Tesla Inc (NASDAQ:TSLA)’s upcoming Robotaxi fleets present both a growth avenue and a series of logistical hurdles for ride-hailing OG Uber Technologies Inc (NYSE:UBER, ETR:UT8), reckon investment bank Oppenheimer.
In a future where multiple providers compete, Uber’s strength as a leading logistics and matching platform could enable it to achieve lower costs and higher vehicle utilization rates, said analysts.
The company’s platform advantage may also allow Uber to better penetrate the car ownership market, which currently represents only 2% of its US mobility expenses.
Oppenheimer’s report suggests that meaningful cost reductions enabled by Robotaxi could help expand Uber’s total addressable market, potentially doubling its revenue.
Near-term, Uber is expected to regain its US Mobility share, supported by adjustments to insurance costs and more aggressive incentive programs compared to its competitor, Lyft.
Oppenheimer noted that Lyft reported 16% year-over-year growth in rides for the third quarter, while Uber’s US Mobility Trips grew at a slightly slower pace.
Nonetheless, Uber’s mid-teen US Mobility growth is anticipated to dispel concerns raised by third-party data.
Uber’s valuation remains attractive, with Oppenheimer noting a 25% discount to its historical EV/NTM EBITDA multiple.
Oppenheimer gave the stock an ‘outperform’ rating with an $85 target price against a current spot price of $60.92.