3%, 5%, but most of the people who are taking Waymo, they're no longer taking Uber and Lyft, right? I only take Waymo. I love Waymo. The product is great. People love it. You know, there's a lot of hesitation before first time riders get into a Waymo. Once they're in though, they're hooked and they love it. I think that there's some expanding of the market, you know, for female riders who are taking maybe they wouldn't normally go somewhere late at night. Now they can take a Waymo. So I think there's some expanding of the market. ⁓ You know, maybe tourists who are coming into San Francisco, they want to take a Waymo for example But you know, I don't think a lot of people are just joyriding around in a Waymo there instead of taking an uber they're going to a location in a Waymo instead of an Uber. And so I think that's kind of what my gut feeling is. And I think what some of the data is showing. And I think that if you're and Lyft ⁓ the short term, that's a little scary, right? Because you've had this market ⁓ lead. Now people are downloading the Waymo app and ⁓ are enjoying the product. And frankly, I think it solves a lot of the challenges ⁓ we've seen with the Uber app. over the years, right? Deteriorating quality, right? When you request a ride now on the Uber app, it actually goes and pings, you know, a driver, it pings Harry, like, Harry, do you want this trip from Daniel? He's going seven miles and I have 10 seconds to think about it. Then if I don't want it, I send it to another, you know, it goes to another driver. And that's sometimes why it takes so long to match. What happens on the Waymo app though, right? You enter your destination. It says it's seven minutes away. You press request. It's an instant match. That car comes to you. There's a lot more consistency in the product. in addition to not having a driver and sort of ⁓ having a lot more privacy and that driverless experience that people love. Daniel Abreu Marques: Yeah, absolutely. I think one argument is also often brought up is that maybe like driverless rideshare Waymo is also incentivizing people to leave their own cars in the garage and then instead ride a Waymo. How do you see that? Harry Campbell: Yeah, I think that's sort of always been the promise of the ride share industry. think now people kind of refer to it more as ride hail, but I'm sticking with ride share since that's what I named my first site and that's how I'm best known. So I have a little, I'm a little biased there, but that's how, you know, Lyft was born, right? They talked about carpooling and sharing rides and you know, the companies obviously launch rides and really trying to get people ⁓ of the car. I don't think that has been. ⁓ ⁓ anywhere near born to fruition. I think that's still a possibility in the future. And I think that's the big thing with AVs. think the and Lyft busted onto the scene over a decade ago and really scaled overnight. ⁓ I think cities and folks weren't really prepared for it. And then before you know it, there's a hundred thousand drivers in New York City, for example, right? Uber and Lyft drivers and Waymo's whole fleet is only 3000 vehicles. So I actually think the potential impact ⁓ AVs on cities parking car ownership is a lot bigger. There's a lot more potential impact on ride the ride than the ride hail industry, but it's clearly gonna take a lot longer. No one's ditching their car. You know, there aren't gonna be 50 % of people don't have a car in five years, maybe in 10 to 20 years. I think that's very possible, but I think in the short to medium term, I'm pretty confident that we aren't gonna see monumental changes. Daniel Abreu Marques: sense and let's get to the next signal that we already ⁓ about a bit. So ⁓ was more or less announcing city after city and none of which include Uber. Looking at all the cities announced now, ⁓ do you think is the strategic logic behind it? We already touched upon a bit like it's an experiment, but you also said it was like a good experiment. it well with Uber in Atlanta, for Harry Campbell: Yeah. Yeah. Daniel Abreu Marques: What do you read into that kind of like city announcements without Uber? Harry Campbell: Yeah, well, I guess I might push back on myself that I don't know that the experiment went well. I think actually Waymo is seeing that, you know, people really love the product and they don't like having to go to the Uber app and there's not an AV only option, right? So you have to request an Uber X, you have to request an Uber Comfort. And if you've opted into Waymo, you might get matched with a Waymo. That's not a great relationship for your most loyal, your most valued customers that we know from the OBI data. that Waymo customers in San Francisco are willing to pay 30 % more. They're willing to wait longer, right? They really love this Waymo product. And now on the Uber app, I can't get what I want, right? And so think that's actually a good problem ⁓ Waymo to have, but it is a problem. Like, so I wouldn't ⁓ that they never should have done, it was a worthwhile experiment, but I would say the results. ⁓ Daniel Abreu Marques: Absolutely. Harry Campbell: probably weren't that great. They're probably I think Waymo is clearly seeing