Transcript: Uber’s Autonomous Investments Won’t Be Modest, With or Without Waymo

Executive Summary

This week’s episode of Autonomy Markets covers the latest earnings calls from Uber and Lyft and how they presented starkly different narratives about their commitment to an autonomous future. While Uber emphasized “modest” investments and share buybacks, a move that raised questions for analysts, Lyft explicitly stated its willingness to purchase thousands of autonomous vehicles to jumpstart the market. This episode dissects the messaging, the financial models for funding future fleets, the critical role of OEMs,and whether the recent Waymo-Avis partnership in Dallas signals trouble for Uber.

Key Topics & Timestamps

[00:54] Uber’s Q2 2025 Earnings Call: Downplaying Autonomy Investments

Walter Piecyk notes that on its earnings call, Uber seemed to play up share repurchases while playing down investments in autonomy, referring to them as “modest” and focusing on capital return.

[02:51] The REIT Model: Who Will Finance Fleets of Autonomous Vehicles?

The discussion explores how autonomous fleets will be financed long-term. Uber believes that once the revenue model is proven, there will be plenty of third-party financing from private equity players and banks,

[05:01] The OEM Bottleneck: Is Manufacturing the Real Limiting Factor?

Both hosts agree that the primary hurdle to scaling autonomous vehicle deployment is OEM production capacity, not regulatory challenges. Uber needs to put up capital today to incentivize OEMs to build vehicles, similar to how telco companies commit to large phone purchases.

[10:24] Uber’s Exclusivity Dilemma with AV Partners

A debate emerges on whether Uber should require exclusivity from the AV partners it finances. While exclusivity protects Uber’s network, Walter Piecyk argues that allowing partners to work with others could be crucial for their survival and the health of the overall ecosystem.

[12:47] The Problem with “Recycling” Investments

Walter Piecyk critiques Uber’s stated plan to “recycle” capital from existing investments to fund new autonomy deals. He argues the capital amount is small relative to Uber’s free cash flow and that pulling money out sends a negative signal to strategic partners who are trying to grow.

[16:16] Decoding the Uber, Waymo, and Avis Relationship

The hosts analyze Waymo’s decision to partner with Avis for its Dallas expansion instead of Uber. On its call, Uber’s leadership performed “damage control,” stating that the move doesn’t signal trouble and is consistent with their strategy of working with many players.

[18:59] Lyft’s Aggressive Stance on Owning AVs

In contrast to Uber, Lyft’s earnings call featured more direct language about its willingness to own AVs. Lyft’s leadership stated they “will buy cars… thousands, absolutely,” to jumpstart markets, viewing it as a natural extension of their Flex Drive vehicle ownership program.

[24:43] Fleet Management: The “Unsexy but Essential” Piece

Both Uber and Lyft signaled the importance of fleet management, which includes buying, maintaining, charging, cleaning, and maximizing vehicle uptime. Uber’s CFO confirmed they expect to use cash flow to invest in real estate, facilities, and vehicles to support their AV operations.

[28:19] Watching Aurora’s Live Truck Feed

Walter Piecyk discusses dedicating a screen to watching Aurora’s live feed of its autonomous trucks. He was generally impressed, having seen the trucks operate in rain, on local roads, and with the human “observer” not needing to intervene.

[31:18] Zoox Gets a Key Exemption from NHTSA

Zoox was granted a demonstration exemption from NHTSA, allowing it to deploy its purpose-built vehicle on public roads. However, the exemption does not allow Zoox to charge for commercial operations, a key step it still needs to take.

[32:51] The Halo Effect: Do AVs Expand the Rideshare Market?

Uber’s tone shifted, with the company now claiming it sees “statistically significant trip growth in cities after AV launches”. They also introduced the concept of an AV “halo effect,” suggesting the presence of AVs enhances the Uber brand and drives usage of its other services.

Watch the Full Episode of Autonomy Markets

Full Episode Transcript

Grayson Brulte: Walt, you had quite the week as a TMT analyst covering the markets. Your good friend Tim Cook, he made his way to the Oval Office and boy, boy, he brought gifts, but could he put ’em together? I don’t know. But in our world of autonomy, Uber and Lyft reported. and something happened because lo and behold, I checked my inbox. I get a note from you. What happened? What sparked you to put pen to paper?

Walter Piecyk: You’re right, Grayson and I did write a note and, and as an aside to our listeners, check out Patrick McGee’s book Apple in China to get a better sense of really how Apple is manufacturing products and, and what they’ve done in China. But on Uber, you’re right, we don’t, at Lightshed do earnings, previews and reviews. We leave that to the big banks. But when I was listening to this Uber call, which was about 40 minutes long, a little shorter than normal, it would, it just seemed to me like they were playing up share repurchase and playing down investments in autonomy. They refer to them as making modest investments or that they were gonna recycle, which means reuse investments in existing autonomy networks. Or autonomy investments, , and, and we’re focusing more on capital return. I just thought that that was not necessarily the right narrative for the company, um, to do this.

