On August 14, Pony.ai (NASDAQ:PONY) said it would deploy more than 2,000 robotaxis across Europe under an expanded partnership with Uber (NYSE:UBER) that dates back to May 2025. The rollout stretches from an existing commercial service in Zagreb, Croatia to four additional European cities, with plans to reach the Middle East as well. For a company built on human drivers, that expansion says a lot about where Uber thinks its next act is headed.
Bull Case: The Economics Are Shifting
Uber’s driver network is also its biggest expense. In the second quarter, the platform processed $58 billion in gross bookings, and $25 billion of that went straight to its 10.2 million drivers, the single largest cost on the books. Every autonomous mile that removes a driver from that equation pushes more of each ride toward Uber’s own margins, without Uber needing to build or own a self-driving car itself.
That is the logic behind the model CEO Dara Khosrowshahi has been building: let partners like Pony.ai handle the hardware and software, while Uber supplies the 208 million monthly active customers already on its app. Autonomous vehicles run in seven cities today, and Khosrowshahi has signaled that could double to 15 by the end of 2026, backed by roughly $10 billion Uber plans to commit to its partners over the next few years.
The core business is moving too. Uber added more first-time users over the past year than in any twelve months of the last five; monthly active platform consumers grew 16% year-over-year, and trips rose 18%. Delivery, now more than a third of total sales, grew revenue 28% year-over-year while transportation grew just 1%. Non-GAAP net income climbed 29% to $1.6 billion, an 11.6% margin, and the stock’s roughly 8% year-to-date slide has left its price-to-sales ratio at 2.8, well under its 4.1 average since going public in 2019.
Bear Case: Big Promises, No Timeline
Friday’s announcement left notable gaps. Pony.ai gave no timeline for when the 2,000-plus robotaxis would actually hit European roads, and the four cities beyond Zagreb went unnamed, as did any specifics on the Middle East plans. For a company betting its next act on autonomy, vague rollout details are a reason for caution as much as excitement.
Uber’s approach also means leaning on outside technology rather than owning it. The roughly $10 billion earmarked for partners assumes those partnerships keep delivering rides at scale and on schedule. The competitive field is already crowded, too: Alphabet’s Waymo alone completes more than 500,000 paid autonomous trips across 11 US cities every week, a scale Uber’s partner network has yet to match anywhere.
What The Smart Money Sees
Hedge fund ownership of Uber slipped from 153 funds to 147 last quarter, while ownership of Pony.ai climbed from 23 to 31, pointing to institutional money rotating toward the smaller AV specialist even as it trims Uber. Short interest tells a calmer story: just 2.41% of Uber’s float is sold short, against 6.57% for Pony.ai, suggesting far more skepticism is aimed at the newer, unprofitable player. Additionally, Uber trades at 22.68 times forward earnings, a multiple that already assumes its delivery and autonomous bets keep paying off.
The Road Ahead
Uber’s expanding robotaxi footprint offers a cheaper path to growth than adding more human-driven rides ever could, and the underlying business, from delivery growth to rising margins, is already moving in that direction. Still, the Pony.ai deal remains a plan more than a proof point, with no rollout date and unnamed cities standing between Friday’s announcement and any real revenue.
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