that, hey, we've got a bunch of customers who want to pay us more money and they're willing to wait. So I think like if you look at what they're doing in Nashville with Lyft, that's the partnership that allows them to do that, right? With, you know, Waymo, you can still book a ride on the Waymo app, guarantee yourself an AV and then on the Lyft app during certain times and certain rides and places, maybe when it's low demand on Waymo, they'll send it over to Lyft, which has way more demand, you know, overall, right? And so I think that kind of partnership makes sense. And when you think about it from Uber's perspective, especially you asked me in the short term, like Uber really needs Waymo in the short term because there aren't any other AV players. And think about how they positioned Waymo on their app, right? There isn't an AV only option because Waymo is the only game in town. I don't think Uber wants Waymo on Uber, right? Because then people will just think I'm not taking an Uber. I'm taking a Waymo right now. Why do I even need Uber? Right? So it's sort of like this. Trojan horse strategy, call it, where Waymo is getting a lot of benefit, I think, from being on the Uber app, exposing customers to ⁓ But Uber kind of wants to keep those customers on the Uber ecosystem. Waymo wants them on the Waymo ecosystem in the future. that's of where I'm seeing the relationship right now. Daniel Abreu Marques: And maybe we can also quickly stay on that theme because this was always a question mark for me because ⁓ so I don't know why is there no specific AV tier on the Uber app because in the Middle East there is an specific AV tier and there's also not so much AV players around. at the beginning it was only WeRide offering the trips through the Uber AV tier. So what's the difference? Harry Campbell: You're right. Yeah, well, I think frankly, Waymo is a much bigger competitor in the United States than Uber, right? In San Francisco and LA, it's Waymo versus Uber, right? And so I think that, you know, they're frenemies, right? They're friendly in Austin and Atlanta, but they are direct competitors in Los Angeles and San Francisco, right? There's no friendship about it in those two markets. And so I think you kind of, for Uber, you sort of want to find that balance where, I mean, you really obviously want to own the customer, right? Uber wants to own the customer, but Waymo also, kind of wants to own the customer. so I think that's where, obviously like looking back, I think you could argue that this setup never really made a ton of sense, but it's easy to say that in retrospect. So I think it was a worthwhile experiment, but I do, I'm sure that Uber probably tried to negotiate to keep it, you know, within that like UberX product and Waymo probably wanted their own. And this is the partnership that they came up with. And, you know, I would be very surprised if this Waymo on Uber type product launched in any markets in the future. Daniel Abreu Marques: All right, and we touched ⁓ on the Lyft deal in Nashville, I think or three times now. ⁓ Could you explain us what's the difference the models compared to Austin and Atlanta? So what are the main difference models? Harry Campbell: Yeah. So in Austin and Atlanta, you can only get a Waymo on Uber. That's actually what the product is called, real original Waymo on Uber. And in Nashville, you can get a Waymo through the Waymo app. So we would call that booking first party. So all of those people who really want a Waymo, they can go to the Waymo app and they can wait, they can pay more and Waymo can kind of capture like the most dedicated customers, which I think from a business perspective makes the most sense. And then you can also book. a Waymo ride from the Lyft app or you will be able to in the future. So I would imagine we don't know exactly how the partnership works, behind the scenes, but I would imagine during busy times when Waymo has a bunch of people coming to their app to book a ride, they don't send many cars to Lyft during slow to medium times. That's when they send cars to Lyft. That's when maybe they lower their prices to match Lyft's pricing. Cause that's the other thing. Remember in Austin and Atlanta, Waymo's actually cost the same as UberX cause you have to request an UberX. right? And so they're actually charging the same amount as you know, what Uber charges for a normal ride, but we know that customers are willing to pay a premium. So you're sort of leaving a 30 % margin on the table, especially during times where there's a lot of demand, right? Remember, during peak demand times, that's where prices are the highest. So that 30 % is actually even more valuable, you know, on $100 fare versus a $10 fare. So I think the Nashville I'm really excited to see how this Nashville partnership goes, because I think it makes a lot of sense. for Waymo and frankly also makes a lot of sense for both Lyft and Uber. You know, I could see, we tell on the ride share guy, we coach human drivers all the time that you should drive for both Uber and Lyft. Why should you do that? Right? Cause it increases the demand that's coming to you. Now, if you have two trips that come in, one rider is 10 minutes away and