What happened
A stock that took quite a beating during the stay-at-home period that was much of the coronavirus pandemic, Uber Technologies (UBER -0.07%) did quite well this week. According to data compiled by S&P Global Market Intelligence, shares of the ride-sharing giant rose by nearly 6% over the course of the five trading days.
So what
Uber stock's acceleration was due mainly to a pair of factors. The first was the news that the company is teaming up with Motional to offer driverless rides, and effect food deliveries through its ordering service, in the self-driving vehicle maker's Ioniq 5 robotaxis. The deal between the two companies is a sprawling one, as it will be in effect for 10 years and cover a range of markets around the globe.
The autonomous driving future can't come fast enough for Uber; self-driving cars, of course, require no human driver. As a result, they don't need to get paid and require far less management. Uber had a proprietary self-driving technology unit, ATG, which was launched in 2015. It burned away a lot of capital with insufficient results, however, and was divested in 2020.
So the company's tie-up with Motional seems like a promising way to get back in the autonomous transportation game.
Also during the week, Uber benefited from a new research note published by RBC analyst Brad Erickson. Much of this analysis actually concerned Uber uber-rival Lyft (LYFT -1.65%) stock, which Erickson downgraded to sector perform (neutral, in other words) from the previous outperform (buy). The prognosticator is concerned about Lyft's driver supply and other "structural headwinds."
Now what
Naturally, Uber got more than a mention in Erickson's note. The analyst believes that Uber's pricing is becoming more competitive and it's managing to reduce its pick-up times -- a crucial element in a customer deciding which company to choose for a ride.
It should be noted, though, that both Lyft and Uber remain habitually unprofitable. While the ride-sharing industry is in a far better place than it was during the pandemic, it still has numerous challenges in front of it.
