- Uber is seeking funding from banks and private firms to expand its Robotaxi operations.
- Partners would own robotaxi vehicles at a set price, share revenue, and license self-driving technology software.
- Uber plans to use a small share of its $7 billion annual cash flow and may sell minority stakes to support expansion.
- Analysts believe large-scale robotaxi use could lower operating costs and increase profitability for Uber.
- Analyst Jim Cramer described Uber as a “cash flow juggernaut” and supported buying its stock at current prices.
Uber is in discussions with several banks and private investment groups to gather financial support for the growth of its Robotaxi service, according to presentations made by CEO Dara Khosrowshahi on Wednesday. The proposal would allow participating partners to own robotaxi vehicles at a fixed rate, receive a share of revenue with fleet operators, and use software for self-driving technology through a licensing model.
Khosrowshahi stated, “We are talking to private equity players, we have talked to banks. Once we prove the revenue model, how much these cars can generate on a per-day basis, there will be plenty of financing to go around.” The company expects to fund these deployments using a modest portion of its estimated $7 billion in yearly cash flow, and may also sell minority stakes in other businesses to aid expansion.
Uber already provides robotaxi rides through a partnership with Alphabet-owned Waymo in Austin and Atlanta. In July, Uber announced a $300 million agreement to deploy over 20,000 vehicles made by electric car maker Lucid and equipped with self-driving systems from Nuro over the next six years.
Experts predict that large-scale deployment of robotaxis could reduce Uber‘s reliance on human drivers, lowering operational costs and increasing profitability. The company recently reported a 17% increase in gross bookings and an 18% jump in revenue for the third quarter, exceeding Wall Street expectations. Uber projects third-quarter gross bookings between $48.25 billion and $49.75 billion, and has initiated a $20 billion share buyback program.
Stock analysts remain optimistic, offering price targets ranging from $92 to $110. CNBC’s Jim Cramer called Uber stock a “cash flow juggernaut,” stating, “Now, Peter asked, should he stay or should he sell? But you know what he should be doing? (buy, buy, buy)… the stock is worth buying right here.” For further details, see the original source.
At the time of reporting, Uber‘s stock was down 0.5% on the day but up 1% over the past five days.
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