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Autonomous VehiclesBusinessNews

Uber hands over autonomous driving unit to Aurora

As the industry shift to trucking and food delivery accelerates, the company also is reportedly selling its flying taxi division.

Uber (NYSE: UBER) is handing over its troubled self-driving vehicle unit to Amazon-backed Aurora as the tech giant continues to unload unprofitable business divisions and the industry moves away from robotaxis to autonomous trucking and food delivery.

As part of the equity deal, Uber will invest $400 million in Aurora and get a 26% stake in the company, an Aurora spokesperson told FreightWaves. Uber CEO Dara Khosrowshahi is joining the board.

The acquisition and Uber’s new investment brings Aurora’s value to $10 billion.

While the Uber unit focused on passenger vehicles, Aurora will prioritize self-driving truck operations, Aurora CEO Chris Urmson said in a Monday blog post announcing the news.

Reiterating that statement, the spokesperson said in an email that “we believe delivering the Aurora Driver in trucks will come first.” But Aurora will continue to work on passenger applications, according to the spokesperson, and will work with Uber to launch and commercialize self-driving vehicles on Uber’s ride-sharing network “in the years to come.”

End to troubled chapter

The sale marks a humbling and expensive move for Uber, which shelled out $2.5 billion as it struggled to blaze a trail in autonomous vehicles. 

The company’s purchase of Otto Trucking led to an intellectual property lawsuit with Google

One of Uber’s test vehicles also struck and killed a pedestrian in Arizona in 2018, forcing the company to temporarily suspend operations and completely overhaul operations.

Adding to the company’s woes were reports suggesting Uber’s technology prowess was lacking compared to competitors, Josh Kern, an analyst with Lux Research, told FreightWaves. The Aurora sale/equity deal, he added, allows Uber to “decouple from the self-driving business but still have a stake in it.”  

Once the deal closes, a majority of Uber ATG (the self-driving division) employees will move to Aurora, the spokesperson said.

Uber tightens its belt

The Aurora deal comes as Khosrowshahi goes on a selling spree, offloading Uber’s money-losing business divisions in an effort to make the company profitable.

Included in a flurry of Uber dealmaking over the past year is its acquisition of Latin American grocery delivery firm Cornershop and food delivery firm Postmates — and the sale of its Jump bike and scooter-rental business. 

In that context, the sale of Uber ATG is part of a broader industry shift away from passenger vehicles and toward delivery and long-haul trucking.

Autonomous trucking gets another contender

Founded in 2016, Aurora is part of that trajectory, with the company saying last spring that it would prioritize the development of semi-trailer trucks over that of cars, its original focus. 

Aurora is late to the trucking game, as other startups have “a big head start,” Richard Bishop, a leading expert on autonomous trucking, told FreightWaves.

Nevertheless, the company was already bringing “significant expertise to the game,” Bishop said in an email, and now, with the Uber acquisition, “they can benefit from a new infusion of highly seasoned talent, plus Uber’s cash.” 

The future of AV trucking will be one in which multiple automated driving vendors can compete, Bishop added. So “there’s room for Aurora.”

Aurora is currently testing its autonomous Class 8 trucks from Peterbilt Motors and Chrysler Pacifica minivans in Texas, the San Francisco Bay area and Pittsburgh. 

Uber Elevate grounded

In another sign of belt tightening, Uber is reportedly selling its flying taxi unit, Uber Elevate, to Joby Aviation, a startup working on small vertical-takeoff-and-landing (VTOL) technology.

Uber was one of several technology companies to announce interest in electric autonomous air travel several years ago, and a model of its futuristic flying machine has been one of the star attractions at the Consumer Electronics Show over the past two years.

Last year, Uber starting offering helicopter trips from Manhattan to John F. Kennedy International Airport. It also moved the air taxi division to a new office in Dallas.

Joby and Uber did not immediately return FreightWaves’ requests for comment.

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to lbaker@freightwaves.com.

One Comment

  1. It seems to me that this should happen long ago. Maybe I’m thinking wrong, but after the incident in 2018, people’s trust was finally undermined. The statistics were already “bad” in terms of the number of skeptical people, but over time it does not get better. Although such cars drive better than people, according to the principle of a safe driver (opinion https://blog.andersenlab.com/de/can-self-driving-cars-drive-better-than-we-do), the engineers themselves say now that there are problems, for example, with adaptation to the regions (and so on). Therefore, I do not understand how it is possible to test cars, being not completely sure of their safety, moreover to sell them. I also read that Aurora is planning to introduce automated trucks. I don’t think there is any need to explain that I don’t believe in this at all. How do you think, do they have a chance of success? (people’s trust, spread of autonomous driving)