Lyft stock surges 13% on Waymo robotaxi deal in Nashville

Lyft (LYFT) stock surged 13% Wednesday after the company announced a partnership with Alphabet’s (GOOG) self-driving Waymo service to roll out an autonomous ride-hailing service in Nashville next year.

Riders can initially hail driverless cars through the Waymo app, with plans to integrate the fleet into Lyft’s platform later in 2026.

The collaboration is significant given that Waymo also has deals in place with Lyft’s rival Uber (UBER) for its robotaxis in Atlanta and Austin. Uber shares were down about 5% following the announcement on Wednesday morning.

The robotaxi race has accelerated this year. Tesla (TSLA) began testing its service in Austin this summer, with plans to eventually expand to Nevada, Arizona, and Florida. Zoox, backed by Amazon (AMZN), also has limited testing in San Francisco and Las Vegas. Waymo has been leading the race, providing paid robotaxi rides to customers in San Francisco, Phoenix, Los Angeles, and Austin.

Waymo co-CEO Tekedra Mawakana said in a press release that the deal was part of a gradual rollout as the company continues to scale Waymo’s ride-hailing service “to more people and more places.”

At stake is a huge opportunity for companies like Waymo, Tesla, and others. Goldman analyst Mark Delaney estimates the market for traditional ride-hailing in the US is worth approximately $58 billion currently. It could be worth more than $330 billion by 2030, with robotaxi-type services pushing the industry forward and reducing costs by — among other factors —not requiring a human driver.

For Lyft, the Waymo partnership could help the company better compete with Uber and Tesla as it sidesteps building the autonomous technology in-house — a costly and risky prospect, particularly if AV expansion stalls.

Still, Lyft faces other challenges. In a note to clients, Evercore ISI analyst Mark Mahaney reiterated an In Line rating after Lyft’s mixed second quarter results, calling the key question “the company’s ability to sustain top-line growth while ramping profitability.”

“We see LYFT’s valuation as very reasonable,” Mahaney said. Even so, the firm “would like to see positive fundamental trends sustained over time to become constructive on the shares.”

Lyft stock is up 70% year to date versus Uber’s 48% rise during the same period. Uber’s market cap, however, is $195 billion, dwarfing Lyft’s $9 billion valuation.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at francisco.velasquez@yahooinc.com.