Uber bows to pandemic pressure, sells self-driving car business

Uber has agreed to sell its self-driving car business to a startup as the pandemic puts pressure on its core business.

CNBC’s Jessica Bursztynsky reported:

Uber’s self-driving unit, Advanced Technologies Group (ATG), is being acquired by its start-up competitor Aurora Innovation, the companies announced Monday.

The deal, expected to close in the first quarter of 2021, values ATG at approximately $4 billion. The unit was valued at $7.25 billion in Apr. 2019 when Softbank, Denso and Toyota took a stake.

Uber CEO Dara Khosrowshahi will join the company’s board, and the ride-sharing giant will invest $400 million into the company.

Heather Somerville from the Wall Street Journal wrote:

Mr. Khosrowshahi has moved to restructure Uber to deliver on a promise to make the company profitable, scaling back many of its expensive side businesses—including electric bikes and flying cars—that haven’t gained much traction. Uber has wound down its product incubator and artificial-intelligence lab, exited e-bikes and sold a stake in its unprofitable freight-hauling unit. The company has promised to be profitable on an adjusted basis before interest, taxes, depreciation and amortization by the end of next year.

Uber said ATG, combined with other technology programs, incurred a $104 million loss in the third quarter on $25 million in revenue.

CNN’s Matt McFarland noted:

“If Uber doesn’t go there it’s not going to exist either way,” Uber founder Travis Kalanick said in a 2014 interview at the Code Conference. “That’s just the way of the world. That’s the way of technology and progress. Unfortunately we all have to find ways to change with the world.”

But now Uber, which cut 25% of its staff during the pandemic, expects the deal to reduce its costs and contribute to its plan to be profitable excluding certain costs in 2021.

Uber bulked up its self-driving team in 2016 when it bought self-driving truck startup Otto, which was co-founded by a former Google autonomous vehicle employee, Anthony Levandowski.