Uber and Lyft shares are both trading 6% lower in afternoon trading as GM announced its winding down of Cruise.
Earlier, $General Motors (GM.US)$ announced it would stop funding the development of Cruise's robotaxi. GM's decision to halt its support comes as the company reassesses the substantial investment and time needed to grow the robotaxi business in the face of increasing competition in the autonomous vehicle (AV) industry.
GM's news is also noteworthy given that Cruise had previously established a partnership with Uber.
The restructuring will merge GM's broader technical teams with Cruise's staff to focus on autonomous personal vehicles. This move raises uncertainty about the future of Cruise's multi-year agreement with Uber, which aims to launch AVs on the Uber platform in 2025. GM CEO Mary Barra stated that the details need to be finalized from Cruise's perspective, and as a result, she refrained from confirming the status of the partnership.
At 1:57 p.m. ET, GM shares are off 1.38%.