going five miles, another rider is five minutes away and going five miles, right? You get paid the same amount, but you actually only have to drive five minutes, right? So you have a five minute, you know, you can get there five minutes faster basically. And that actually allows you to increase your utilization, right? So the more demand, the better the pick here you can be, the better rides you can have, right? When you're going from a larger pool. And so I think that's basically the same situation Waymo is in. I don't know, maybe I'll make this prediction right now on your show. I don't think I've said it, but I could see a market in the future where Waymo actually you can book a Waymo ride and then you can also get a Waymo on both Lyft and Uber at some point in the future. I wouldn't be surprised if that happens in the next few years too. Daniel Abreu Marques: Yeah, so it's recorded now. this happens, you heard it here first. ⁓ now let's switch to the policy side. ⁓ Let's start with New York City. So Waymo is pushing for deployment ⁓ in New City. And Uber is publicly saying that the city should slow down to get the policy right. Harry Campbell: If it doesn't happen, let's delete the recording, Sure. Daniel Abreu Marques: Can you walk us through what's happening there and ⁓ me also whether you buy Uber's stated reasons for that? Harry Campbell: Yeah, so I think that remember, right, I mentioned how New York City is 700,000 Uber and Lyft trips every single day. So the TLC, the Taxi and Limousine Commission actually regulates Uber and Lyft much stricter in New York City than every other UberX market in the United States. So in New York City, you need a license, there's a cap on the number of vehicle licenses, I believe it's around 110,000. So a lot of drivers, a lot of vehicles, and then you also need commercial insurance. So it's sort of like It's a more professional market that you might be used to in Europe, right? Versus in Los Angeles for Uber, know, Harry, I can sign up with my own car and take people around and, know, with my own personal insurance. So that's kind of the caveat there, but it's basically to say there's a ton of opportunity in New York city. Autonomous vehicle deployment is still restricted. Waymo is pushing forward hard there in New York city and London because this is such big global markets with such a large TAM, know, total addressable market, there's a lot of revenue at stake here. ⁓ yeah, basically, ⁓ I think one of their policy ⁓ executives, Josh Gold has suggested basically, the city could should kind of slow down to get the policy right. They said that it's about worker protections and accessibility and political feasibility. And I think that there's some legitimacy to that. Uber mentioned ⁓ similar narratives in the AV, you know, kind of policy paper they just released ⁓ too. But I mean, obviously, to their credit, like Uber is doing what's best for themselves. I don't even think this should be a shock, right? Like Uber is putting forth policies that are gonna benefit Uber. you know, so I would sort of take what they say with a grain of salt, but some of the points they're making are valid, right? In New York City, are ⁓ full-time. They are professional. The last time Uber, it's a little ironic, because when Uber and Lyft... disrupted New York City cabbies, it was actually a huge blow to the industry. think close to 13 taxi drivers ended up committing suicide because of the financial strain that they were put in. And, you know, I'm not blaming Uber for, you know, those suicides, but it was a direct, you know, or part or at least partially reflective of the fact that, you know, they had medallions. Okay, maybe blame the city for setting up this archaic medallion system. They invested their life savings in it. Uber and Lyft came along, disrupted the value of medallions, the value plummeted, and then people were underwater, right? And so there's a lot to that story, but I think at a high level, like New York City, there is a lot at stake. So I think my broader point is that, know, Uber has some arguments basically against Waymo on the policy side that benefit themselves, but you know, there's probably a kernel of truth in a lot of them too. Daniel Abreu Marques: Yeah, and maybe let's stay on the driver side. So when you talk to full-time Uber and Lyft drivers in 2026, actually changing in their day-to-day? What are they telling you? Harry Campbell: Well, I mean, honestly, human drivers are not fans of AVs. They hate them. They feel like they are really, you know, kind of out there to take their jobs. And I think they're also, you know, an easy scapegoat. We've worked with Gridwise on a couple of articles, ⁓ talking about how human driver pay has fared in AV cities versus non AV cities. And like you might imagine, right, we are seeing basically, two, three to 5 % drop in human driver pay year over year ⁓ AV cities versus non AV cities and That's sort of why it goes back to my point. I think Waymo is cannibalizing the market. They're adding supply and if demand is staying about the same, it makes sense that human drivers would be making slightly less. I mean, honestly, 5 % less isn't ideal, but it's also hard. It's not