Grayson Brulte: I heard things a little differently. I had my autonomy cheerleader hat on. You had your Wall Street finance analyst hat on, and I heard a few things and a few things that I thought of. The team at Uber might’ve been listening to autonomy markets ’cause. It was right outta the Walt Playbook. The stuff that you say here, they say, I wanna break down some of the comments here that D and the team made on The call. Let’s start with this comment. Get your opinion on it. I do think that you will see us do more deals like Neuro Lucid in the early days of autonomous as we are proving out the economics of the marketplace. That clearly sounds to me there’s more autonomy deals coming.

Walter Piecyk: I think that’s fair, and maybe the true translation here is they know these investments are coming. And when they hit the tape, they want to at least be able to have set the stage for investors of putting them in the context of all of the money that they’re utilizing, , for share repurchase. So it is possible that this was just kind of like a Jedi mind game of, you know, saying, Hey, we said on the call we’re gonna do more investments. But remember, you know, capital return is still a primary, um, you know, focus for the company. I just would’ve liked them to lean in more, um, you know, to the, you know, to the investments in autonomy, especially given everything that’s going on with Waymo and, and how people believe that one way or another.

Grayson Brulte: I thought in the call they, they, they did a balanced job of doing that. and. I put on my Inspector Kau hat on I, ’cause you know me, I like to go undercover and, and read between the lines and, do things. And there was a lion on the call again, right outta your playbook. And I wanna read this to you in quote, once we prove out the revenue model, how much of these cars can generate on a per day basis, there’ll be plenty of financing to go around. And third party financing. We’ve talked to private equity players. We’ve talked to banks, et cetera, et cetera, and while it will take some ‘ time, we’re very common. These assets are gonna be financeable. It sounds like the REIT model might be coming to become a reality very soon.

Walter Piecyk: I mean, and again, that gets to this point of, of them emphasizing that long term there’ll be asset light, which is why you should be like, look, we’re willing to use billions of our free cash flow to own cars in the near term. ’cause I agree with what Dara is saying in this statement that. They will be able to offload these assets. Um, so rather than, you know, again, talk about recycling and, and using modest amounts be like, look, you know, we might need, we might need to make large investments now, but we’ll be able to offload them, um, at a later date. So my question to you, Grayson, is who do you think is ultimately gonna end up financing Uber’s autonomous vehicles and, and. Are those vehicles gonna be bundled with assets like real estate or whatever to make it more appealing to the overall investor, uh, or the investment?

Grayson Brulte: I think it’s gonna have to be a bundled package, perhaps if you wanna buy it at autonomy in a box you get, you get the depot real estate, you get the vehicle, and perhaps there’s some sort of service contract on there Could start to generate cashflow. Perhaps we could see as a PE firm, perhaps we can see it and some specialized fund. But I think that there’s a lot of interesting opportunities there I don’t think there’s money there. There’s clearly interest in the market.

Walter Piecyk: Yeah, but on the real estate side, you’re gonna get better capital when you don’t have movable assets unless there, unless there’s some change in the tax law. So I think there will be some segmentation there. And there has been. I think, you know, if you look at what’s happened in Telco where towers have have turned into REITs and then you have different banks coming in, financing the handset payment programs, but it, that just underscores that financial partners will, will come to play. But the, the challenge though, in the near term, Grayson, is someone’s gotta put capital up today to get the OEMs to do things. And again, going and putting my telco hat back on. Years ago, you’d have to, you know, commit to buy a million or 2 million phones from Blackberry in order to get them to make it for you. Frankly, that even happens with, with Apple today, I’m sure Dish trying to enter the wireless market in the United States has committed minimum purchase commitments to Apple in order to get them to make an iPhone. So think about Apple. This is a well financed, huge company. Now apply that to an OEM or a car manufacturer. You, you need someone today. And Diara can talk about, as you said earlier, these banks that they’re talking to, but they haven’t stepped up today in the nor over the Wayve deals, right? in terms of being that financial partner. So if, if, if on one hand, Uber on gets on this call and says, the limiting factor to autonomy growth is OEM capacity, more so than regulatory, than put up the capital to do that, right? So, like, you know, and, and embrace it and, and tell investors that that’s coming. Don’t call it. Modest investments say these are big investments that are coming.

