Uber's stock rises as new Amazon robotaxi partnership is 'a positive surprise'

By William Gavin

Amazon's Zoox still needs regulatory approval to use its custom-built robotaxis for commercial service

Amazon-owned Zoox on Wednesday announced a deal to work with Uber Technologies, its first collaboration with a third-party platform.

Amazon.com and Uber Technologies are teaming up as the companies chase a global market that could be worth as much as $200 billion by the end of the decade.

Zoox, which Amazon (AMZN) acquired in 2020, has agreed to launch its toaster-shaped autonomous vehicles on Uber's (UBER) ride-hailing platform in two U.S. cities by the middle of 2027. The companies said they had reached a "multiyear strategic partnership," but didn't provide further details.

They plan to launch Zoox's robotaxis on Uber's platform in Las Vegas this summer and in Los Angeles next year. Zoox currently offers free public trips in Las Vegas and has been testing in Los Angeles for almost a year.

"This partnership is an opportunity to continue advancing the use of autonomous mobility in daily life," Zoox CEO Aicha Evans said in a statement. "Through our collaboration, Zoox will provide a differentiated rider experience to those who already know and love the convenience of riding with Uber."

For Zoox, the deal comes just days after the company said it would begin testing its technology in its ninth and 10th U.S. locations. Its fleet has driven more than 1 million autonomous miles and served more than 300,000 customers, the company said on Monday.

But Zoox hasn't been cleared to use its robotaxis commercially. On Wednesday, federal regulators began taking public comments on Zoox's application for a series of exemptions. The requested two-year exemption would allow Zoox to make and deploy its vehicles for interstate commerce, according to the application.

Bernstein analyst Nikhil Devnani said Wednesday that Uber's deal with Zoox serves as a reminder that the autonomous-vehicle arena is still in the early stage of development. Devnani also noted that Zoox had previously said it didn't want partners, making this "a positive surprise" for Uber investors.

"It's early and the safety/scalability is still to be proven out," the analyst said in a note to clients. "Nonetheless, we view this as a positive development for Uber."

Uber stock jumped 3.6% on Wednesday. Amazon shares fell about 1%.

Although the deal marks Zoox's first third-party partnership with a platform like Uber, it's just one of over two dozen for the ride-hailing company, which aims to offer driverless rides in 15 cities this year.

Uber is working with Alphabet's (GOOG) (GOOGL) Waymo, Avride, May Mobility and Volkswagen (XE:VOW3) to launch services in the U.S. Abroad, it has teamed up with China's Baidu, WeRide and Pony AI, as well as British startup Wayve. In February, Uber debuted a suite of services focused on helping robotaxi developers.

Read: Waymo just extended its lead over Tesla and Amazon

During Uber's fourth-quarter earnings call, CEO Dara Khosrowshahi said that AVs on the company's platform see "significantly higher utilization" than on stand-alone platforms. He added that trips per vehicle per day were 30% higher.

"So we know that the best product today out there in the market is an AV on the Uber platform as well," Khosrowshahi said on the call, according to a transcript.

Waymo remains the market leader, offering public rides in 10 U.S. cities with another 19 targeted for expansion. It's on track to serve more than 1 million rides each week by the end of the year.

There's also competition from ride-share platform Lyft (LYFT), which has teamed up with a half-dozen players, and Tesla (TSLA), which aims to deploy a robotaxi service in nine U.S. cities by June.

Read: Tesla's self-driving effort could be worth more than double its EV division

-William Gavin

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03-11-26 1909ET