a huge difference. There's a ton of variability when it comes to driver pay. Even customers have probably seen this. You compare prices on the Uber and Lyft and Waymo app and one is 20, one's 40, one's 60. There's like no rhyme or reason sometimes to pricing. So I think that's what we're seeing. on the human driver side is that they're not happy. I think they're blaming AVs for a lot of their problems. And there is some legitimate negative impact that their AVs are having on hourly pay of drivers. And I think one thing that we saw from this policy paper that, you know, Uber released last week and recently in Axios, they did bring up a good point that is Uber favorable. But I also thought, you know, I'm happy to call it out when they make a good point that there's an opportunity for regular regulatory arbitrage. in cities like New York City, Where protections and benefits are tied directly to the fares, right? So in New York City, there's actually a true minimum wage for Uber and Lyft drivers based off utilization and it's quite high, right? So basically Uber and Lyft have to keep these drivers busy or they have to pay them, you know, $25, $30 an hour, right? And so in this case, I think AV operators might actually be incentivized to go after... New York City, right? Because there's such a high Delta of what they can, you know, what human drivers are charging and making versus, know, in LA, if they're only making $20 an hour, do I want to deploy my Waymos and when competition is only charging 20 an hour or where they're charging 30 an hour, I can charge 25 an hour undercut human drivers in New York city and still, you know, be much cheaper and make more money than launching in a market like Los Angeles. So I do think if Waymo is smart. They're going to be tackling these markets like New York City, Seattle is another one, basically where regulatory regimes have kind of inflated driver earnings, you know, trying to protect them. And so that's sort of where it's up to the policy makers, you know, to kind of realize that, Hey, this is something to keep an eye on. And, you know, so probably not a surprise that Waymo was highlighting that, or sorry, that Uber is highlighting these, these cities as something to watch out for. Daniel Abreu Marques: Yeah, absolutely. And now you touched already on the Uber policy white paper. So you already gave us some idea of the content, but could you also walk us through the core arguments from this white paper? Harry Campbell: Yeah, I mean, I think that, you know, I've been pretty critical of Uber not doing enough to address the impact of AVs on drivers. Obviously, kind of, you know, my standing in the industry to all of the Uber and Lyft drivers that, you know, we've been covering the industry for over the past 10 years. But I do think that. ⁓ I talked about that urgency that Uber has now, right? Because of investors and what investors are asking and talking ⁓ when it comes to AVs. And so I think they've got, they're of no holds barred, right? They're doing everything they can on the partnership side, releasing policy papers, trying to address ⁓ all these various issues. And so they basically talked about in this paper, ⁓ all the potential issues, including job displacement, congestion. ⁓ ⁓ accessibility, and even safety as the company pushes for, you know, broader robotaxi adoption and some of these areas, they're more aligned with Waymo and others aren't, right? I think they highlighted, for example, another area where, know, autonomy ⁓ basically, you know, Uber is available everywhere, right? This was a big fight that I saw on the media recently with Uber and Waymo. called out, Uber called out or tried to call out Waymo and say, you you operate in San Francisco, but you don't operate, you know, in Oakland, which is a lower socioeconomic area. And I think they said it was because they could, but I think they actually technically haven't been permitted there, right? So that's sort of where I think the gloves are off, right? And now they're kind of duking it out a little bit in the media. I think the gloves are off, right? I think that's actually one area where I think Uber has a point, right? We talked about that, you know, AVs, they're going to operate in the areas where it's most profitable, right? In the core dense areas, you know, we know as human drivers, I don't want to take a trip out to the middle of nowhere. I don't want to serve a more rural area because I can't make as much money there. And it's probably not a great thing for Waymo PR and marketing to say that, that we only want to focus on the rich people in cities, but that's kind of the reality of making a profitable business. Uber actually does provide some service to those areas, but I actually would push back and argue that they shift a lot of the burden and the risk. So it's kind of ironic to drivers, right? It was kind of ironic to see me hearing Uber saying that Waymo doesn't do this. And I'm thinking to myself, Uber just sends me a trip out there and yeah, it's sort of on my own to take it, but like they're not guaranteeing me a trip back. And so, you know, a lot of times the less savvy drivers, they don't realize that, I take a trip an hour