Uber Partnering With Lucid, Nuro to Launch Robotaxis in 2026

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1:29Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Luis Mateo and Paul Sweeney live here in the Bloomberg Interactive Broker Studio in Midtown Manhattan. Streaming live on YouTube as well. So check us out there. You can search Bloomberg Live Radio. All right. Uber is partnering with Lucid Neuro to launch robo-taxis in 2026. I'll do a robo-taxi. I mean, I get in a car every morning with a dude I do not know.

2:13True. And I trust him to get me from point A to point B. But there's someone behind the wheel. Yeah, but I don't know who this dude is. But, I mean, I don't know. There's like 27 ,000 sensors on these things. It's, I don't know. Mandeep Singh, he knows. He does his stuff. Senior tech industry analyst for Bloomberg Intelligence. What's Uber's strategy for robo-taxis? Because you could argue that, boy, that would totally impact their business model. Uber, if I don't need to share my money with them. I mean, Uber's strategy under this CEO, Dara Khashoggi, ever since he's taken over, is to build scale when it comes to both supply, and that translates into adding more services.

2:54So that's why they expanded on their delivery side in such a big way. You know, they added food delivery, grocery delivery. It was all about bringing... They bought Drizzly, which is the booze guy. The booze guy, yes. He does know that. Look, and now they're doing the same with autonomous vehicle supply. So they have a partnership with Waymo in two cities, But then they are at the mercy of either a Waymo or Tesla partnering with them. What they're doing here is because they don't have their own AV efforts, really doing this minority investment in Lucid that makes about 10 ,000 vehicles a year premium EVs.

3:30and also Neuro, which is a software maker similar to Waymo in terms of autonomous driving. They provide the actual technology and sensors and software for the vehicle to drive itself on its own. And it seems to be a sound strategy just to hedge their bets. What if the Waymo partnership doesn't pan out or get bigger as they hope to be? and that's where, you know, having this investment does make a lot of sense. So how does this deal all work? I mean, break it down for us. Is it certain like SUV Lucids? Like how does it work? Yeah, I mean, look, Lucid, like I said, compare that to Tesla making 1.8 million cars a year.

4:13Lucid makes 10 ,000 vehicles a year. So it's a much smaller company in terms of the number of vehicles. But at the same time, everyone who owns a Lucid, they like the experience. It's one of that premium EV cars that never took off. And that's why adding that sensor technology for autonomous driving on top of Lucid does make sense because Uber, like I said, it's all about adding more supply. They want to cater to every segment, premium segment, who wants to use EV vehicles as part of their daily routine. And that's where, you know, they are thinking long term, okay, do we have EV supply for all types of segments?

4:54And this could be something that we have an investment in. And I think it's not a big amount. It's not an outright acquisition that they're making. Well, you know, Paul, they said the Lucid was the car of the Hamptons. Like, that's the new thing now. Yes. Okay. So you never know. Very good. I'm not sure what the car of the Jersey Shore is. It's the Vespa you see me cruising on. All right. The market cap of Uber technology is$188 billion. It's up 50 % this year. What's driving that? I mean, remember the time when Lyft used to be 30 % of Uber? That has changed completely. Now Lyft is like 3 % of Uber's market cap.

5:30So that's where that scale strategy under the CEO has worked for them. That really has been the key differentiator between Uber and Lyft and what explains that, you know, almost$200 billion in market cap for Uber. And look, I think they're doing the right thing here by adding more scale because otherwise Otherwise, you run the risk of getting disintermediated, especially a Tesla, which wants to go on its own. They don't want to partner with anyone. All right. Derek Khosrowshahi, the CEO of Uber. He got his 20 most recent year comp, 4.2 million cash compensation, 39.8 million of non-cash competition, i.e.

6:09stock. That stock, since he got that, is up 23.8 million. So his current pay value for that year is$68 million. This dude's worth every penny, right? To shareholders? I mean, I'll pay this guy whatever he wants, right? Well, his fortunes have really turned around this year. Up until 2024, the stock didn't do that well. So really this year with Bill Ackman taking a stake. Oh, I forgot about that. So there have been a lot of catalysts that have played out in favor of Uber. And like I said, Lyft not performing because of their lack of scale really validated Uber's strategy. So I do think he has had a good run.