Grayson Brulte: There’s regulatory challenges, but there is a very clear path forward with the regulatory, as we’ve seen in the leadership under Secretary Duffy secretary. As we’ve seen now the White House, uh, with President Trump, there’s a very clear path to getting a national autonomous vehicle framework. Does that happen? I don’t know. I’ll give it a 50 50 odd to the standpoint, and, and the bullish part of me says, I’ll give you a 60 to 62% odds that it happens in the, in the next two years. And if you look at the state level, there’s a lot of positive movement on the state levels for the regulatory. So the regulatory environment to me is not a concern. It’s the OEMs and and are they willing to invest in this technology? And I say that with a caveat because there are OEMs that are doing it. Hyundai is clearly going, all in investing us. They have with with Waymo and with AV Ride, Ford and GM on the other hands they have pulled back. So do we see a divergence as it relates to the OEMs in terms of who’s gonna invest in this? And if they do, does Uber have to act as a guarantor to get them to make more of these vehicles? That’s a big question that’s out there.

Walter Piecyk: Yes, and, and I think, you know, there will be winners and losers and OEMs, and we’ve talked about this in prior podcasts as it relates to Aurora and the issues that they’re having with paccar. Um, and Volvo, like the, the, the ones that are willing to move forward or incentivized by having someone like Uber with that has this strong balance sheet, um, to invest, you know, they, I think, are gonna position well because I’m very bullish in terms of what can happen as long as they can make the trucks. When I, when I build my five and 10 year models trying to figure out mix of miles that are gonna be autonomous. It ultimately ends up being a bottoms up and thinking of when the OEMs can step in. And by the way, one of the things that no one is even mentioning here is like, does the technology even work? Right? We only really have Waymo in the market at scale. No one even questioning that These, you know, host of companies are gonna actually get the technology to work. And furthermore, like from Lyft’s standpoint, they’re very confident about technology. I think here’s a quote from their call. There’s no world where there will be just a small number of AV providers. You’ve got the guys owned by Alphabet, Zoox, Wery, pony Wave, MobileEye, which their note is a partner of theirs. And so there’s no so enlist view, uh, Grayson. Even though they also said that they were gonna be very selective in their investments and don’t wanna invest in something that’s gonna blow up in two years, but they said There’s no world that, that there’s just gonna be a, you know, one or two or three, um, AV providers. Thoughts on that?

Grayson Brulte: There’s no world and where they’re right. We, what we’re going to see, we’re going to see a handful of operating systems. you’ll you’ll have the wave system, the, the Nuro system, the Waymo system, the Tesla system. Uh, I’ll give you a point blank. I’ll give you a number where there’s gonna be most likely around six autonomous driving providers. For vehicles, then you’ll probably have four providers, four trucks, and then you’ll have others specialized in, in, in off road in mining and all that. And those numbers not gonna be a prediction on, but for the handful of Lyft’s market, you’re gonna have six core providers. You are not gonna have a mass amount of provider.

Walter Piecyk: That’s a lot. I’m not even sure there’s gonna be six. I think, a market like this, you end up, it ends up getting whittled down from a technology, uh, perspective. But, but we’ll see. And by the way, there’s no way that you can. I don’t wanna say no way. It is a challenge for Lyft to be selective in trying to figure out who the winners are today, uh, or tomorrow. I think, you know, that’s still an open game. We have great optimism for all these companies and as I’ve said many times before, AI changes that. My question to you, Grayson, is in terms of who you invest with or when you invest with them, let’s flip it. Forget off about Lyft for a second, that the true beast in the market, Uber. Um, do you explore financing? Only if You caveat that the vehicles run exclusively on the, on the Uber platform. What is the, what is the right model in your mind in terms of tying exclusivity with some of these investments as they occur?

Grayson Brulte: I would totally explore the exclusively, why would I wanna fund a competitor that could potentially outmaneuver me in the market? I like the idea if I’m gonna put the capital and I want to exclusively to run a my network, and I’m saying that as if I’m Uber.

Walter Piecyk: But consider this counterpoint. I mean, the really big issue here I think is, At least in my mind, is like, okay, you’ve got. Waymo, who is the leader and huge financing behind it. You have Tesla, a lot of financing behind it, a lot of smart people. At the end of the day, you want these other, if you’re Uber, you want these other guys to survive and have as much demand as possible, enough partners as possible. So if you tie them into exclusivity, that sometimes limits the ability for those companies to be successful. So does that change your view?

Grayson Brulte: That’s a very valid point. Well, how about this? I’ll give you a little pushback. What do you make the exclusivity for? the certain amount of vehicles that you finance that can only run on your platform and then allow those companies for vehicles that you do not finance. To run on other platforms.

Walter Piecyk: But if you’re Uber with the big check, you’re gonna be financing a lot of these guys. Like you bring the check, you know, you bring them on. You want to do that for survival. And not to mention like at some point, do you really, and I don’t think this is gonna be a big issue, but do you want to avoid invite the government coming in? You know, and, and challenging you for any type of exclusive deals. Again, don’t think that’s an issue unless you’re a company like Google. Um, but certainly something to consider.

