Uber's Future: Can Autonomous Vehicles Drive Profits?

Analysts predict Uber's stock could surge as autonomous vehicles enter the market. With partnerships for self-driving tech, the reduction in driver costs will significantly impact revenue and net income over time.

Date: 10-05-2025

AI Rating: 7

Uber Technologies (NYSE: UBER) is poised for a transformational shift in its business model as it partners with companies specializing in autonomous vehicle technology. The reliance on 8.5 million human drivers currently constitutes the company's largest expense. Therefore, these partnerships could lead to massive cost reductions, projecting potential billions in savings annually.

For the first quarter of 2025, Uber reported gross bookings of $42.8 billion, leading to total revenue of $11.5 billion after deducting driver earnings and merchant payouts. The company demonstrated a solid net income of $1.7 billion during this period. Uber’s current financial figures reveal the considerable profit margins at stake if it can effectively transition to a model less dependent on human drivers.

The sheer economics favoring autonomous vehicles imply significant profitability enhancements. With 1.5 million autonomous trips currently facilitated annually, this trend is expected to grow as partnerships expand. If Uber successfully reduces reliance on human drivers, projected revenue could incorporate an additional $18.6 billion per quarter, effectively enhancing revenue growth substantially.

Despite current conservatively projected annual revenue growth of around 14% over the next two years, the potential of autonomous driving may provide a powerful tailwind, leading to a positive net income forecast. Moreover, a stable price-to-sales (P/S) ratio of approximately 4 seems reasonable, given the expected autonomy-related revenue increases.

Over the longer term, Uber's partnerships, particularly with significant players like Waymo and Nvidia, put it in a competitive position within the industry. A compound annual growth rate of 17.5% over the next decade is necessary to realize the ambitious fivefold return on stock investment suggested in analyses. While challenges exist, if executed effectively, Uber's business could attain new heights.

Stocks: UBER