Uber, Lyft Shares Jump After Tesla’s ‘Toothless’ Robotaxi Revealed

UBER Technologies and Lyft rose in early trading after Tesla’s Elon Musk offered few details about the automaker’s plans for an autonomous vehicle service that could compete with ride-hailing.

Uber shares rose as much as 5.4 percent and Lyft shares rose as much as 3.7 percent in pre-market trading on Friday (October 11) following Musk’s launch of a robo-taxi called Cybercab on Thursday in California. Tesla shares fell as much as 6.9%.

Musk’s debut of the two-seater prototype and a Robovan concept that can carry up to 20 people disappointed Tesla investors who were hoping for more details.

Although he said Cybercab production could begin in 2026 and cost less than $30,000, the CEO warned that he tends to be overly optimistic.

“We consider the event to be the best outcome for Uber,” said John Colantuoni, an equity analyst at Jefferies with a “buy” rating on the stock.

In a report referring to Tesla’s taxi as “toothless,” he noted that the company has not provided verifiable evidence of progress toward automated driving capabilities, nor has it quantified how many robotaxis it plans to manufacture.

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Thursday was seen as a “make or break night” for Tesla shares, said Mike O’Rourke, chief market strategist at JonesTrading.

The event had already been postponed for two months and Tesla was under pressure to justify its high valuation and prove that it can lead the industry in autonomous vehicle technology.

Uber CEO Dara Khosrowshahi offered a sobering view on the future of autonomy earlier this week, saying he hadn’t seen robotaxis becoming a significant part of the company’s fleet for years.

The technology isn’t there yet, regulators are cautious and costs won’t be competitive for a while, he said.

“Safety is job number one,” he added. “So I would say in the next three to seven years, we will start to focus on the economy.” BLOOMBERG