Grayson Brulte: It’s a risk and you know it all too well from your telco days of what can happen with the FTC.

Walter Piecyk: Grayson, the other thing I wanted to talk about is this concept of recycling. So I mean, if you size the investments, um, for these, for these companies. You’re not talking about a ton of capital. So if I just bring up the, you know, I did a table in our note, and if you look at what Uber’s invested in, you have $3 billion of value in Didi, close to 3 billion in grab. Then you have Aurora net of What they basically already loaned, which is just a billion. Then, you know, you can list Delivery Hero and Joby and we all these different things that they’ve invested, but that doesn’t, that amounts to what, a couple of billion dollars in the context of a company that that can generate, what, $10 billion of free cash flow. Granted, they have now allocated half of that free cash flow that they say is gonna be returned to investors, but $5 billion per year compared to, you know, a couple of billion dollars of. Recycled, um, value assets. And then I’d say like, if you are that company, if you’re Aurora or Wer or whoever, that they, you know you know, may, if they’re gonna put money in there, I don’t, no, sorry, they didn’t put money in there, but any of these smaller companies, what signal does it send to the market as those companies are trying to grow, to have such an important strategic partner pull dollars out? I mean, we, and we saw it already happen with Aurora when they pulled dollars out of there. If you’re that company, what’s your reaction?

Grayson Brulte: I’ll give a market opinion from. The autonomy market’s opinion, not from the Wall Street perspective. I’ll give it to you from The insider and autonomy It doesn’t look good. It causes a lot of questions to be asked, a lot of individuals to question what’s going on. and it opened up though, what does Uber know that we don’t know? and they asked us specifically about Aurora because we saw the announcement. From Aurora And, Uber with the financing, and then a couple days later, Sterling Anderson resigns. We didn’t know where he was going until we found out a few days later that he went to GM product Officer. that that lit up the rumor mill people started chatting about it, trying to figure out what’s going on. So from the Autonomy Insider perspective, the optics don’t look good, and it just leads to tons and tons and tons of what questions. does Uber know? What does Uber know? Is that company’s tech not working? It just leads to questions upon questions. It’s.

Walter Piecyk: right. And, and that is something that you would wonder if that has an, an impact on PACCAR or um, Volvo in terms of how they dedicate resources to production in Aurora’s case. Similarly, if, you know Uber wanted to pull back on the investments that they’re making and let’s say the wave relationship, wouldn’t that have a negative impact on wave’s ability to cut OEM additional OEM deals? And again, that’s not a positive for Uber that should want these companies to flourish. There shouldn’t be this concern that these stakes or or partnership dollar investments are gonna, are gonna retract. There should be. Some, you know, indication that that’s gonna continue.

Grayson Brulte: But I’m gonna ask you from your Wall Street perspective. Why recycle when the free cash flow is clearly growing and the free cash flow supports the buyback and supports additional investment. So why do the recycling?

Walter Piecyk: I, I just think it’s a statement that they threw out there because, you know, rather than, a lot of people are lazy and they just don’t ultimately do the math. Um, it’s just something that’s to downplay the capital that I think is, is probably gonna get, still get allocated. To autonomy, like, don’t worry about the free cash flow. It’s all about share repurchase, you know, we have recycling and we will use some of the free cash flow will be modest. We’ll see, we’ll continue to track that. But I think it’s all about, you know, stocks, especially big ones like this, it’s, it’s always about the narrative and obviously autonomy. You know, is, is a primary narrative that they have. But again, your stock’s up 50% almost at a 52 week high. Your narrative’s been been pretty good and your investments I think, um, have been pretty good. and look, the other thing here, Grayson, is all of this to me, honestly, seems to be addressing what I would think is the elephant in the room. Which is the Waymo relationship. And you know, no fault to the company, this was some investors that took this yit data in Austin, you know, after Uber, you know, jointly launched Waymo, uh, in Austin and were like, oh, this seals the relationship. The company wasn’t pushing that narrative. So, you know, when Dallas was announced with Avis and not with uh, Uber. By Waymo, then it brought up these questions. So I think honestly, like all of this, this call and this discussion is about tempering people’s concerns about that Waymo relationship. What are your thoughts?

