Uber's and Waymo expand driverless ride services to Austin and Atlanta

Uber Technologies Inc. will be the sole app offering driverless rides in Alphabet Inc.’s Waymo cars in Austin and Atlanta, a boost to the rideshare app’s ambitions in the autonomous vehicle arena.

Beginning early next year, Uber will exclusively manage and dispatch a new fleet of Waymo’s all-electric Jaguar I-PACE vehicles, providing services including vehicle cleaning and repair, the companies said in a joint statement. Waymo will be responsible for testing and operating Waymo Driver and will provide roadside assistance and other rider support. The fleet size “will grow to hundreds over time," they said.

The move deepens the two companies’ partnership, one of a string of tie-ups Uber has struck in a bid to position itself as a platform for commercializing autonomous vehicles. It’s a departure from its past ambitious yet costly endeavors to build self-driving car technology in-house.

Shares of Uber rose 6.5% on Friday, closing at $72.48. Alphabet shares rose 1.8% to $157.46.

Waymo and Uber signed a strategic partnership in May last year, promising rides for the public starting in Phoenix. Since then, Uber has announced similar collaborative efforts with General Motors Co.’s Cruise LLC, which is also set to launch early next year, as well as with BYD Co. Last month, it also announced it was making a strategic investment in SoftBank Group Corp.-backed self-driving software firm Wayve Technologies Ltd.

“We expect today’s announcement to improve investor confidence that autonomous vehicles should expand Uber’s total addressable market rather than provide new competition, especially given Waymo has been considered a key threat," said Jefferies analysts led by John Colantuoni in a note on Friday.

Waymo recently hit more than 100,000 weekly paid rides in Phoenix, San Francisco and Los Angeles, where riders can book trips through Waymo’s own app, Co-Chief Executive Officer Tekedra Mawakana said in an interview Wednesday on Bloomberg TV.

With autonomous cars yet to win widespread adoption, Uber’s platform offers carmakers “high utilization" of expensive fleets, according to CEO Dara Khosrowshahi.

Uber can shape supply and demand, Khosrowshahi said at a Goldman Sachs Communacopia Technology Conference in San Francisco earlier this week. “During peak times you can have a hybrid network that’s partially autonomous, partially manned," he said. “We bring it to scale, we bring it all over the world and we think it’s a reason why many, many autonomous players are choosing to work with us including the leading players."

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.