Waymo is expanding to Miami early next year. Unfortunately, Waymo plans to use Moove for fleet management and its own app to offer rides. This is quite disappointing to me. In Waymo’s two most recent expansion cities (Atlanta and Austin), Uber is being used for fleet management while Waymo rides are exclusively offered through the Uber app. That arrangement created a great deal of excitement. The Miami news now casts renewed doubt and uncertainty around how compelling Uber is as a partner for autonomous players like Alphabet (Waymo), Amazon (Zoox) and Tesla. Uber is an investor in Moove and owns a sizable stake, but this is still bad news in my mind.

As consistent readers know, I have significantly reduced my Uber stake this year and just recently added a small piece of those proceeds back to the position. That small add was based on optimism surrounding Atlanta and Austin and how expansion into those cities was structured. The Miami news reverses that optimism and deteriorates long-term risk/reward here a bit. These developments won’t impact near-term financials for Uber, but will impact sentiment, the valuation multiple tied to its financials and (potentially) longer-term results. I was very tempted to trim more as I sit on 100% profits and a 41% return CAGR, but I simply decided to do nothing.

This article goes into more detail on my views towards Uber going forward. For now, I want it to be as small as it currently is and am not interested in building out the position further. It’s this headline and long-term growth risk that led me to liquidate the majority of the position this year. If the picture here becomes clearer over time, I’d love to resume accumulation.