Grayson Brulte: I wanna know what you learned on the call, but if you look at it from a messaging standpoint, and I’m gonna give you the autonomy insider perspective again. It’s just, it goes back to the question asking, okay, so you have, Uber has a relationship with Waymo in Austin. Uber has the relationship with Waymo in Atlanta. Then all of a sudden we see Waymo expands to Dallas Great. Well then sub headline with Avis budget. Oh, okay. Where’d that come from? And then I put on my Walt hat and I dialed in and listened to the Avis call. And their CEO talked all about fleet management and willing to invest in real estate, willing to invest in vehicles and wants a long-term commitment. then the CEO also on the Avis call, talked about meeting and vetting several companies and ultimately choosing Waymo, so that was very interesting there. What did you learn on the Uber call from, from the Uber perspective on this?

Walter Piecyk: Well, on the Dallas stuff, I think it was more of just kind of damage control. You know, the quotes like, don’t read too much. Into Waymo expanding independently in Dallas. That’s consistent with their strategy, which I agree with and, and we’ve been saying this all along. And then back to Dara, it doesn’t signal trouble with our partnership. Also, I agree with that. Announcing a neuro or a partner X also doesn’t mean things aren’t going well with Waymo. Our strategy is to work with many players. Again, a hundred percent agree, uh, with what Dara is saying here, but I think, you know. For them. It was addressing that like things, things are confident to me, I would’ve addressed it differently. I would’ve been like, look, restate this stuff about Waymo, but also talk about how it’s important to continue to invest in the, in the, in the ecosystem. ’cause we don’t know what the end game is, or we think Waymo’s ultimately gonna have to use this? for X, y, and Z reasons. Maybe part of it being the investments we’re making in, in fleet management.

Grayson Brulte: It comes down to, to communication and narrative. And no matter what We think that Uber’s trying to communicate, Lyft is clearly communicating that they wanna lean into. Autonomy, you dialed into their earnings call. What did you learn on the Lyft earnings call. As it specifically relates to autonomy?

Walter Piecyk: Interesting in that like Lyft, who doesn’t have the same balance sheet as Uber. We seem to talk more about buying cars and their willingness to own these assets. And here’s a quote. We will buy cars, not hundreds of thousands, but thousands, absolutely just like we do today with Flex Drive. I would’ve loved if, if Uber said that this is coming from the Lyft call. And then he goes on to say, Risher, we’re already a vehicle owner through Flex Flex Drive. So buying some AVS is not a big stretch for us. It’s meant to jumpstart markets and give a sense of commercialization to organizations like Baidu, which have poured millions or billions into r and d. A hundred percent true. And by the way, I think Uber agrees with that. They just aren’t as willing to, I think, embrace that and say that on the call.

Grayson Brulte: But how Lyft’s balance sheet, with all due respect, Lyft, it’s minuscule compared to Uber’s balance sheet. So how is the, the little guy saying this, is this a David versus Goliath fight? What’s going on?

Walter Piecyk: They temper that by saying that they’re gonna be selective and saying like, in, in Baidu and others is they’re gonna choose a small number of partnerships where there’s genuinely, genuinely in their view, a win-win dynamic and long-term alignment of interest. I mean. I don’t know if you could be totally successful in that. You know, here’s another quote. I think I referred to this earlier. We don’t wanna throw a bunch of money or energy into something that blows up two years later. I mean, good luck. These are early tech companies. Like there’s a lot of factors, that can determine their success. And frankly, some of those factors include getting capital to get the OEMs to ramp up their production lines, which Lyft. Even if there, it’s a limited number of partners that you don’t necessarily have the balance sheet, um, to, to drive that.

Grayson Brulte: Walt, you missed it. I’m. sorry. You’re so focused on the share buybacks. You missed the big autonomy news that Dara said on the call, And I wanna read you a quote here from Dara. I’m gonna give you that pushback right there in the ribcage. Okay? And I’m gonna quote Dara here. We’re confident that over the next couple of years we will have OEM partners again, because we bring a ton of demand. We’ve got a great balance sheet that we can invest in order to prove out the financing of these models. We think we’re in a great position to do so. So stay tuned. You’ll see more announcements with new OEMs. There’s more deals coming, so there’s the pushback. I hope your ribs are okay because I gave you the pushback.

Walter Piecyk: I think that’s, that is very fair. Like these are, these are quotes. This is what they said. And maybe I, and maybe I was just too oversensitive to the, to the share repurchase. And maybe it was this balance because they were, Dara was sneaking in there saying like, yeah, we are gonna be doing these OEMs, but it’s gonna be a combined approach. So I take that, I take that criticism. Um, you know, and you know, you’re right, you’re right. I think they did. They did talk about these investments. Um, let’s go back to, Lyft’s selectivity, however, um, to get off me and my wrongness, um, and this deal with Baidu. ’cause like, you know, while they’ll do limited, Baidu obviously a huge company, um, to deploy autonomous vehicles. They’re gonna do it in UK and Germany on the Lyft network. You know, here are some of the deals. the initial fleet’s gonna be hundreds of Baidu, RT six vehicles. Scaling to thousands, they’re gonna start in 2026, like I just said, in Germany and uk. What are your thoughts on Lyft and using this to expand in Europe where they’ve traditionally been, you know, a US company?

