Waymo explores Uber breakup as robotaxi tensions reach $100B

Waymo is preparing to end its Uber partnership in Austin and Atlanta by early 2028, a split that would reshape who controls the customer relationship in the robotaxi market.

Waymo has notified Uber it plans to launch its own app in Austin and Atlanta from January 2028, the Financial Times reported, as the Alphabet-owned robotaxi operator moves to sever a partnership that has grown strained over operations, finances and strategy.

"The two companies were pursuing diverging objectives," a person familiar with the developments told the Financial Times. Uber said the contract covering Austin and Atlanta ends in May 2028, according to TechCrunch.

The split follows the end of a nearly three-year Arizona deployment in June, when Waymo pulled its vehicles from Uber's app in Phoenix. Waymo now operates across 11 U.S. metro areas and serves roughly 500,000 paid rides a week, according to TechCrunch. The company last raised money at a $45 billion valuation in 2024 and has discussed a new round at more than $100 billion, The Information reported. Uber shares closed down 4.3% on the FT report.

The breakup would end an arrangement that once made strategic sense — Waymo had the self-driving technology, Uber had the riders — but now threatens to limit both companies' ambitions. For Waymo, owning the customer relationship means controlling pricing, loyalty data and routing. For Uber, losing Waymo's fleet would remove a key autonomous vehicle partner from its platform at a time when the ride-hailing giant is trying to position itself as the front door for all urban transport.

Tensions Built for Months

The public friction predated the breakup. In April, Uber CTO Praveen Neppalli posted a video on X showing what he described as a "scary" Waymo moment in San Francisco, where a robotaxi overtook a Muni bus in the wrong lane. In May, Uber CEO Dara Khosrowshahi criticized Waymo's behavior in school zones and emergency situations during an earnings call, without naming the company directly.

Behind the scenes, the friction ran deeper. Waymo raised concerns about the cleanliness and routing of its vehicles when operated through Uber's platform, the FT reported. Uber pushed back on the sudden unavailability of Waymo vehicles during bad weather and argued the partnership carried "unsustainable financial terms," according to the report.

Regulation Becomes the New Battleground

The commercial split has a parallel fight playing out in regulation. Uber has opposed a Washington, D.C. bill that would allow fully driverless commercial robotaxi operations, with a $1 million application fee, a $5 million permit fee and at least $5 million in liability insurance. Waymo backs the bill. Uber argues it could hand Waymo a de facto monopoly and hurt human drivers.

In New Jersey, Uber has pushed for language requiring human drivers to complete 85% of rides on any platform offering driverless service for three years, Wired reported. That would effectively force Waymo to operate through a platform that also includes human drivers — a structure that preserves Uber's role as the intermediary.

San Francisco has given regulators fresh material. Dozens of Waymo vehicles were caught in July 4 gridlock around the Presidio and Crissy Field after the Golden Gate Bridge fireworks, with some running down their batteries and needing to be towed. One unoccupied Waymo caught fire after driving over a small firework, with no injuries reported. Supervisor Bilal Mahmood sent formal inquiries to city agencies, and Mayor Daniel Lurie later asked California officials for tougher robotaxi standards during major events.

For investors, the split raises questions about both companies' autonomous vehicle strategies. Waymo, valued at $45 billion in its last funding round and reportedly seeking a $100 billion valuation, is betting it can build a direct-to-consumer robotaxi business without Uber's distribution. Uber, which has partnered with Wayve and other autonomous vehicle developers, must now prove it can replace Waymo's capacity. The outcome will determine whether the robotaxi market consolidates around vertically integrated operators or remains open to platform aggregators.

This article is for informational purposes only and does not constitute investment advice.