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Investing.com -- Uber (NYSE:UBER) stock fell 2.5% and Lyft (NASDAQ:LYFT) shares dropped 3.75% on Wednesday after Alphabet’s (NASDAQ:GOOGL) Waymo applied for a permit to test its autonomous vehicles in New York City, signaling potential future competition in one of the largest ride-hailing markets in the U.S.

According to Bloomberg, Waymo has applied for a permit with New York City’s Department of Transportation to operate its vehicles autonomously in Manhattan with a trained human specialist supervising. The company plans to begin collecting data and evaluating its technology in the city starting next month, regardless of the permit outcome.

Waymo currently offers fully autonomous, paid rides in several major U.S. cities including Los Angeles, Austin, Phoenix, and San Francisco. The company is also expanding its partnership with Uber, with plans to offer autonomous trips through Uber’s platform in Atlanta later this summer, followed by Miami and Washington next year.

However, Waymo faces significant regulatory hurdles in New York, where state law doesn’t currently allow for fully autonomous commercial ride-hailing services. The city is known for its challenging urban street environment and stringent regulations on taxi and rideshare services.

The autonomous vehicle company is actively seeking regulatory changes in New York, particularly the ability to operate vehicles with no human behind the wheel. This potential expansion into the lucrative New York market appears to have sparked investor concerns about future competition for established ride-hailing companies like Uber and Lyft, which have historically navigated complex regulatory relationships with the city.

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