6:47Yeah, boy. Well, Paul makes fun of me because I only have the Uber app. I don't have the Lyft app, but he kills me all the time. The quick 30 seconds that we have here left, robo-taxi fleets. We don't know where this one is going to take off, right? Can something like this work in New York City, robo-taxis? Well, Waymo is trying to get a permit here. So in my mind, you know, Uber wants to fill in the gaps where they don't have a partnership with Waymo. So right now, Uber has a partnership with Waymo only in two cities, Austin and Atlanta. Not in San Francisco, Phoenix, and other cities where Waymo operates in.

7:19So this allows them to add more AV vehicles in cities where Waymo doesn't want to partner with Uber. Would you get in a, have you been in a Waymo? I have, yes. I love the experience. Really? Yes. So you get in the back, there's no buddy in the front, and the car just goes. Yeah. I mean, and the car is reliable in the cities where they operate. Waymo now has 100 million miles, driven miles. So how much validation do you need? You're right. All right. You sold me. I'll give it a shot. I mean, I don't know. Maybe not in Manhattan. No. I saw him in San Francisco. I thought about it, but no. He didn't do it.

7:55I pressed the pause button on that. All right, Mandeep. Thank you so much. Always, always a great talk. Mandeep Singh, senior tech analyst. You know, driverless car dude. Who knew that? You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. I'm Lisa Mateo alongside Paul Sweeney. United Airlines, right? They narrowed its profit range for the first, for the rest of the year, but they do expect travel demand to continue to rise.

8:31Now, earlier this morning, CEO Scott Kirby, he sat down with Bloomberg's Lisa Bromitz and they talked about United's earnings and also their outlook for the rest of 2025. This year, a lot of uncertainty in the first half of the year. macro uncertainty and that led to an impact on bookings and demand at United and across the whole industry. But it felt like there was a turning point at the end of June where the tax bill passed and the situation in the Middle East was calmer and tariffs, while not certain yet, narrowing the range. And it really felt like people felt enough confidence or enough lower level of uncertainty that they kind of came off the sidelines and were unfrozen.

9:11All right. That was United CEO Scott Kirby. Let's bring in the expert on all this. George Ferguson, he's Bloomberg Intelligence Senior Aerospace Defense and Airlines Analyst. George, thanks for joining us. Scott Kirby, he seemed pretty confident, did he? He does, but I guess he always sounds confident, right? I think he's counting on some capacity cuts here in the second half. And he talked about some of the uncertainty going away. So I think it'll get better story. But yet 2Q for him and for Delta didn't look that great. George, where's business travel today? I'd like to tell you, but the airlines try to hide that.

9:52But everything we can parse out of sort of Delta and United earnings makes it sound like it's lagging the leisure rebound. It may be back to 2019 levels, but that would, again, sort of still be lagging. And so the sense I get is it hasn't come back as strongly as leisure. And these airlines are more pointing to high-end leisure as the driver of their profitability. George, I have to point out Newark Airport, because I'm a frequent visitor. There were a lot of issues there, right? Construction, Newark Liberty. There were outages, delays. When they asked Scott Kirby about it, he said he was kind of optimistic about it.

10:35But he also pointed out JFK. Would love to get in there. Has this been kind of a sticking point for United? Newark, for sure, right? Because Newark, they've got a strong concentration of flights out of there. You know, he started the call, too, today. You know, I got to sign on for the first couple minutes of it before joining you. And, you know, he was sort of lauding what was going on at Newark Airport. And so, you know, I think it's I think we're starting to put behind us the FAA problems. But Newark is always a challenging airport. It has a lot of activity. You know, he said the FAA and the constituents there have gotten real about the amount of throughput they could put around Newark.