out. and then I get out there and I can't get a trip back and I'm like, oh, maybe I shouldn't have taken this trip or, you know, I wouldn't say they're taking advantage of drivers, but I do think that there are certain trips that Uber would never do if they own the fleet and they sort of push on to individual drivers who may not be as savvy Daniel Abreu Marques: And in your article, you also floated in another idea. So you that Waymo could also aggregate Uber and Lyft drivers onto its own platform to solve for peak demand. So how ⁓ realistic is And ⁓ what would take for Waymo to that? Harry Campbell: Yeah. Yeah, I think this is the first time I've sort of mentioned this idea. So it's an early kernel of an idea. So again, you know, I think in this specific post, I try not to speculate too much, but I do think sometimes it's helpful to put ideas out there and, you know, sort of have them tested to see if it's viable or not. And I think the narrative up until now is that Waymo needs to be on the Uber or Lyft app, right? I mean, that's what we saw with the product in Austin and Atlanta. Waymo has to come to Uber. even in Nashville, right? You can call a Waymo, but Waymo goes on to the Lyft app. And I sort of started thinking to myself, if people love Waymo so much and their opportunity is that everyone wants to come to them, why doesn't Uber have to come onto the Waymo app? Right? I mean, I could see that maybe it's, there's a tipping point in the future where Waymo is generating so much demand. And so I think a lot, maybe, you know, basically Waymo would have to grow their market share in a market much stronger and then maybe Lyft. would come onto their app and that's a beneficial partnership for both sides. But yeah, I sort of floated that idea because I think it's a possibility just because of the way people love the Waymo product. I think the big counter argument to that is that I don't think Waymo really wants to be. ride hail company. mean, I think they've got the first party operations. But know, when you talk when you hear their executives and their CEOs do interviews, they talk about getting the Waymo driver into every vehicle on the road, you know, making the world safer. And so I think that their larger ambitions are beyond the ride hail market. So while they could do that, I think to them, ride hail is kind of the ride hail market is kind of like the first major pit stop on getting to every vehicle in the road. so unless it helps. that goal directly and them grow. don't know that they really, you I could see them doing it, but I could also see them not doing it just because it's not like a core focus of the. Daniel Abreu Marques: Makes sense. And also talked a lot about Lyft now. And think Lyft has also been treated as the loser of this whole AV story for some time. But the Nashville deal, I think, changes the narrative, at least a bit. ⁓ Also, positioning with flex drive. So is Lyft now structurally better positioned than Uber on AVs? Harry Campbell: Hmm? Yeah. I wouldn't say that they're better positioned. And I mean, I think there were a lot of valid questions when Uber was announcing all of these partnerships when they had Waymo. And I was sitting there thinking to myself, like, I'm really surprised that Waymo hasn't done something with Lyft, right? Because even though Lyft is a fraction of the market cap of Uber and they might be one third market share to Uber's two thirds market share, you know, in a lot of these new cities, Waymo is much smaller than both Uber and Lyft. Right. And so you really, you don't need the demand of an Uber. You kind of just need the demand of a Lyft right? You just need the two X, three X, five X demand that you can backfill some of your rides. And so, you know, I sort of, ⁓ I guess I was pleasantly surprised when Waymo with Lyft in Nashville. And I do think, know, you had John, from flex drive, ⁓ on your podcast and he made a lot of good points. Lyft has definitely been banging the drum ⁓ on flex because they do own and operate 15,000 cars. ⁓ And Uber actually doesn't own a single vehicle in their fleet. So was interesting to see that, you know, when Uber does ⁓ with Waymo ⁓ fleet or vehicle operations, they don't own any cars. They don't know anything about that. So they outsource it to a partner called Avomo right in those two markets. So it's sort of ironic that, you know, they're partnering there. And ⁓ think it's a benefit, but I don't know that there's a ton of synergies on just because you can call a ride or you will be able to call a ride on the Lyft app, a Waymo ride on the Lyft app in the future. I don't know that there's a ton of synergies to also having FlexDrive, right? I think both are valuable on their own, but they're kind of mutually exclusive, right? Lyft has FlexDrive and that's a great. option for Waymo to partner on the vehicle operation side, but I don't know that there's a ton of benefit on the customer side also. Maybe there's some when it comes to finding or retrieving lost items, but I think it's, you know, more limited in, you know, kind of synergies, I guess you'd say. Daniel Abreu Marques: And also you mentioned that doesn't own vehicles ⁓ the way Lyft or does. But now you