Uber and Waymo partnership expands to Austin and Atlanta

Above announced on Friday that it is extending its partnership with Alphabet Waymo will begin offering robotaxi rides in Austin, Texas and Atlanta in early 2025. Uber shares rose 5% on the news, while Alphabet's rose about 1%.

Uber riders can be matched with a Waymo driverless car for some rides in those cities, the companies said. The rides will only be available through the Uber app, unlike in San Francisco and Los Angeles, where riders book through the Waymo app. A Waymo spokesperson said there are no plans to partner with Uber in San Francisco and Los Angeles.

The expansion comes as Uber is under pressure from investors to intensify its autonomous vehicle strategy, especially TeslaThe robotaxi event is scheduled for October 10. Uber shares have fallen 9% since the Tesla event was announced and are 17% below their 52-week high.

This could also slow Waymo's advance into Uber's market share. A Bernstein analysis estimates that Waymo's 50,000 weekly paid rides represented about 2% of rideshares in San Francisco in May 2024. Since then, Waymo has doubled its paid robotaxi rides to 100,000 per week, the company said.

“We are excited to build on our successful partnership with Waymo, which has already enabled fully autonomous rides for tens of thousands of drivers in Phoenix,” Uber CEO Dara Khosrowshahi said in a press release.

Uber's initial agreement with Waymo in Phoenix also included autonomous Uber Eats deliveries in the city. The expansion to Austin and Atlanta will not include Uber Eats initially, according to the Waymo spokesperson, but they are exploring that possibility for the future.

Tekedra Mawakana, co-CEO of Waymo, said: “We are delighted with the positive feedback from our Waymo One drivers so far and can’t wait to partner with Uber to bring the comfort, convenience and safety of the Waymo driver to these cities.”

The expansion into two more cities is another step by Uber into the robotaxis space after the company struggled to gain a foothold and sold its own self-driving car division in 2020. Now the company relies on partnerships with companies like Waymo, GM's cruise and the SoftBankThe British startup Wayve, backed by the Finnish government, is gaining ground.

Uber shares fell in August after the company announced a multi-year partnership with Cruise to offer autonomous rides through its app next year. Wells Fargo analyst Ken Gawrelski cited Cruise's past safety issues as a reason for investor skepticism, along with the now-fulfilled hopes of a partnership with Waymo.

Waymo has made rapid progress in the race to autonomous driving. The company currently offers robotaxi services to the public in San Francisco, Los Angeles and Phoenix. As of June of this year, the company has logged more than 22 million miles and last week released a report claiming its vehicles are safer than human drivers. In August, the company began testing self-driving cars on Bay Area highways with Google employees.

Some analysts were more optimistic that Uber and Waymo could expand to San Francisco. But Atlanta and Austin, where Waymo has already begun testing, could lift sentiment.

— CNBC's Laura Batchelor and Lora Kolodny contributed to this article.