Alphabet-Backed Waymo (GOOGL) Returns to New York City to Map Out Manhattan

Waymo, which is Alphabet’s (GOOGL) self-driving car division, is returning to New York City next month to map out the complex streets of Manhattan using vehicles with safety drivers. The company hopes to eventually run fully driverless robotaxis in the city. According to The Wall Street Journal, Waymo has applied for a permit to operate with human drivers in Manhattan, as New York state still doesn’t allow fully autonomous vehicles. However, Waymo hopes to help change this rule in the future.

The news caused Uber (UBER) and Lyft (LYFT) stocks to fall, as investors see the potential for Waymo to disrupt the market. Indeed, five-star Wells Fargo analyst Ken Gawrelski believes that the U.S. rideshare market will be shaped by two big changes in the next five years: more people using autonomous vehicles and a shift toward cheaper ride options. He predicts that Waymo will take 10% of the rideshare market by 2030, up from just 1% in 2025, as it expands from covering 9% of the U.S. population to 57%. That could mean going from 18 million rides in 2025 to 465 million rides in 2030.

Interestingly, Waymo currently operates in Phoenix, San Francisco, Los Angeles, and Austin, and covers about 7% of the country. Nevertheless, it plans to launch in 17 more markets within the next six months. As a result, Uber and Lyft could lose 4% and 5% of market share, respectively, by 2030. Gawrelski expects Waymo’s growth to reduce Uber and Lyft’s trip volume growth by 100 to 300 basis points. The timing is important, as Tesla (TSLA) is also preparing to launch a robotaxi service in Austin, but Waymo already has a solid head start in this space.

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