This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
The rush to claim a dominant position in the nascent robotaxi market took an EV-inflected turn Thursday, as Uber (UBER) announced it will invest up to $1.25 billion in Rivian Automotive (RIVN) to help launch up to 50,000 robotaxis.
Uber’s new partnership, along with its prior deal to outfit its vehicles with Nvidia technology, highlights the tech industry’s excitement around a new kind of commercial transportation. It also underscores how the top players in the space, from Uber to Alphabet’s (GOOG, GOOGL) Waymo to Tesla (TSLA), all face technological roadblocks even as they must clear obstacles unique to their respective brands and operations.
Well before Tesla’s recent pivot to the Cybercab, Uber’s endgame was to get to autonomous driving. Through years of labor disputes, regulatory battles, and debate over the “gig economy,” it became more clear that while Uber’s value was deeply reliant on contracted drivers, the next step in its corporate progression was to fully automate the ride-hailing platform.
Tesla is essentially leapfrogging that entire contract driver phase just as Uber is farming out its automotive side to Rivian. But Tesla will need consumer buy-in from all the people who have never owned a Tesla, resent CEO Elon Musk, and wouldn’t think to use its app for a ride.
On the other hand, people already use Uber for ride-hailing. It may not have its own in-house autonomous EV, but it’s got the network effect that its competitors (mostly) don’t have.
That’s not to say that Uber doesn’t have its own reputation problems. Just as Uber might view its contractors as a cost burden that technology may eventually displace, some of its former drivers and users see the platform as a fee-extracting middleman — hence the existence of driver-owned and other ride-hailing alternatives.
Tesla has its own issues, of course. Yes, it’s pivoting to a business that it hasn’t operated in before. But just as notable is the political and social baggage that comes with its CEO and corporate face.
Whatever hurdles Uber has to overcome to become a kind of transit utility pale in comparison to Musk’s post-X, post-election, post-DOGE reputation risks, which include the perception of rolling technology out that’s potentially premature.
Move fast and break things feels different when you’re inside the thing, moving fast.
