Uber's deals with Lucid and Nuro adds to Arizona's bustling robotaxi economy

Uber has agreed to a deal with two other companies, and it could lead to more autonomous vehicles on the roads. Axios reports the ride-hailing company will buy 20,000 vehicles from Lucid, and they’ll be made at the carmaker’s facility in Casa Grande. And Nuro will provide the AV technology for the robotaxis.

The Phoenix metro area has been a bit of a hotbed of autonomous vehicle activity. To find out what all this means for the region and the industry in general, The Show spoke with Joann Muller, transportation correspondent for Axios, where she writes the Future of Mobility newsletter.

Muller started by talking about with how big of a deal in the AV world this new deal is.

Full conversation

JOANN MULLER: Well, I think it's a big deal for a number of reasons. You know, let's start with Uber because this is, you know, a ride-hailing company that really disrupted transportation 15 years ago. And now they're on the cusp of getting disrupted by autonomous vehicles and robotaxis. And so Uber has kind of an existential threat, which is, do we try to beat them? Do we join them? What do we do?

And Uber's strategy has been to partner with a lot of different AV partners around the globe, really, but in the United States, it's mostly been with Waymo up until now, and they have some Waymos on the Uber network in Austin and Atlanta. But remember that Waymo, as you know, in Phoenix, they have their own network of robotaxis, and there's a little bit of tension there if you think about it.

If Waymo were to decide, you know, we don't really want to be on Uber network anymore, we just want to collect all the fares and the money for ourselves, that leaves Uber up a creek. And so that's a reason why they formed this partnership with Neuro. OK, now you have to find a third partner who's the car company. That's Lucid in this case. Lucid is a great partner for autonomous vehicles because they are already electric. They have a ton of technology in them. They're very easy to add on autonomy. And so that's why you have this interesting three-way partnership. It's really a win for all three companies.

MARK BRODIE: It's an interesting place I think for Uber because their venture into autonomous vehicles has been kind of fits and starts, right? Like they were really into it and then of course they had the incident in the Phoenix area where a car hit and killed a pedestrian. They stopped doing it and they seem to be on the way back. Are they potentially still a big player in the AV world?

MULLER: I believe so. So, yes, you're absolutely right. They, in the beginning, they wanted to develop the technology themselves and that's why, you know, they had that car in Phoenix. It was on a Volvo that killed the pedestrian and that sort of sent a chill over the entire AV industry for a couple of years. But Uber has always known that the day would come when people are going to want to ride in autonomous vehicles, not just human-driven vehicles.

BRODIE: Well, when you talk about money, like, do folks who study this sort of thing seem to think that there is room for another company in the AV space like Waymo, at least in Phoenix, has a pretty big foothold already in a lot of vehicles, a lot of people use them. Is there room for another company, Uber or whomever else to come in and can more than one company make money doing this?

MULLER: Absolutely. I think you need to have more than one company. You know, right now there's really only three companies that are still in the robotaxi business. Waymo is way ahead. Tesla is trying to get its robotaxi service off the ground, and then you have a company called Zoox, which just launched in Las Vegas.

So you've got, you know, Waymo is owned by Google, you've got Zoox, which is owned by Amazon, and then you've got Tesla, which is another one of these giant tech firms. And so we'll have to see, there's still gonna be some shakeouts and some movement, you know, it's still very, very early days. And while Waymo is very dominant there in Phoenix, obviously they got their start there and their service area has grown and grown, you know they're only in less than 10 markets nationwide in one form or another.

Let's say they've announced 10 markets. They're not even operating in all those, but it's such a minuscule part of the whole rideshare taxi business, so tons of room for growth and it's not too late for anybody to get into this business.

BRODIE: So I'm wondering what all of this means for the Phoenix area because as we've discussed, Waymo has a very strong presence here in the Phoenix area. Now, you know, these Lucid vehicles will be built and retrofit or outfitted with the AV technology, just a little bit south of the Phoenix area.

Is it safe to say that this area will continue to be sort of a hotbed for this kind of activity?

MULLER: I think so. this is certainly very good news for Lucid, which, you know, as a pure EV company, faces a somewhat challenging future with incentives going away, for example, tax incentives for purchasing an EV. They tend to sell, you know, higher-end vehicles. They only have a couple models so far. The newest one is the Gravity. It's an SUV crossover and that is the vehicle that will be the basis for these new robotaxis.

And the fact that you know that production will happen in the factory in Arizona is great because it makes sure, it ensures that there will continue to be jobs there and so I do think it's good for the economy in general in Arizona. It's good for Lucid, and I think that Phoenix has surely been kind of setting the pace when it comes to the whole autonomous vehicle market.

BRODIE: Joanne, let me ask you about one other thing that you've written about recently, which is, some data suggesting that in markets where driverless cars, taxis are available, that the amount that rideshare drivers make is going down. Phoenix, of course, one of them. Is it too simplistic to say that this is evidence that people prefer being driven by a robot as opposed to being driven by a human?

MULLER: I think that's part of it for sure. But, you know, I think the competition is relevant here, right? And it's, right now, robotaxis cannot go everywhere. And so if I were a gig driver, I'd be worried about what this portends for the future, for sure. On the other hand, I think because of the fact that robotaxis are limited where they can go and when they can go that the gig driver will adapt and know that they are that they'll just focus on highway or on airport runs, let's say, or they'll focus on those areas that are not served by robotaxis.

Certainly when there's a big concert, let's say everybody's trying to get a car at one time, the human driver is going to be better equipped to get to the customer than the robot that's going to be confused and staring, standing around trying to figure out, what do I do in this traffic jam?