increasingly see an announcement where they say they will buy the vehicles from their OEM partners, like Lucid, for example. So what's your take on that? Harry Campbell: Yeah. Good point, yeah. Yeah, that's a good point. I think I might need to hedge my statements in the future. They don't own any vehicles now, but they are on the path to owning vehicles. And I think it's sort of, again, shows you that urgency that they have. This is a company that has scaled to millions of rides per day and they've never owned a vehicle. I think AV is such, they feel it's such an existential threat that they need to actually flip that model on its head and actually agree ⁓ ⁓ buying some of these AV vehicles to support their partners and think about it. ⁓ I would say probably to 20 times a week people reach out to me and say, hey, Harry, you we'd love to get your help partnering with Uber. And I'm like, great. I don't really know that many people at the company, but you know, there's obviously a lot of value in a partnership with Uber, right? So that was kind of step A, right? Partnering with Uber maybe allows companies to raise more money and maybe allows them to grow, right? just having that partnership on paper has always been beneficial. And then when it comes to the AV side, so they they launched all the or they announced all these partners, then they started investing, right? I think you've done some great coverage of all the investments that they made. And, you know, I can't even name, you know, nuro waabi right, all of these different companies that they're Lucid that they're investing, you know, and not chump change $100 million. hundreds of millions of dollars, right for them. I mean, they made $3 billion last quarter. So it's a small, I think it's kind of a measured bet. But I think on its own, it's a lot of money that they're investing. Now, they're taking it one step further, they're partnering, they're investing, and now they're buying, you know, cars from some of their partners to or agreeing to buy ⁓ cars from their partners. So I think it just, again, kind of goes to show you where does Uber benefit. It's great to have Waymo and AVs on their platform, but the value that they derive is from aggregating supply, right? They're so valuable because they have a variable supply of millions of human drivers around the world. And in the future, if they've got five AV players on their app, you have the best reliability, you have the best system, right? is launching the Hyundai IONIQ. Waymo is gonna be on the Hyundai IONIQ soon in the future. How does Waymo stand out from Uber? If you can get the same car on Uber app, but it's better, it's cheaper, it's more reliable, it's faster ETA, I think at that point. that's sort of where, you know, I don't know that it's like a huge groundbreaking revelation, but that's kind of why Uber is and partnering and, you know, buying all of these cars from all their partners, because they really need a fragmented market. And, you know, right now Waymo is the only game in town. but maybe in a few years, there'll be others. Daniel Abreu Marques: And do you also think because they're investing heavily, as you mentioned, that Uber could one day actually win this fight by acquiring one or two AV players and then have their own kind of solution? Harry Campbell: I mean, I don't know that they actually need to acquire one or two players because I think that, like I said, I think they'll benefit greatly from multiple AV players. If they have one, sometimes it actually introduces challenges, right? If I'm a, know, if you have your own AV option, call it Uber AV, right? That's the company that you own and you've got 5,000 vehicles and you want to partner with Zoox and you want to partner with others. How do I know I'm getting a fair shake on the Uber app? right? You're probably going to favor, mean, probably going to favor your own car. So for me, they're probably going to get the best deal. So maybe I'd say, Hey, you know what, I might not want to partner with Uber. Maybe I go over here to Lyft, right? And so I think that's kind of where you have to be a little bit careful. You could even argue that maybe Waymo made a bit of a strategic mistake by, know, maybe they want to continue, you know, maybe they should have given Uber a little bit more love than Austin and Atlanta, because I think Daniel Abreu Marques: Sure, yeah. Harry Campbell: You could even argue that maybe Waymo made a bit of a strategic mistake maybe they should have given Uber a little bit more love Austin and Atlanta, because Uber is seeing that, this Waymo relationship isn't going so good. I think they're going to be investing even more in these AV partners, even ⁓ more these AV players, right? Cause they have to because their relationship with Waymo is so rocky. Uber is seeing that, man, maybe this Waymo relationship isn't going so good. I think they're going to be investing even more in these AV partners, even more in these AV players, right? Cause they have to because their relationship with Waymo is so rocky. If Waymo had, you know, 10,000 cars and three, 5,000 on Uber's network, I think they could be a lot more. You know kind of take it a little easier when it comes