Uber Technologies, Inc. (UBER) shares dropped 4.3% on Friday, with selling accelerating in the final hour of trading, following a Financial Times report that Waymo is exploring an exit from their ride-hailing partnership.

The two companies have been operating together since 2023, with Waymo autonomous vehicles currently available on Uber's app in Austin and Atlanta. Waymo, owned by Alphabet Inc., is one of the most visible U.S. robotaxi operators, making the partnership an important piece of Uber's effort to offer autonomous rides through its existing marketplace.

According to the Financial Times, citing people familiar with the matter, Waymo has held internal discussions about terminating its agreements with Uber. Reuters was unable to independently verify the report, and neither company provided comment.

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WAYMO EXPLORES OPTIONS TO EXIT PARTNERSHIP WITH $UBER : FT

Waymo has held internal talks about ending its robotaxi deals with Uber as the companies clash over service quality, safety and robotaxi regulation.

Waymo vehicles in Austin and Atlanta are currently available only… pic.twitter.com/pwyP4e44ZB

— Wall St Engine (@wallstengine) July 24, 2026

Operational Frictions Mount

Tensions between the two companies have been escalating over multiple operational issues. Waymo has raised concerns regarding vehicle cleanliness and routing. Uber, in turn, has objected to what it describes as "unsustainable financial terms" and has complained about Waymo vehicles going offline during adverse weather conditions.

Those disputes matter because robotaxi services depend not only on autonomous driving systems but also on fleet management, customer support, uptime, routing, and local operating rules. In a marketplace model such as Uber's, service consistency affects the rider experience even when the vehicle technology is supplied by a third party.

One individual familiar with the situation told the Financial Times that the two companies are "pursuing diverging objectives."

Phoenix Partnership Already Dissolved

Signs of the deteriorating relationship had already surfaced. In late June 2026, the two companies quietly ended their self-driving partnership in Phoenix, Arizona, a market where they had been operating together.

Waymo has since formally notified Uber of its intention to enter the Austin and Atlanta markets independently beginning in January 2028, the point at which their current contract permits independent entry.

Competitive Dynamics Intensify

The friction extends beyond day-to-day operations. The Financial Times reports that both companies are actively lobbying lawmakers to shape robotaxi legislation in ways that favor their respective business models, frequently at the expense of the other.

Uber has relied significantly on third-party autonomous vehicle providers, including Waymo, to develop its robotaxi presence without owning the underlying technology. Should Waymo withdraw, Uber would need to turn to other autonomous vehicle partners or substantially revise its strategy. For Waymo, direct entry would give the company more control over how its robotaxi service is presented and operated in those markets, subject to the terms of the existing contracts and local regulation.

Alphabet Inc. (GOOGL) stock edged up 0.65% on Friday, while Uber absorbed the majority of investor concern, closing with a 4.31% loss.

The two companies remain partners in Austin and Atlanta for the time being. January 2028 marks the contract date when independent market entry becomes permissible.