Uber is out of the self-driving vehicle game.

The ride-hail giant on Monday announced that it sold its Advanced Technologies Group to self-driving car startup Aurora for $4 billion, ridding itself of a source of major cash burn.

Along with the sale — which represents a major discount from the $7.25 billion valuation the division had just last year — Uber will invest $400 million in Aurora, giving it a 26 percent stake in the company. Uber and Aurora will additionally enter a deal to launch self-driving vehicles on Uber’s ride-hailing network, the companies said.

The sale will accelerate Uber’s goal to achieve profitability on an adjusted basis by the end of 2021, CEO Dara Khosrowshahi told Reuters. “This essentially advances our path to profitability,” Khosrowshahi said. “With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, co-founder, and CEO of Aurora, said in a statement. “Simply put, Aurora will be the company best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible, and less expensive.”

“Few technologies hold as much promise to improve people’s lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles,” said Khosrowshahi in a statement. “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.”

Aurora is backed by Hyundai, Amazon and major venture firms including Greylock and Sequoia. TechCrunch first reported in November that the two companies were in talks for ATG. Uber’s co-founder and former CEO Travis Kalanick had viewed self-driving as an essential investment, saying in 2016 he believed the world would shift to autonomous vehicles. ATG had been a long-term play for Uber, but the unit brought high costs and safety challenges. Throughout the course of a pandemic-stricken year, Uber has made efforts to stem losses in its ride hailing business, control business costs — including with major layoffs in the spring — and to grow its delivery business.

Earlier this year, Uber stirred up controversy by transferring Jump, its electric bike sharing subsidiary, to Lime — another micro-mobility company in which the ride hail giant had invested. Uber acquired Jump outright in 2018 with the stated intention of running and growing that brand independently.

Todd Horwitz Chief Strategist BubbaTrading.com
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