Uber, hard hit by pandemic, sells its robot vehicle division
Selling its stake to Aurora will help Uber find a quicker path to profitability after tough losses due to pandemic
Uber is selling off its autonomous vehicles development arm as the ride-hailing company slims down after its revenues were pummeled by the coronavirus pandemic.
Self-driving vehicle technology company Aurora will acquire the employees and technology behind Uber’s Advanced Technologies Group in a stock transaction, the companies said on Dec. 7.
Uber will also invest $400 million into Aurora, and Uber’s CEO Dara Khosrowshahi will join Aurora’s board of directors.
After the transaction, Aurora will be worth $10 billion and Uber will hold 26% stake in the company, Aurora CEO Chris Urmson said in an interview.
“Our first product will be in trucking and freight, but we look forward to taking this great team that we have and accelerating that while continuing working on light vehicles and ride-haling, and we’ll ultimately see our vehicles deploying on the Uber network,” Urmson said.
Uber will not have exclusive rights as a ride-hailing company to Aurora’s technology, but the two companies will have a “preferred relationship,” Urmson said.
San Francisco-based Uber will lose a critical piece of its company after the pandemic cut into its finances by suppressing demand for shared rides. Its path to profitability has often been linked with its plans to deploy autonomous vehicles and reduce the high cost of paying drivers.
Aurora, based in Mountain View, Calif., is led by former Google, Tesla and Uber executives. Aurora also has partnerships with delivery giant Amazon and auto companies Hyundai and Kia, among others, but its partnership with Uber is its first official relationship with a ride-hailing company.
The move will help Uber find a quicker path to profitability, said Steven Fox, founder and CEO of Fox Advisors. “It accomplishes the best of both worlds for them. It takes away a big profit drag and keeps them strategically well-positioned for when they want to move parts of their network to be autonomous,” he said.