Tesla (TSLA -8.78%) gets a vast majority of the attention in the autonomous driving space, but there are a lot of other companies vying for market share long term. Alphabet's (GOOG 0.82%) (GOOGL 0.72%) subsidiary Waymo is one of the market leaders, and Niro is already delivering pizzas autonomously in Silicon Valley. But the company I think we're underestimating is General Motors (GM 0.38%) and its subsidiary, Cruise. 

Cruise is already offering fully autonomous ridesharing in the San Francisco area. And GM is supporting Cruise, which it has a majority ownership position in, by manufacturing the Cruise Origin and extending $5 billion in credit for Cruise to build out its fleet. Cruise's value alone may make GM stock undervalued. 

Cruise Origin driving on the street.

Image source: Cruise.

Autonomous ridesharing is already here

Companies like Tesla have been talking about autonomous driving and "robotaxis" for years. But in California, which has a robust regulatory structure for autonomous vehicles, there are only seven permit holders for driverless testing, including GM's Cruise, Alphabet's Waymo, and Amazon's Zoox. Only three companies -- Cruise, Waymo, and Nuro -- have a permit to deploy autonomous vehicles for commercial purposes. 

You can see below that Cruise is already taking customers on driverless rides in the Bay Area. 

It's going to require billions of dollars to develop and deploy autonomous fleets, so companies with a first-mover advantage could build a big lead in the market. 

Autonomous driving could be a massive business

It's hard to gauge exactly how much the autonomous ridesharing business will be worth long term, but I think it's safe to say it will be big if companies like Waymo and Cruise can prove that it's safe. 

One comparison is to Uber and Lyft, which have generated $17.5 billion and $3.2 billion in revenue respectively over the past year, as seen in the chart.

UBER Revenue (TTM) Chart

UBER Revenue (TTM) data by YCharts

We can also do some back-of-the-napkin math on an autonomous ridesharing service's revenue potential. Remember that autonomous vehicles can run 24 hours per day (minus charging time) and don't need a driver, so they should be more cost-effective than traditional ridesharing vehicles.

In the U.S., the Department of Energy estimates there are 3.2 trillion vehicle miles traveled annually per year. In this table, I've estimated what revenue for autonomous ridesharing would be if the business performed 0.1%, 1%, and 5% of all vehicle miles long term and charged just $1.50 per mile.

Percentage of All

Vehicle Miles

Miles Driven Revenue/Mile Total Revenue
0.1% 3.2 billion $1.50 $4.8 billion
1% 32 billion $1.50 $48 billion
5% 160 billion $1.50 $240 billion

Data source: Calculations by author. 

Given the potential cost advantage, I don't think it would be crazy to think the autonomous ridesharing market could be over 5% of all miles driven in the U.S. a decade from now. Remember that Uber wasn't founded until 2009, and that year it reached 10,000 cities around the world, 111 million monthly active customers, and 6.9 billion trips.

Ridesharing can become a big business very quickly ,and Cruise has the technology and financial backing to build a huge network fast. 

Why GM stock is a great investment today

General Motors could be a great stock without Cruise because it's profitable and trading at a reasonable value even before Cruise really launches. 

GM Market Cap Chart

GM Market Cap data by YCharts

What I think makes this a great investment long term is the fact that it's profitably selling trucks, SUVs, and other vehicles while funding Cruise's autonomous business model. Eventually, Cruise could be much more valuable than GM is today, but as a majority owner, that will benefit GM shareholders who can hold on for the autonomous ride.