11:18That would be good because essentially Newark suffers from a whole lot of throughput that's trying to get through that airport. And then you get in the middle of summer and you just have these weather events, thunderstorms, which we've been having, I think, every day now in New Jersey, which sort of roiled the whole deal. So he sounded optimistic that they've got a lot of the fix in place for the airport. George, where are we on air traffic controllers? I mean, how hard can this be to staff this whole system up here? I just don't get it. What's the status? Yeah, so, I mean, it just takes a long time to train an air traffic controller, longer than I would have expected.

11:56I mean, the last numbers I've heard were sort of over a year. I think I want to say it was like a year and a half, but I have to go back and check my numbers exactly on that one. And, you know, during the pandemic, you know, we had people that were probably not too jazzed about entering that business because it was one of those where you couldn't work from home. I think that work from home world is fading a bit now. But back again during the pandemic, it didn't seem that exciting. And I think it has the problem that every other industry in America, especially the older industries, have. And that is there's a bunch of baby boomers inside it.

12:32They're approaching retirement and actively retiring at this point. And the backfill, again, it's not the most exciting industry, I guess, to go into. The backfill has been harder. Recruitment has been harder. And when you get behind them recruitment and training takes a certain amount of time, it takes a while to fill. And so we're still in that attempt to refill phase. Again, I think it's getting better as the economy, maybe as some of the labor market is not as white hot as it was coming out of the pandemic. but we're still behind the curve a bit. All right. So we heard from United. We've also heard from Delta.

13:07You know all the numbers. But for me, what does it mean for airline fares? Am I going to have to pay more for a ticket coming up? You know, I think that there's going to be a stabilization of fares here. But when we look at the second half, we see capacity growth coming down. We still see capacity growth, though. And I think we've seen it sort of around GDP. And we kind of think that around GDP levels of capacity growth doesn't firm fares and it doesn't cut fares. And so I think you've seen some cuts recently. I think you'll see this level of fare going through the back half of the year unless airlines cut more capacity, which would help them firm fares a bit more.

13:55But again, we see growth that's right around GDP growth. And so it doesn't look to me like a scenario where you're going to see strong growth in fares for the airlines. George, can't let you go without talking about Boeing, because for me, it's just kind of my quintessential great American company, great engineering company, great manufacturing company, Seattle, Washington, one of great parts of the United States. Where are they with their 737 deliverables? Because you've told us time and time again over the years that that's really a key metric for this company. Yeah, so I think one of the great other American companies gave us a little bit of insight this morning, and that was GE, right?

14:34And GE supplies the engines to Boeing. And GE kind of guided down a bit on margins for the back half of the year here. I mean, guided down like their commercial businesses are like operating margins in the high 20s, right, which is really super. And they guided down to sort of mid-20s. And that's a function of getting new engine deliveries into Boeing, engines for the 777, engines for 737. Boeing has done a better job of delivering. That's all about how they're going to win. And from what I heard from GE today, that's going to persist through the back half of the year, which is, I think, a strong positive for Boeing.

15:14Again, a little bit of an ebb for GE, but a strong positive for Boeing. George, thanks so much. Appreciate it. As always, George Ferguson, Senior Aerospace Defense and Airlines Analyst for Bloomberg Intelligence. All right, Lisa, big question for you. And this is going to tell me a lot about who you are as a person. Oh, boy. Aisle or window seat on the plane? Oh, aisle. Me too. Yes. All right. No, because I know. But then if people have to get up and go to the bathroom back and forth, that's kind of a pain. Yeah. But it depends. Like, if I'm on a short flight, I'll go window because I like the flying into New York is always cool.

15:45Because you have a 50 % chance you're going to get the view of the city and all that kind of stuff. Okay. But it depends where I'm flying. I'm flying somewhere cool. Maybe I'll try the window seat. But by and large, I'm an aisle person. If you need to get up and take care of business, you can do it. You can do it. Looking for more investing options? Meet SIBO, the exchange that pioneered options trading. With exclusive trading products like VIX and SPX options, SIBO can help you trade in any market environment. There are risks associated with SIBO company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers.

