Waymo will terminate its exclusivity agreement with Uber in Austin and Atlanta, launching its own application in January 2028.

      Waymo is set to launch its own app in Austin and Atlanta in January 2028, marking the end of its exclusive robotaxi partnership with Uber in those cities. Waymo has informed Uber of its plans, which an Uber spokesperson confirmed to CNBC and Bloomberg on Friday. This change will allow Uber to incorporate other autonomous vehicle providers in these markets. Following the announcement, Uber's shares dropped over four percent, closing below $66, the lowest in over a year.

      The current agreement between the two companies ensures that Waymo's fleet will continue to operate through the Uber app until at least May 2028, so riders won't notice an immediate impact. However, this notice highlights a shift that has been evident for months: Waymo has not introduced any new Uber cities since starting its Atlanta service last June, opting instead to expand into six new markets via its own app. The Financial Times was the first to report on Waymo's consideration to exit the partnership completely.

      On the behind-the-scenes front, Uber has expressed frustration with Waymo over several issues, including what it considers unsustainable financial models, ongoing safety concerns, and a lack of transparency from Waymo regarding incidents, as reported by Bloomberg. These incidents include robotaxis navigating flooded roads despite software recalls, illegally overtaking school buses in Austin, and numerous empty vehicles circling a cul-de-sac in Atlanta—an incident Waymo attributed to Uber's routing. Uber noted that it discovered the school bus incidents through media rather than internal communication.

      The split follows Waymo's recent discreet departure from Phoenix, where the partnership lasted nearly three years. Waymo now operates in 11 metro areas in the U.S. independently of Uber, providing over 500,000 paid rides weekly, making a limited partnership with a ride-hailing aggregator less justifiable. Lyft CEO David Risher previously described his company's arrangement with Waymo as a "situationship," recognizing that Waymo wields significant leverage due to its control over vehicles, software, and the rider relationship.

      For months, Uber has been preparing an alternative strategy, investing in competitors like Avride and Nuro, and making a deal exceeding a billion dollars for up to 50,000 Rivian-built robotaxis. However, none of these partners match Waymo's scale, and several are not expected to have operational vehicles until late this year or beyond. Uber's stock has dropped approximately 20 percent this year, largely fueled by investor concerns that Waymo's expansion may eventually diminish the business that only reported its first annual profit in 2023.