The expansion of autonomous vehicles (AVs) and robotaxi services could pose a threat to rideshare operators Uber (UBER) and Lyft (LYFT).

TD Cowen Internet and Media Analyst John Blackledge joins Catalysts to give insight into the potential partnerships between rideshare companies and autonomous, self-driving vehicle makers.

Blackledge elaborates on comments from Lyft and Uber CEOs about their excitement for partnering with AVs:

"They have the matching and routing technology for both companies. Big customer bases matching and routing, the payment systems regulatory expertise, and that can drive higher utilization for AV partners over time, and I think [Uber CEO] Dara [Khosrowshahi] mentioned, he thought AV could expand mobility marketplace with lower pricing, which would spur higher adoption, and Uber in particular has the partnership with Waymo in Phoenix."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video Transcript

John, I want to talk to you first just about Uber and more specifically the stock reaction that we're seeing, we've got shares down nearly 8% given what you had just laid out there a moment ago is then the selling that we're seeing today a bit overdone.I I think, I think it will ultimately be overdone.Um and, but, but I I kind of understand it, you know, it's been a great stock over the last year.Um so expectations are, you know, fairly high and so with a little bit of a of a Miss uh at one Q and, and as I, as I mentioned, the two Q guide on a reported basis, a little bit softer, you know, you get this kind of reaction, but like I said, I mean, the the core just underpinning fundamentals of the business remain strong.And so I, I do believe it's a bit of uh a bit of an overreaction.Well, John, I know that both Lyft and Uber were asked about the potential risk to ride sharing companies that autonomous vehicles pose particularly given some competition from Tesla.Of course, both CEO sounded pretty optimistic though.So let's listen in, I get excited about autonomous cars because I think great, it's gonna be another way for people to get around.You know, you can sort of think of it as another car that we could, you know, run uh into our network.If you're an A V fleet owner or you are an individual owner of a car, whether that's a Tesla or another kind of car, you're just gonna make more money and make a higher kind of return on your investment if you plug in your A vs into uh the Uber ecosystem and into Uber demand.So um you know, we think we bring a lot to the table, we're looking to partner with the A B industry.So John, is it that easy that this can just be a partnership?Yeah, yeah, they, they both kind of mentioned the partner approach and like if you think about it for Uber, right?They have the huge customer base, they have the matching of routing technology for both companies.The customer base is matching a routing, the payment systems, regulatory expertise.Um And that that can drive higher utilization for A B partners over time.Um And I think Dara mentioned like also um he thought A V could expand uh mobility marketplace uh with, with lower pricing which would spur higher adoption.Um And Uber in particular has the partnership with Waymo uh in Phoenix and they are expanding A B partnerships on the East Side as well.I think just the reality in my view uh as relates to A B is that the headline probably headline risk probably won't uh match the time it's gonna take uh to fully scale the technology.And as it scales, Uber will be the most scaled partner globally on mobility for A for potential A B partners and then a leading one, potential partner in delivery and Lyft will certainly be able to partner uh in the US and Canada, those are the two markets that Lyft uh operates in.