Why Uber may have won Tesla’s robotaxi event

Uber Technologies (NYSE:UBER) shot up to an all-time high on Friday after Tesla’s (TSLA) robotaxi event failed to live up to some of the high-flying expectations.

Jefferies analyst John Colantuoni said the firm considers the event a best-case outcome for Uber Technologies (UBER), given the Elon Musk-led company did not provide verifiable evidence of progress toward L3 autonomous driving or quantify the number of robotaxis planned.

“We believe this helps minimize the ongoing overhang on UBER’s stock from TSLA’s aspirations in the robotaxi space. In addition, TSLA appears committed to pursing the robotaxi opportunity w/o partnering with existing rideshare platforms,” noted Colantuoni. “We believe TSLA potentially underappreciates the obstacles to scaling a robotaxi fleet (technology, asset ownership, regulation, fleet management, demand, routing, pricing, utilization),” he added. Jefferies believes Tesla (TSLA) could struggle to scale fleet operations without offering access to demand via Uber Technology (UBER) and Lyft (LYFT).

The Jefferies view is that Uber (UBER) is uniquely positioned to support sustainable growth for autonomous vehicle developers. The firm is convinced robotaxis could significantly expand UBER’s mobility total addressable market, given the resulting increase in supply would drive lower-priced autonomous offerings over time that expand the use cases for rideshare. In general, AV developers are expected to choose to partner with rideshare players instead of pursue standalone fleets. Uber (UBER) is seen sitting uniquely well-positioned in the rideshare space to help AV developers maximize utilization, optimize logistics/pricing, address barriers to changing engrained consumer preferences, provide fleet management expertise (20% of supply today), and help navigate/establish local regulation.

Another bull on Uber (UBER) is Seeking Alpha analyst Rafa Oliver, who thinks the company enjoys strong network effects and can capture additional savings through autonomous vehicles. The Uber (UBER) business was also noted by Oliver to be countercyclical to economic headwinds. Oliver projects 32% upside in the stock, with a value estimate of $104 per share. Uber (UBER) carved out a new high of $87.00 on Friday, and slipped to $85.54 in Monday’s premarket session.