Uber Inc. and Lyft Inc. ( LYFT ) shares are trading lower Wednesday following reports that Waymo applied for a New York City testing permit.

What To Know: Bloomberg reported Wednesday that Waymo, the autonomous vehicle subsidiary of Alphabet Inc ( GOOG )., has applied for a permit to test its self-driving taxis in New York City.

Waymo has requested permission from the city's Department of Transportation to begin autonomous testing in Manhattan, though the cars would still be operated with a human safety driver behind the wheel. The company said it plans to begin manual driving with human drivers next month to collect road data and assess the viability of its technology in New York's complex traffic environment.

Currently, Waymo provides fully autonomous rides in markets such as Los Angeles, Phoenix, Austin and San Francisco, and has announced plans to offer rides through Uber's ( UBER ) platform in Atlanta later this summer, with further expansion into Miami and Washington slated for next year.

Despite these developments, commercial autonomous ride-hailing is not yet permitted under current New York City or state law. Waymo emphasized that its efforts are geared toward laying the groundwork for future operations by engaging with regulators and testing in harsh urban conditions. The city's regulatory framework for ride-hailing services remains strict, and companies like Uber ( UBER ) and Lyft ( LYFT ) have long struggled with vehicle caps and labor regulations.

The prospect of Waymo entering New York has added pressure to ride-hailing platforms. Investors appear concerned that autonomous services could eventually undercut traditional rideshare models in high-value markets.

Price Action: Uber ( UBER ) shares were down 1.44% at $83.57 and Lyft ( LYFT ) shares were down 1.51% at $14.73 at the time of publication Wednesday, according to Benzinga Pro.

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