Investing.com -- Waymo’s ambitions in New York City took a formal step forward this week, as the Alphabet-owned company submitted an application to the city’s Department of Transportation to begin operating autonomous vehicles (AVs) with safety drivers in Manhattan.
While this marks the company’s first move toward AV testing in the city, Jefferies analysts caution that “commercial deployment is most likely years away.”
New York’s current legal framework requires a human to remain behind the wheel, so a change in state law would be necessary for fully autonomous commercial rides.
In addition to regulatory hurdles, analysts highlight several challenges, including the city’s political climate, heavy street congestion, and the influence of the roughly 80,000 rideshare drivers currently operating in the market.
Despite these obstacles, Waymo’s attempt to enter such a complex environment is being viewed as a signal of its growing technological edge.
The company already offers paid rides in cities like San Francisco, Phoenix, Los Angeles, and Austin—where it provides 250,000 rides per week—and is planning expansions into Atlanta, Miami, and Washington, D.C. over the next year.
Jefferies analysts also see potential for Uber (NYSE:UBER) to play a strategic role in Waymo’s New York entry. The two companies have already partnered in Phoenix, Austin, and soon Atlanta.
Analysts led by John Colantuoni note that in Austin, Uber “disclosed the average AV completes more Trips per day than 99% of local drivers,” pointing to the efficiency AVs can deliver on an established platform.
“We believe success in these markets demonstrates the long-term value UBER offers to AV developers and could help earn a partnership with Waymo in NYC,” they added.
Uber’s deep roots in the city could be a key asset in navigating both regulation and market entry, with Jefferies estimating the company derives a low single-digit percentage of gross bookings from New York.
The analysts see Uber as the “most likely consolidator of AV demand,” thanks to its scale and ability to assist AV developers in areas ranging from logistics and pricing to fleet management.