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Uber Technologies has announced a long-term strategic partnership with Rivian aimed at deploying up to 50,000 autonomous taxis over the coming years, reflecting the accelerating competition in the smart mobility sector.

Under the agreement, Uber will invest approximately $1.25 billion in Rivian by 2031, starting with an initial $300 million, with the remaining funding linked to Rivian achieving specific milestones in autonomous driving technology development.

Uber and its partners plan to purchase 10,000 R2 vehicles initially, with an option to expand to an additional 40,000 units in the future. Commercial operations are expected to begin in San Francisco and Miami by 2028, with plans to expand to 25 cities across North America and Europe by 2031.

Uber aims to operate these vehicles exclusively through its platform, seeking to strengthen its competitive position against major players such as Tesla and Alphabet, which operate advanced autonomous vehicle units like Waymo.

However, analysts warn that the widespread adoption of autonomous vehicles could pose a fundamental threat to Uber’s driver-based business model, as technology and vehicle-owning companies could provide direct services to users without the need for an intermediary.

These concerns suggest potential pressure on Uber’s valuation if competitors successfully deliver autonomous ride services at lower costs and higher efficiency, potentially drawing users away from traditional platforms.