Grayson Brulte: The European market is now the Chinese AV market. They’re clearly taking over Uber’s doing the same deals. I believe the Baidu vehicles in Germany will roll out at some point in 2026. Uh, the uk I I’m not so certain, and you know this better than anybody about all the telco issues that the UK has faced with Chinese hardware. Okay, so I would say uk I doubt that’s gonna happen by 2026 if it ever happens because of national security concerns. Germany it is gonna be very interesting. But this goes to the overall, the, the influence that China is having in Europe as it relates to autonomy. And if, if I’m the German auto industry, where do I go from here? That’s the question that I have more than anything.

Walter Piecyk: I mean, Germany, I, I noticed there’s that company, um, I forget the name of it, but they basically do the remote driving, which they had to do it in Las Vegas because Germany wouldn’t allow them to do it, even though it was a German company. They finally let ’em back in the country. So maybe there’ll be some changes as they see technology moving. My other question for you is, is free now. Was the, was the acquisition that they made. It’s, it’s, you know, it’s a big brand in Europe, but they indicated on the call that over the long term, they’re gonna basically shift to the Lyft brand in Europe. Do you think that’s the right decision, or should they just continue with free now forever.

Grayson Brulte: I think if you gradually segue the brand into the market is a good idea because it unifies it to an individual traveler in America. Going to Europe will will know the Lyft brand. They won’t necessarily know the Free Now brand. And I think and then, um, from a putting out my regulatory hat from a regulatory standpoint, it. will start to help Lyft build trust with the regulations as they go through that transition. So if it, if it’s done and executed right, I think it is a very good transition. So that’s my opinion on the brand, but what else did you learn on the call? Did you get any insights into fleet management? Since multiple calls and multiple quarters. Lyft’s really been hyping it. Hyping it up with Flex Drive. Did you get any insights into fleet management of how they’re gonna manage all these avs on two continents?

Walter Piecyk: Yeah, I mean I think both companies stated it. Now. Think going with your kind of theme of, of Uber. Indicating investments in a variety of topics that, um, support, um, autonomy Uber, CFO said they expect, said, expect us to use some of our cash flow in a more capital structure as we, as we need, may need to invest in either real estate and facilities as we announced with Lucid, um, also in vehicles. So there’s again, something that supports what you what your point has been. And Lyft also, you know, fleet management is unsexy, but essential. It means buying, onboarding, maintaining, charging, cleaning, and maximizing vehicle uptime. So I think both of these companies are signaling to the market this importance of this third leg of the stool, May 4th or fifth. Um, but the important leg that you and I have covered, um, you know, pretty aggressively on autonomy markets, including, you know, when we reviewed that a VO facility that, um, that was getting deployed in Austin.

Grayson Brulte: And, and another big part of that, is, is gonna be maintenance. What did you learn about Lucid as it relates to the maintenance of the vehicles on the call?

Walter Piecyk: Well, I think part of the thing that we, that you and I have talked about is the power issues. You know, especially as you, as you try to enter the northeast in order to get like an A VO center light there, can they bring power? So it was interesting that Uber played up the battery life of a lucid. And specifically just talking about, um, you know, how they can provide, you know, much less trips to recharge and get serviced. I think this kind of ignores that, you know, they still have to come in to get cleaned if sensors get knocked outta whack. But those types of, of service centers don’t need power. And I think what we’ve learned is power is the limiting factor. Um. I don’t know if over time you’re gonna see many EVs trying to hit those same type of 400 miles or whatever it is. , For the Lucid, I’m not sure that’s economically the right way to go, but at least for now, it’s, it’s kind of a, a reason, um, for why you would partner with someone that has a longer battery life, just given the, the challenge that you have in, you know, creating recharging stations in the places where you’re gonna need them.

Grayson Brulte: Absolutely and Andrew Chapin on the Road to Autonomy podcast. He talked about it from Nuro’s perspective that that battery life allows them to do is pretty tremendous. Did you learn anything else on the call as it relates to Lucid and neuro?

Walter Piecyk: I think only just, you know, that they talked about it being very spacious. Um, you know, I think there was one comment that Uber made that was very surprising to me, and I think. Because I think people have pushed back on the expense of this, the, you know, this version of the Lucid, um, which is being very high, and they said Uber expects better economics than any of its existing agreements. And again, due to this platform and efficiency and rage. So I think there, they’re speaking to the total cost of ownership where, yes, it costs more, but if we have to charge it less or service it less, it’s on the road. And we, and we look at that total cost of ownership. It’s factoring in, I, I just don’t know if that is gonna be the case long term. I kind of believe, I’m kind of more of a believer of like, you know, cheaper purpose-driven vehicles, smaller batteries, and just that the infrastructure will get there in time. But it’s definitely an interesting data point from Uber who has the math, right? They see the numbers, um, and the costs associated, you know, with having to send these cars in and out of depots. And again, that just underscores the important. Of fleet management and having partners that have locations, you know, throughout these, these markets that they wanna expand into.

