In a significant move for the autonomous vehicle and ride-hailing industries, Lyft (LYFT) shares surged 13% on Wednesday after the company announced a partnership with Alphabet’s (GOOG) self-driving Waymo service. The collaboration will bring a fleet of autonomous, driverless cars to Nashville, with service expected to begin next year.
Initially, riders will be able to hail these robotaxis directly through the Waymo app. Lyft plans to integrate the autonomous fleet into its own platform in 2026, allowing users to summon driverless cars alongside its traditional rideshare vehicles. The partnership represents a major step forward for Lyft, which avoids the steep costs and risks associated with developing autonomous technology in-house, while simultaneously strengthening its position against rivals like Uber (UBER) and Tesla (TSLA).
The deal is particularly noteworthy because Waymo already has partnerships with Uber to provide autonomous rides in Atlanta and Austin. Following Wednesday’s announcement, Uber shares fell roughly 5%, highlighting the competitive dynamics emerging in the robotaxi sector.
The autonomous ride-hailing market has been accelerating rapidly this year. Tesla began testing its own autonomous service in Austin this summer, with plans to expand to Nevada, Arizona, and Florida. Amazon-backed Zoox has also conducted limited testing in San Francisco and Las Vegas. Waymo, meanwhile, has maintained a leading edge, offering paid robotaxi rides in major cities including San Francisco, Phoenix, Los Angeles, and Austin.
Waymo co-CEO Tekedra Mawakana emphasized in a press release that the Nashville rollout is part of a phased expansion aimed at bringing the self-driving service to more users in more locations over time.
The market opportunity for autonomous ride-hailing is enormous. Goldman Sachs analyst Mark Delaney estimates that the U.S. ride-hailing market is currently worth around $58 billion but could expand to more than $330 billion by 2030 as robotaxi services reduce operating costs, including the need for human drivers. For Lyft, the Waymo partnership provides a cost-effective strategy to compete with Uber and Tesla while sidestepping the challenges of building autonomous technology internally.
However, Lyft faces challenges beyond technology. In a note to clients, Evercore ISI analyst Mark Mahaney maintained an “In Line” rating following Lyft’s mixed second-quarter results, citing the company’s ability to sustain top-line growth while ramping profitability as the central question. “We see LYFT’s valuation as very reasonable,” Mahaney said, noting that his firm would like to see positive fundamental trends maintained over time before becoming fully constructive on the stock.
Despite these challenges, Lyft’s stock has performed strongly in 2025, rising 70% year-to-date, outpacing Uber’s 48% gain over the same period. Nevertheless, Uber remains a much larger company, with a market capitalization of $195 billion compared with Lyft’s $9 billion, underscoring the smaller scale but nimble positioning of Lyft in the autonomous ride-hailing race.
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