Uber Offloads Self-Driving and Flying Taxi Units

This week, the ride-hailing food delivery giant said it would “sell” Advanced Technologies Group to Aurora Innovation. Uber also offloaded Elevate, its flying taxi division, to Joby Aviation.

How the ATG “sale” is structured: Uber gives Aurora $400 million in cash plus ATG, and gets a 26% stake in the startup. The deal values ATG at ~$4 billion, a 45% haircut from when SoftBank, Toyota, and Denso piled $1 billion into the unit last year.

• ATG employees and external investors get a 14% stake in Aurora, which is now a decacorn ($10 billion) with Uber CEO Dara Khosrowshahi as its newest board member.

ATG, Meet Aurora

The Silicon Valley startup is led by Chris Urmson, a veteran of DARPA’s Grand Challenge and Google’s early self-driving mafia.

Uber rushed to roll out autonomous vehicles. Aurora, by comparison, has gradually expanded testing of its vehicle-agnostic virtual “Driver” in the Bay Area, Pittsburgh, and DFW. Though a few automakers have scuttled partnerships with Aurora, its strategy has provided go-to-market flexibility.

• Earlier this year, the pandemic put the brakes on autonomous ride-hailing services.
• In April, Urmson told us he didn’t expect the new normal to “delay our progress in the long-term,” citing Aurora’s investment in simulation software and virtual testing.
• In July, Aurora announced its first product would be in trucking.

Back-of-the-envelope: Aurora passed 600 employees in October. ATG had 1,200 at its height. Even with ATG cuts, it’s likely Aurora’s headcount will double.

Trucking represents a different problem-set than urban driving (Uber’s focus). But ATG’s know-how and R&D will likely come in handy somewhere in Aurora’s tech portfolio.

Big picture

As self-driving consolidation continues, just a few companies could emerge with control of the core technology.

Uber won’t be on that list, but self-driving isn’t out of the equation. It will eventually capture demand for autonomous rides. But Uber must wait on Aurora (or someone else) to fully develop the technology for passenger cars, then license it, then plug robotaxis (and flying taxis) into the network.

+ About those flying taxis: Head here for details on the Uber-Joby deal.