Uber Technologies Inc UBER is expanding its bet on autonomous rides (AV) with a fresh partnership with Cruise, which is majority-owned by General Motors Co GM.

The deal put new data on the table to understand how the business of autonomous ride-hailing will work in the near future, as companies such as Uber extend partnerships with AV operators.

Uber shares tanked almost 3% on Thursday after hours but have fully recovered by Friday at the time of this writing and are up 0.91%. General Motors is up 3.94%.

The multi-year strategic partnership is expected to happen 2025 and will add a number of Cruise’s Chevy Bolt self-driving vehicles to Uber's roster. Details of the deal are yet to be released, including how many of Cruise's 1,200 autonomous cars will be hired by Uber.

In a Friday note, BofA Securities maintained a Buy rating for Uber and kept a price target of $88, against a current price of $73.40. Goldman Sachs reiterated a Buy rating and a $90 price target.

Uber Puts Another Coin In Its Autonomous Vehicle Jar

The partnership with Cruise adds weight to Uber's ventures into autonomous driving, said BofA analysts. 

In 2023 Uber launched a multi-year partnership with Waymo, which is Alphabet Inc.’s GOOGLGOOG autonomous driving subsidiary. In April, Waymo's autonomous vehicles began delivering UberEats orders in Phoenix.

Last month, Uber also announced a partnership with Chinese EV maker BYD Company ADR BYDDY, which could include autonomous rides for the European and Latin American markets.

In its latest earnings call, which yielded strong quarterly results, Uber CEO Dara Khosrowshahi said his company is in late-stage discussions "with additional global AV players" to join the platform and anticipated more announcements "in the coming weeks and months.”

Uber has several other relationships across the AV ecosystem, said Goldman Sachs analysts. 

These include a $900 million stake in Aurora Innovation Inc AUR, as well as other smaller partnerships with several other start-ups. 

Read Also: Uber’s Cost Cuts May Be Working: S&P Global Upgrades Credit Rating As Stock Soars 25% In 2 Weeks

Can Tesla Build Competition From Scratch?

BofA Analysts raised attention to Tesla Inc's TSLA upcoming robotaxi unveiling event, which has been postponed for Oct. 10. The event was pushed forward several times, raising expectations among investors who are intrigued to find out what the Elon Musk-led company has up its sleeve.

Earlier this month, Khosrowshahi expressed doubts about Tesla's plans for its robotaxi capabilities, which would allow Tesla owners to set their car free to go on autonomous self-driving trips for ride-hailing customers, through a dedicated Tesla app. The service would be operated by Tesla itself, Musk said.

Building cars and operating a taxi fleet are "very very different" businesses, Khosrowshahi said, though he didn't discard the possibility of a partnership between Uber and Tesla.

Goldman Sachs analysts sided with Khosrowshahi in their latest note, stating they don't believe autonomous vehicle operators like Tesla "have an incentive to rebuild existing consumer demand" putting together new networks from scratch, given that companies like Uber and Lyft have already reached scale in the U.S. and in the case of Uber, globally.

What The Deal Means For Cruise, GM and Other AV Operators

For autonomous vehicle makers, partnering with existing ride-hailing networks could be a way to upsize revenue in the short-term and could minimize the costs of owning or scaling a fleet, said Goldman Sachs analysts.

On Wednesday, Waymo said it averages 100,000 weekly paid rides between Los Angeles, San Francisco and Phoenix.

The Uber angle could also benefit General Motors. Goldman Sachs has said the partnership with Uber "will provide investors additional confidence on a path back to commercial operations."

Cruise's vehicles have been in operation in San Francisco, Austin, Dallas, Houston and Phoenix, with tests in Miami and Dubai. 

The company halted operations in October of last year after one of its cars was involved in an incident which injured a woman in San Francisco, which led to the resignation of then-CEO Kyle Vogt. The company resumed operations in April and in June appointed former Amazon and Microsoft executive Marc Whitten as its new CEO.

Goldman Sachs has a Buy rating on General Motors, with a price target of $53, against a current price of $48.

Now Read:

• Uber Hires Tesla Veteran Who Was Previously Laid Off By Elon Musk: Report

Photo: Shutterstock