UBER Technologies is handing Waymo at least a partial victory in the driverless-car race. The ride-hailing service is paying Alphabet’s self-driving unit $245 million in equity, ending a legal fight over trade secrets. More importantly than the money, though, the settlement recasts an existential question about Uber.

Autonomous vehicles are the ultimate goal for the company, which wants a slice of a ride-sharing market General Motors sees as becoming worth more than $1 trillion a year as technology develops and costs fall. Uber has plenty of cash.

But a net loss of $1.5 billion in the third quarter last year suggests that despite massive scale, strong growth and exiting unprofitable markets it can’t make money with human drivers who need to be paid.

A reasonable conclusion is that the company now led by Dara Khosrowshahi needs to be in the vanguard of AV technology if it is to justify its $70 billion-odd headline valuation.

The ride-hailing service is paying Alphabet’s self-driving unit $245 million in equity, ending a legal fight over trade secrets

Based on a broad assessment by Navigant, that’s not the case. The consultancy looks not just at the various players technological prowess but also their potential ability to put fleets of vehicles on roads, along with other factors.

GM, other traditional automakers and Waymo are frontrunners in Navigants analysis. Uber is a long way back. Admittedly it shares its bracket with Apple and Tesla, companies with enough cash and ideas, respectively, to change the picture. But its less clear how Uber might work its way to the front of the pack.

To be fair, the spat it got into with Waymo, over information allegedly kept by a former Alphabet employee whose self-driving start-up was acquired by Uber, isn’t necessarily a black mark against its own tech. The company is, after all, already offering actual AV rides in some U.S. cities. And Uber says it didn’t use Waymo’s know-how.

The settlement is also an example of Khosrowshahi closing the book on another of Uber’s long list of past missteps. The deal pales beside Waymo’s claim for at least $1 billion, and it’s not even in cash. But the niggling question about Uber’s technology remains. If driverless cars are its only road to profitability, it needs to be a leader not playing catch-up.

Published in Dawn, The Business and Finance Weekly, February 12th, 2018