to all of their other relationships with other AV companies because they have such a strong Foundation with Waymo. So it's sort of I think analogous to what we see in the chip space, you know I know you did a great episode on chips that I featured on my podcast, but I'm not an expert in chips But you know, I've seen people talk about right if we sell our best chips to China They use them if we don't they're gonna have to develop them on their own. And so I think it's kind of that same concept that we see play out here. And it's a tricky, you know, I'm not sure what the best answer is. It's a tricky one. People get paid, you know, a lot of money to figure this out. And, you know, I just get to comment on it. Daniel Abreu Marques: Yeah, absolutely. what do think trigger a really clean breakup? So is there a specific event or metric or that we should watch out for? Harry Campbell: I mean, it seems like it's trending towards a clean breakup. mean, obviously, I try not to speculate too much, but it is fun to speculate about the Uber Waymo relationship. And I think this AV policy paper was, didn't say Waymo in the paper, but when you talk about RoboTaxi networks and what you can do better than them, and Waymo's the only one, ⁓ you can read between the lines. think there was a comment in ⁓ Lee did a piece on Business Insider about the Uber Waymo relationship, and I think they grabbed, executive talking about the Oakland, Waymo not Oakland operating in Oakland situation. And then I think even Waymo folks are now sort of starting to comment on this relationship. So it does seem like it's kind of trending in the wrong direction. But again, I think that's more of a short-term thing. think medium to long-term, I do think there's value in Waymo partnering with Uber and Lyft and vice versa. I think they solve some of these problems when it comes to utilization. of course, know, Uber needs AV players. But yeah, I mean, I guess if we were hypothetically taking it to the extreme, you know, Waymo partners with Lyft going forward and Uber partners with every other AV company and, you know, it's Waymo and Lyft versus Uber and every other AV. We'll see. Daniel Abreu Marques: Yeah, let's see. And maybe maybe one last ⁓ speculation before we end. So five prediction. state of the US robotaxi market 2031. Who's operating at what scale? What role has Uber? Harry Campbell: Well, yeah. Yeah, no, I think five years will be probably one of the most interesting inflection points because I think we're going to see probably to six AV that are kind of on par ⁓ with level of safety. And I don't know if they'll be at Waymo's scale ⁓ by but I do think that, ⁓ you on the one hand, Waymo has done an amazing job scaling and growing up to 500,000 trips per week, 3,000 vehicles. On the other hand, they're only at 3,000 vehicles. Zoox has talked a lot about, mean, they're backed by Amazon. They've got this purpose-built vehicle. They've mentioned many times that their facility can produce up to 10,000 vehicles per year. So even if we say Waymo is at five or 10,000 vehicles in the next few years, Waymo be, or Zoox could potentially get to number. So I think that five year inflection point next one to two years, I think we'll see some more players we'll see, but it might be the limited scale, dozens of vehicles, hundreds of vehicles. I think what other competitors can get to thousands of vehicles. And if Waymo is only at 5,000 or only at 10,000 vehicles in their fleet, that's where I think that, you know, I might start to get a little bit worried if I'm Waymo at some point, you got to pour gas on the fire because then Waymo is a great product, but if all their cars are Hyundai IONICS and you know, I can't get a ride during busy times and I have to wait 15 to 20 minutes and pay a big premium or I can pop over the Uber AV app and I can get a MOIA buzz. I can get a Hyundai IONIC from Motional. I can get a Hyundai IONIC from Avride. I can get a Zoox that's kind of a cool vehicle, right? I all these different options at a better ETA, know, lower pricing because of the higher utilization. I think that's sort of where that five ⁓ period, I it'll be quite competitive. from kind of a unit economics and commercialization point of view. Daniel Abreu Marques: Yeah, absolutely. And yeah, it's also good for us, for the two of us. So we have, I think, a lot to cover in the coming years. so we're at the end. Harry, this was exactly the conversation I wanted to have. So ⁓ thanks for coming on Autonomy Insiders and for everyone listening. You can Harry's work at the driverless digest and also at the ride share guy. I will include links in the show notes to both channels. And Harry, thanks again. We have to do this again in six months or so and see which way the signals are pointing. Harry Campbell: Definitely. No, I appreciate you having me on and I think ⁓ there's a lot going on in the United States as also in Europe. So I think before I come back on, we'll have you on my podcast to talk about all the developments on the robotaxi side in autonomous vehicles in Europe. And yeah, look forward to continuing the conversation. Thanks everyone for listening. Daniel Abreu Marques: Sure, let's do this. you, Harry!