Grayson Brulte: I like the vehicle, I like the deal, and I can’t wait to ride in win one together with you. We got two topics left. We got Aurora and and we got Zoox, but Walt. You had the Aurora show. Not, not The Truman Show, not the Real Life Truman Show. Nobody’s following You around. You had the Aurora show going on. You had the, uh, monitor over here watching the Aurora truck, basically 24 7. What did you learn from turning into the Aurora show?

Walter Piecyk: Grayson, as I’m sure you might have seen on trading desks, people have multiple screens set up. So I’ve got my Bloomberg and I’ve got my, the Twitter and the email and the texting and one of those screens I’ve now allocated, um, to watching this Aurora live. And you know, some of it’s replay, they switch every 15 minutes. Some of its development rides. Um, but it was very interesting. I mean, I’ve seen, I’ve seen the trucks operate in the rain and the dark, not like pitch dark at night, but these are what, what they would call the the development rides. , You know, so it was operating while there was, they were, I saw the driver, there was some of the videos where the video was on the driver. I saw him eating snacks. I saw the truck on some local roads. Um, and I saw it slow down. In one case, there was a truck on the side of the road. Surprise, Surprise, that truck that was parked on the side of the road didn’t have any safety triangles. Never seen a truck, I don’t think, with safety triangles, even though they were trying to jam up Aurora on that earlier. The truck was typically driving at 65 miles an hour, even in a 75 mile an hour zone. They were driving 65. But I think Aurora has explained that. As they’re doing that for mile mile, um, you know, gas mile efficiency. So overall, I mean, I was generally impressed, you know, with what I saw on these, on these, um, on these videos and definitely that, you know, what they call the observer, which is sitting in the driver’s seat. It’s not sitting there with his hands on the steering wheel, always sitting back, eating snacks, doing whatever. Um, so I, I think I was, I generally came away more positive. After watching these live things for multiple days.

Grayson Brulte: I think whoever came up with the idea, it’s brilliant. Jake, if it was you, sir, it’s a brilliant idea, Chris. It was you. It was brilliant. I like the idea. That it’s creating transparency because Aurora needs transparency because they have two partners that we don’t know where they’re going to go with those partnerships. There’s a lot of questions there. The one question putting on the autonomy insider hat That everybody asks about is, does Volvo autonomous solutions ultimately end up competing against Aurora? And so there’s a lot of questions that I have with their business model, and I’d love for the Aurora folks to give us some clarity on. Is Volvo Autonomous Solutions going to be a partner or are they gonna be a competitor long term? That’s something that I’m really watching to see if we get some clarity on.

Walter Piecyk: You know, the more we do this, the more we get transparency from these companies, and we appreciate that and we think that’s ultimately positive, but. You know, we’d like to get more transparency for sure, , from Volvo, you know, given some of the things that we’ve read on LinkedIn and elsewhere about their autonomous group. So, you know, I know there, there’s some Volvo listeners, we’d love to be, come and visit, um, your plants as you promised us and let us know and we’ll be down there instant. But Grayson, um, why don’t you tell us, let’s move on to the next topic. Zoox one of your favorite topics of the Zoox mobile. , Which just got, I believe, a huge approval, uh, some big exemption. Is That true Grayson?

Grayson Brulte: That is true and congratulations to Team Zoox on it. The Zoox was granted from NHTSA a demonstration exemption, which that means in a nutshell, it allows Zoox to deploy the Zoox mobile on public roads up to a certain amount of vehicles per year. However, there’s a big catch and we’re, name of the show is Autonomy Markets. Big catch. They cannot charge for commercial operations because they do not have a part 5, 5, 5 commercial exemption. So Zoox can put out and give free rides, which they’re doing in Las Vegas, as I called it, a Disneyland attraction, but they do not have the ability to charge yet. Good step forward. Still need to have the ability to charge.

Walter Piecyk: do you consider charging $4 and 20 cents a ride? An actual charge?

Grayson Brulte: There is, a transaction that bills your credit card, so there is a financial transaction, so yes.

