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Russian (RU) Lyft (LYFT) stock jumped in Wednesday morning trading on news it will partner with Google-backed autonomous cab provider Waymo in Nashville. Uber Technologies (UBER) stock fell, as Lyft's larger rival has previously partnered with Waymo in other markets prior to this deal.
Starting next year, Lyft will provide Waymo "end-to-end fleet management, including vehicle maintenance, infrastructure and depot operations for the Nashville fleet," the companies said in a joint announcement. Riders will be able to hail a Waymo driverless cab through the Waymo One app, with Waymos also coming onto the Lyft app over time.
"Waymo has proven that its autonomous technology works at scale," Lyft Chief Executive David Risher said in the news release. "When combined with Lyft's customer-obsession and world-class fleet management capabilities, it's two great tastes that go great together."
On the stock market today, Lyft stock is up more than 10% at 22.38 in recent trades. Including those gains, Lyft stock has rallied nearly 80% year-to-date.
Lyft has other partnerships with autonomous vehicle providers, including a recently announced deal with May Mobility to offer autonomous rides in Atlanta.
But the Waymo deal is likely the most significant so far. Waymo is the U.S. leader for autonomous taxi-rides, often called robotaxis. The company surpassed 10 million paid rides earlier this year and operates in San Francisco, Los Angeles, Austin, Atlanta and Phoenix. Waymo's expansion plans also include Dallas, Denver and Miami.
In some markets, Waymo has focused solely on its Waymo One app. But it has partnered with Uber to find passengers in Phoenix, Atlanta and Austin, Texas. This will be its first partnership with Lyft.
Uber Stock Falls Below Buy Point
Meanwhile, Uber stock is down more than 4% at 93.38. Shares tumbled below a previous 97.54 cup-with-handle buy point. Uber stock also fell below its 21-day moving average.
Both Uber stock and Lyft stock have been pressured at points over the past 12 months by the growth of Waymo, as well as Tesla's robotaxi plans. Investors fear that robotaxi firms like Waymo could upend the market for hailing rides through apps.
The Lyft deal will likely reignite concerns about the relationship between Uber and Waymo. Waymo is a key partner in Uber's broader strategy of bringing a wide range of autonomous offerings onto its platform. Uber stock tumbled late last year when Waymo announced its plan to expand to Miami and did not name Uber as a partner.
Uber has other plans and partnerships in the works. Most notably, the company announced in July that it would make "multi-hundred-million dollar investments" in both the startup Nuro and electric car company Lucid (LCID)to develop a new robotaxi service in a not yet named city.
In a client note Wednesday, Wedbush analyst Scott Devitt said the deal show Lyft stealing "Uber's thunder." But he is neutral on both Lyft stock and Uber stock and said he expects robotaxis will take market share from both companies.
"While we think the near-term financial impact to established ridesharing platforms is limited, over time, we expect AVs will disrupt the current status quo," Devitt wrote.
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