Bernstein views General Motors’ robotaxi news as negative for Uber, Lyft

Commenting on General Motors’ (GM) announcement that it was “killing the ignition” on Cruise, Bernstein says that while this removes a key downside risk to GM cash flows, it also dismantles one of the company’s key strategic pillars and differentiators. Management did not provide a clear answer on the pending Uber (UBER) AV relationship that was announced a few months ago, but Bernstein’s read of the situation is that this partnership won’t materialize for now. The firm says that at first glance this seems to put the capital onus on Uber to fund the program even if it is to stay alive, which Bernstein is not sure is realistic/desired from an Uber perspective. This announcement also leaves the firm with too many questions about the readiness of Cruise AV tech. Bernstein views the news negatively for Uber (UBER) and Lyft (LIFT) as it points to a more consolidated AV market. The firm has a Market Perform rating on General Motors’ shares, which are trading lower at $51.95. Also lower, Uber’s stock has dropped more than 5% to $61.57, while Lift has slid almost 7% to $15.11.