Pony AI vs. Uber: Which Autonomous Ride-Hailing Stock is the Better Bet?

The robotaxi market is a highly lucrative space with immense potential. According to projections, the global robotaxi market is expected to reach $45.7 billion by 2030, at a CAGR of 91.8% from 2023 to 2030. This growth has attracted both Pony AI, an autonomous-driving company based in Guangzhou, China, and ride-hailing giant Uber Technologies.

Uber's Autonomous Vehicle Ambitions

Uber has been focusing on strategic partnerships to gain a stronghold in the robotaxi market, avoiding the massive R&D costs associated with developing autonomous systems independently. In 2020, Uber sold its self-driving division but continued to focus on becoming the ultimate ride-hailing super app.

One of Uber's key partnerships is with China's WeRide, which aims to introduce self-driving cars in Dubai. The companies announced a partnership with Dubai's Road and Transport Authority to integrate WeRide's self-driving technology into Uber's platform. This collaboration is in line with Dubai's goal of making one-fourth of all city trips autonomous by 2030. In December 2024, Uber and WeRide launched a robotaxi service in Abu Dhabi.

Another prominent partnership is with NVIDIA, leveraging its cutting-edge AI platforms—Cosmos and DGX Cloud—to create scalable and efficient autonomous vehicle models. Uber's vast repository of ride data and its dominant market share in the ride-hailing industry give it a unique advantage in the autonomous vehicle space.

Pony AI's Role in the Robotaxi Field

Pony AI aims to have over 1,000 robotaxis in its fleet by the end of 2025, up from around 250 late last year. The company is working closely with partners like Uber to ensure a quick ramp-up of its large-scale deployment. Pony is also looking to strengthen its approach to sourcing key components to allow it to rapidly adapt to changing demand and ensure efficient execution of its mass production plans.

In May, Pony partnered with Uber to deploy its robotaxis on the Uber platform. The partnership is expected to be launched in a key market in the Middle East later this year, with scope for further expansion. During the pilot phase, the robotaxis will have a safety operator onboard. Pony's technology is scalable and cost-effective, making it a suitable choice for Uber's global platform.

Key Metrics Comparison

Shares of Pony have declined in excess of 5% since its Nasdaq debut in November 2024, while Uber shares have gained in double digits in the same timeframe. However, the bottom-line estimates for both Pony and Uber have remained stable over the past seven days.

Conclusion

While Uber's autonomous vehicle technology is advancing, commercialization is likely to take significantly longer due to regulatory challenges and concerns about eliminating intermediary services. Pony, on the other hand, is already a leading player in the autonomous driving technology industry and its operations are minimally impacted by tariff uncertainty. China's robotaxi market, of which Pony AI is an integral part, is growing rapidly, driven by support from the government and a cost-effective supply chain. Based on our analysis, Pony seems a better pick than Uber now. While Pony carries a Zacks Rank #2 (Buy), Uber currently has a Zacks Rank #3 (Hold).