Is Uber and Joby Aviation's Collaboration Truly the Future of Flight?

Joby Aviation (JOBY 2.83%) is one of several companies working to build electric vertical-lift short-haul aircraft. It is an interesting concept, since these vehicles amount to air taxis.

The recent announcement that Joby is teaming up with Uber Technologies (UBER 1.58%) seems like a perfect combination, given that Uber provides an app that, effectively, allows you to quickly and easily hail a ride. Is this the future of flight?

What does Joby Aviation do?

Joby doesn’t generate much revenue right now. However, it spends huge sums of money on research and development. That tracks, since it is trying to build a type of aircraft that doesn’t really exist right now. There are other companies trying to do the same thing, but they are all basically still working to get their aircraft approved for commercial use.

Image source: Getty Images.

Put simply, Joby is a money-losing start-up still trying to prove that it has a viable technology to offer the world. That said, things are moving forward with regulators, and it increasingly looks like Joby – and some of its peers – are on the cusp of carrying their first passengers. It expects to carry customers later in 2026 in Dubai in the United Arab Emirates, with the longer-term goal of gaining approval in the U.S. market.

What does Uber do?

Uber, by contrast, has a well-established business. It uses an app to connect drivers with passengers, and it disrupted the taxi business. So, it makes complete sense that Uber would want to pair up with a company that operates an air taxi service. And it is logical for a company like Joby to start out by pairing up with Uber, effectively gaining access to its large customer base.

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NYSE: JOBY

Joby Aviation

Today’s Change

(-2.83%) $-0.28

Current Price

$9.61

Key Data Points

Market Cap

$9.4B

Day’s Range

$9.33 - $10.07

52wk Range

$4.96 - $20.95

Volume

355K

Avg Vol

25M

Gross Margin

-3006.27%

This could be a very good combination, but will it upend the aerospace industry as we know it? No, probably not. While air taxis are exciting, they will be most useful in regions that face traffic congestion. Thus, they are most likely to be offered in and around large cities.

Their range limits their usefulness beyond a small geographic area. So, if you want to fly from New York to Los Angeles, you will still need to get into a regular airplane. However, there is a chance that Joby and Uber could materially alter the way people travel in metropolitan areas.

Is Joby worth buying?

For Uber, this partnership is a pretty low-risk way to expand its business. Right now, the deal isn’t likely to be particularly meaningful and won’t be for a long time. This partnership isn’t a strong reason to buy Uber.

In fact, the entire concept of an air taxi service still has to be proven, and it could ultimately fail to meet expectations. That’s important to consider when you examine Joby Aviation’s stock.

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NYSE: UBER

Uber Technologies

Today’s Change

(-1.58%) $-1.21

Current Price

$75.44

Key Data Points

Market Cap

$155B

Day’s Range

$75.14 - $78.25

52wk Range

$60.63 - $101.99

Volume

26K

Avg Vol

21M

Gross Margin

32.89%

As noted, Joby remains a money-losing start-up. Even after carrying its first commercial customers, it will remain mired in red ink. And that isn’t likely to change for at least a few more years as it continues to work toward gaining broader approval of its aircraft.

The stock has also been highly volatile. Over the past year, it is up 40% and also down 50% from its 52-week high. Only the most aggressive growth investors should consider the stock right now. But it might make sense for less aggressive investors to keep it on their watch lists.

If air taxis succeed, the long-term opportunity could span decades. That’s because Joby Aviation will not only build its own air taxi services but will likely also become an aircraft supplier to other companies. The Uber agreement could help speed up the realization of the opportunity, but the real opportunity isn’t tied to just this one agreement.