General Motors’ announcement to wind down its Cruise Robotaxi division sent shockwaves through the market, causing shares of ride-hailing companies like Uber and Lyft to fall. Analysts at Bernstein expressed concerns that this move will negatively impact the autonomous vehicle (AV) market.
GM’s decision to integrate Cruise’s technology into its personal vehicle systems casts uncertainty over Uber’s previously announced AV partnership with Cruise. This could shift the financial burden of AV development onto Uber, making it an “unrealistic and undesirable scenario” for the company at this stage.
Analysts also highlighted the challenges of operating and maintaining robotaxi fleets, as well as the significant capital required to scale such networks. The winding down of Cruise disrupts the AV partnership ecosystem, consolidating the market further and creating uncertainty for Uber’s AV ambitions.
Investors are concerned about Uber’s potential exposure to the risks and costs of autonomous technology development in the wake of GM’s decision. As a result, shares of both Uber and Lyft fell sharply. At the time of writing, Uber shares were down 4.43% at $62.09, while Lyft shares were down 3.97% at $15.55.
The sell-off reflects investor concerns about the risks and costs associated with autonomous technology development. Companies like Waymo and Tesla continue to scale despite high costs, but now face less competition in the market.
Source: https://www.benzinga.com/24/12/42447067/uber-and-lyft-are-falling-wednesday-whats-going-on