Uber, the global leader in vehicle-hailing platforms, is facing structural limitations ahead of the era of autonomous driving. Last month, Uber's stock price rose to $93 but recently fell to around $85. After Elon Musk, CEO of Tesla, announced that he has started a paid pilot service for fully autonomous robo taxis, the market began to perceive autonomous driving technology as a real threat to Uber. Concerns are mounting that Tesla's entry may shake Uber's existing business model.
◇ Robo taxi call fee $4.2… Forewarning of Uber's collapse in competitiveness
On the 22nd (local time), CEO Musk announced that he has launched robo taxi operations in a restricted area in downtown Austin, Texas, using 10 autonomous Model Y vehicles. The vehicles have no driver's seat or steering wheel and operate solely on artificial intelligence (AI)-based Full Self-Driving (FSD) technology. The fare is set at $4.2, which is less than a third of the average Uber ride fare in the U.S., approximately $15.
CEO Musk also revealed plans for Tesla vehicle owners to connect their vehicles to the robo taxi network to generate revenue. Experts are evaluating this not as a simple hailing service but as a hybrid platform model that combines Uber and Airbnb.
Tesla's strategy does not stop at simple price reductions. It overwhelms competitors in terms of expansion speed and cost efficiency based on a vertically integrated structure from production to AI system design and vehicle operation. Tesla's FSD is built on camera-based technology rather than LiDAR, and ARK Invest, a U.S. innovative technology investment management firm, estimates that Tesla's operational cost for robo taxis will only be $0.25 per mile. This is more than eight times cheaper than the average operational cost of existing vehicle-hailing platforms like Uber, which is $2 per mile. ARK Invest analyzed that this business could bring Tesla $951 billion in revenue by 2029, and Musk confidently stated, '90% of the company's value will come from autonomous driving.'
Uber is currently partnered with 18 autonomous driving technology companies but relies on external solutions without its own vehicles or technology. It operates robo taxis in Austin and Phoenix with Waymo and plans to launch services in Atlanta within the year. Dara Khosrowshahi, CEO of Uber, emphasized that 'Uber will be the platform and partner for all autonomous driving companies,' stressing an alliance-based open strategy. However, market reactions have been mixed.
Scott Devitt, an analyst at Wedbush, an American investment bank, pointed out in a customer report last month that 'Uber's autonomous driving strategy is overly dependent on external technology, and there are clear limits to expanding without asset bases.' He also noted that 'the shock of autonomous driving will come gradually and then suddenly,' and that platform-centric Uber is facing this wave without technology.
◇ Even capturing 10% of the Texas call market would be a game changer for Tesla
From a performance perspective, Uber's situation is not bad. In the first quarter, Uber recorded $11.5 billion in revenue and $1.23 billion in operating profit. However, the compensation paid to drivers and delivery personnel amounts to about $20 billion, which constitutes a significant portion of total transactions. If Uber fails to transition its fixed labor cost structure to autonomous driving technology, Tesla's robo taxi model, which drastically reduces operating costs based on unmanned vehicles, could threaten Uber's profitability.
According to ARK Invest, if Tesla deploys 1,000 robo taxis in Austin, Texas, by 2026, it could potentially capture 10% of the region's vehicle-hailing market (approximately $1 billion). Uber's current market capitalization is around $175 billion, and ARK analyzed that the spread of autonomous driving platforms could significantly impact Uber's market share and corporate value.
However, challenges still exist for the expansion of robo taxis. Tesla's FSD has received hundreds of accident reports from the National Highway Traffic Safety Administration (NHTSA) and has not yet received formal 'fully autonomous' approval.
Nevertheless, Elon Musk is pushing strongly for the nationwide expansion of robo taxis. In contrast, Uber has yet to showcase any case of operating robo taxis with its own technology within a single city, and it has not presented a strategy to escape its reliance on external technology.
A person in the mobility industry noted, 'From Uber's perspective, even if autonomous vehicles do not overturn the market immediately, the bigger crisis is that the driver-based business model is gradually losing its foothold. Tesla's structure pulls vehicle owners into the platform, which could compel Uber, which remains a mere intermediary in the call market, to redefine its revenue model.'