Daily Management Review

Its Self-Driving Car Unit Sold By Uber To A Startup


Its Self-Driving Car Unit Sold By Uber To A Startup
A business unit that was once hailed by Uber’s founder as critical to the future of the ride hailing company, the driverless car subsidiary of the company is being sold by it to start-up Aurora Technologies, effectively also potentially abandoning its ambitions in the area of driverless vehicle development.
The deal will help it "accelerate" its mission to make self-driving cars a reality, said Aurora which was founded in 2017.
$400 million will be invested in the Amazon-backed company by Uber against a stake of 26 per cent in the startup. After the closure of the deal, Dara Khosrowshahi, the chief executive of Uber will also take up a chair on the board of Aurora.
Iber is still interested in the diverless and automated vehicle segment, the company said even though it has sold off its driverless car subsidiary known as Advanced Technologies Group. The company added that it has plans to collaborate with Aurora when it would be necessary to launch driverless cars on its network.
"Few technologies hold as much promise to improve people's lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles," Khosrowshahi said. "For the last five years, our phenomenal team ... 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," he said.
When the ride hailing company was being led by its Dara Khosrowshahi, one of the key priorities of the company was to develop driverless technology because he believed that it was a good way to reduce costs of business.
But after one of its cars was involved in a deadly crash in Arizona, the ambitions of the company and the programme hit setbacks even though government agencies declined to bring criminal charges against the company and instead had pinned the blame of the accident on human error.
Legal fights over allegations of technology theft have also been levelled against the driverless car unit.
The focus of the company has now been shifted to taxi and food delivery services in an effort to make Uber a profitable company under the leadership of Khosrowshahi who replaced Kalanick as the head of Uber in 2017.
Uber's Advanced Technologies Group has been valued at roughly $4 billion according to the deal with Aurora which is lower than estimates of $7.5 billion that were made for the company last year according to reports back then. Uver said that it expects the deal to be completed in the first three months of 2021.
Former veterans of the deiverless car units of Google and Uber currently lead Aurora. "Significant investment" from Amazon has been received previously by it, Aurora said. The largest e-commerce company of the world is also known to be exploring the possibility of driverless delivery vehicles. Aurora, with offices in four US cities, has also been backed by the South Korean car maker Hyundai.