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18:04International customers, a big part of their nice earnings report that just came out. Here with all the details, Kenneth Shea, Bloomberg Intelligence Senior Consumer Products Analyst. Kenneth, thanks for joining us. Positive results. This is pretty good for them because it's a time when people are a little bit more health conscience, maybe. You know, there's some negativity around soda, processed food. So this is pretty good news for them. Yeah, hi, Lisa. Yeah, I would ascribe today's rally in PepsiCo, though more to a relief rally. You know, sentiment has been pretty low on Pepsi since their last report.

18:38In the first quarter, they lowered their guidance. It wasn't really a strong report. This one, I think, was a report of stabilization. Organic growth was about up 2 % in the quarter. Wasn't great, but it was above the 1 % expectation. Operating margins widened. Analysts love to see that. And I guess the last piece of good news is they gave a good sense of good innovation that's coming in the fourth quarter and first quarter next year in the area of protein drinks. And as we know, everybody on GLP One drugs these days are looking for protein supplements. And that really is an on-trend innovation I think people are getting excited about.

19:19Hey, Ken, a lot of folks, including myself, have gone to private label goods when shopping in the supermarket, trying to fight this inflation thing out there. Does Pepsi, with their brands, are they seeing that as a headwind? You know, Paul, not really. Not in their big Frito-Lay franchise. This is, you know, the 800-pound gorilla in a snack aisle. It continues to gain share, believe it or not, at least on volumes. I think some of the problem with Frito-Lay foods, I should say their overall food, they combined Quaker with Frito-Lay last quarter, is that I think consumers are a little more price weary, to your point.

20:02So I think they've held the line a little bit with things like bundled package sizes and things like that. But, you know, the company says it's really turning its attention more to productivity and cost to get that business going. In the second quarter, comparable profits were down 13 percent in that business. Not great showing. So fortunately for them, though, in this quarter, the international area and Pepsi beverages did pretty well and more than all set that weakness. Now, you were talking before about GLP-1. So, yes, people going for the more protein, like how you said, but also wanting to eat smaller portions.

20:43And that's something that Pepsi is changing with its snacks, right? Making the packaging smaller. Is that correct? That's right. It's a trend that's been going on for a while. And I think they were pleasantly surprised, as their competitors, Coca-Cola and Carrig were, when they rolled out the mini cans years ago. There's a lot of outcry that, you know, sugary drinks were adding too many calories. So they came out with the smaller versions, kind of like a portion control kind of thing. What they probably underestimated was how much that contributed to price mix, because obviously the unit prices are higher with those smaller cans.

21:20And they've extended that same kind of concept to a lot of their snacks as well, whether it's Cheetos or Frito-Lay and so on, to your point. And a lot of the packaged food items as well. Smaller is also more convenient. So it also plays into consumer trends for portability as much as it is for calorie counts. I like the smaller cans of soda. It's perfect for me. The 12 ounces was too much. These things are just perfect for me. So kudos to all those folks. So what I like about a lot of the names that Ken Shea covers is they're big, nice, juicy dividend payers. I'm looking at Pepsi, just about a three, almost a 4 % dividend yield here.

22:04Ken, how do your companies like the Pepsi's, how do they think about their dividend policy? Well, they're very much committed to it. They know that their shareholder base is very income oriented. And so, and it serves the company well to have a policy like that. But by and large, the dips in consumer spending goes up and down, depending on the whims of economics. These are businesses that are typically recession-proof, cycle-proof. And so they take these steady cash flows, and they do a nice balancing act of reinvesting with innovation. They're always looking for productivity improvements that bore fruit this quarter.

22:49and they take care of shareholders first through dividend and then on a more selective basis share buybacks so they have a lot of levers to pull to reward shareholders with with an income stream that predictable yeah i mean i'm looking at the you know cump function for pepsi in the last five years compounded annual return about six percent for the stock but then you throw that four percent dividend yield that's a ten percent return that's not a bad way to make a living so that's how i I think a lot of people look at those staples stocks out there. Ken Shea covers them all. He's a senior consumer products analyst for Bloomberg Intelligence.

23:22He's down there in our Princeton office, although I'm guessing he's probably working from home because that is a thing now for a lot of folks. This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 10 a.m. to noon Eastern on Bloomberg.com, the iHeartRadio app. Tune in and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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