Uber sells autonomous vehicle division to start-up
Uber is to sell its autonomous driving unit to start-up Aurora, in a deal designed to accelerate the firm’s attempts to become profitable.
Despite being the largest ride-sharing firm in the world, Uber has consistently failed to make a profit since its inception. The company lost around $8.5bn in 2019.
Under the new deal, Uber will invest $400m into self-driving vehicles start-up Aurora to hold a 26 per cent stake in the firm and Uber’s CEO Dara Khosrowshahi will join its board of directors. Aurora will also take control of Uber’s Advanced Technologies Group (ATG) and incorporate its team and technology into its own.
Uber has long been hedging its bets on driverless technology as a way to reach profitability and avoid the high cost of driver acquisition and onboarding as well as regulatory pressure to ensure hourly wage minimums.
It has also faced court battles following a fatal crash in one of its driverless cars that caused the death of a pedestrian and negative press for the firm.
Uber had already started pulling resources away from autonomous R&D as early as 2018 when it ceased development on a proposed line of self-driving trucks.
Aurora believes that the autonomous trucking sector is where its first commercial vehicles will become available, although the new acquisition considerably bolsters its passenger mobility credentials.
“Few technologies hold as much promise to improve people’s lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles. For the last five years, our phenomenal team at ATG has been at the forefront of this effort—and in joining forces with Aurora, they are now in pole position to deliver on that promise even faster,” Khosrowshahi said.
After the transaction, Aurora, which is led by former Google, Tesla, and Uber executives, will be worth $10bn.
It already has partnerships with delivery giant Amazon and automakers Hyundai and Kia, among others, but its partnership with Uber is its first official partnership with a ride-hailing company.
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