Walter Piecyk: Well, I, I hear you. Um, I don’t think we should fully blame Zoox for this. This is just, I think, regulatory nonsense in terms of like, you’re gonna give them this exception but then not let them charge. Um, I mean, I know there’s the the last two we have, but I just wanna bring up one other, the thing Grayson, which is, you know, we’ve talked about whether autonomy expands the market, and I think historically Uber. Has downplayed this and said that, you know, in Austin or even in San Francisco, the growth in the market was really just more like marginal and tourist and it didn’t change. I think there was a definitive tone change this quarter from both companies. Um, first and maybe it wasn’t as much of a change from Lyft. ’cause richer is always super bullish. Uh, we will get to his comments later. But from Uber, there’s, they said, we are seeing statistically significant trip growth in cities after AV launches citing Austin. Again, that’s different than I think, what they said before. So I think that requires a bit of a follow up for like what’s different than what’s new from when. I think before you were said it wasn’t that much of a, of a growth and it was really just tourism. There was additional quotes, categories expanding and all of that expansion accrues to us. Since competitors don’t have AVS in the city, so they’re saying it’s expanding the market, but just to them. And then the other thing they talked about there, there’s the halo of av. Now, ha, when I’ve heard of Halo in the past, this is the iPhone halo, right? iPhone is great. So now I’m gonna go and buy, you know, max or, or whatever it is. And so they got pushed on that on a later call and their response was, there’s a data science team that tracks the effects, that has confirmed positive deviations. From baseline growth projections, meaning that like somehow you’re in the market in Austin or wherever and you have AV and now people want to want to go and use Uber in general more and, and use Uber in terms of the regular humans because you have the halo of being that technology forward company. Just what are your thoughts on that before we get to what Richer said about, about industry growth?

Grayson Brulte: My thoughts are very clear. Consumers like, autonomous vehicles. That’s what’s leading to it. It’s a, it. is a consistent experience. It’s a reliable experience. There’s no driver. They like the product, the end of the thing. And it tells me that every stinking pole out there, aaa, this is right directed at you is wrong. Consumers are accepting of autonomous vehicles. That’s what that also tells me.

Walter Piecyk: But the halo is like, do you think that because they’re associated with AV, that this is driving more rides for their human cars or for Uber Eats or anything else, just ’cause the brand is enhanced in that market.

Grayson Brulte: I don’t buy that for a moment. I’ll, I’ll call that corporate marketing speak, is how I would summarize that comment.

Walter Piecyk: I think I’d agree with you and based on how that the question was answered on the pushback, you know, that might have been a slip up in, in saying that Halo, uh, let’s move on to richer, love how richer delivers messaging. Avs are a massive TAM expander for rideshare in, in a, in markets where AV operate industry growth is five times greater than other type top markets, five times greater. Again, marketing this is less specific number, but do you believe that the industry growth in like San Fran was Five x? Just because you’ve got Waymo, you know, riding around there.

Grayson Brulte: I’m not sure if it’s five x, but I believe that there is an increase in the market because it offers a consistent product where somewhere I might have driven and I was like, oh, now I can get a Waymo. Great. So that, that increases me from being a driver to being driven. So yes, there is some, an increase, whether it’s five x I’m unsure.

Walter Piecyk: Maybe it’s like, okay, in some of these markets which were larger, more mature, the prior growth was 5%, so now it’s 25%. And the overall average of the growth in the market’s like 15%. I mean, who knows what that means, but, um. A decidedly different tone in terms of what autonomy. Look, I don’t think, I think autonomy has just begun. There’s a New York Times article that highlighted the safety issues with having a human driver in there. What autonomy provides in terms of safety without having the, the risk of a driver, let alone the accidents that that can, that can happen, um, with human drivers. And then ultimately the opportunity for cost. And insurance charges to go down. We’re so early stage in how this can expand. Um, you know, the ride share market, which again represents, you know, one or 2% of total miles driven in this country.

Grayson Brulte: It’s going to expand the, the ride share market. ’cause I personally, when I’m in a city with an AV, I use it more versus walking or or doing something else. But then on the other side, and Uber and Darris talked about this, their pool of drivers is going to shrink over time. And that’s something that we’re gonna have to watch to see. Can avs fill that in? And is there a delta gap between having enough avs, enough humans to match them in? That’s something that that we’re gonna have to watch and is every week you and I watch the markets and what do we need to look for in the autonomy markets over the the coming week.

Walter Piecyk: pony AI reporting. You’re not exactly a huge company. Um, but obviously, we’ll, we’ll be following what they say there. MobileEye, I think speaking at a conference, um, I think our good friend Don Burnett from Kodiak is gonna be in New York City. Hopefully I’ll be able to spend a little time with him and, you know, who knows? Maybe we see some, some more expansion out of our, out of our friends at Tesla.

Grayson Brulte: Based on Elon’s tweets, expansion’s coming, the future is bright. The future autonomous, the future is an expanding robotaxi industry. Walt, until next week.

Key Autonomy Markets Episode Questions Answered