Uber Sells Its Disastrous Self-Driving Division
Once thought of as Uber’s shot at profitability, the autonomous car division is off to a new home.
Uber will sell its self-driving division Advanced Technologies Group to Aurora Innovations, reports The Verge. The two companies announced the sale Monday. Aurora Innovations is a San Francisco autonomous driving startup founded in 2016 by the former lead engineer of Google's self-driving unit, Chris Urmson.
Uber will invest $400 million in Aurora, gain a 26% stake in Aurora, and Uber CEO Dana Khosrowshahi will join Aurora's board as part of the deal, CNBC reports. Aurora's valuation, which was formerly a competitor to Uber's Advanced Technologies Group, shot up to $10 billion even though they'll face the same challenges Uber has had with developing the technology. That's up from $7.25 billion in April 2019, when Toyota, Denso and Softbank took stakes in Aurora. Aurora also has backing from Hyundai, Amazon, and several major venture capital firms.
As the pandemic continues to affect Uber's primary ride-hailing business, Uber has looked for numerous ways to get to profitability, including layoffs and sales of its less profitable divisions. Uber has yet to have a profitable quarter—ever—even as it's been the subject of much hype. So far, the company has sold its pie-in-the-sky autonomous air taxi unit as well as part of its freight division.
The self-driving Advanced Technologies Group was supposed to be its ticket to profitability—as in, a way to avoid paying drivers. As we all know, there are no self-driving cars on the road today, and the technology is far away from being able to run without a minder behind the wheel making sure it doesn't mess up.
Thus, Uber determined that it's better for someone else to play the expensive long game. The company has had autonomous vehicle development has had numerous issues with safety along the way, including the March 2018 death of Elaine Herzberg, who was struck by an Uber test vehicle. The test vehicle's minder later faced criminal charges for streaming The Voice on her phone when Herzberg was hit, per The Verge. Uber dramatically scaled back its autonomous car testing after that incident, although it recently released plans to test its third-generation vehicle in San Francisco and Washington, D.C.
Uber's self-driving woes weren't only about safety issues, either. Waymo, the self-driving company spun off from Google, sued Uber in 2017 over Uber allegedly stealing Waymo's trade secrets. This led to a settlement between the two companies and an 18-month jail sentence for Uber engineer and former Google employee Anthony Levandowski, The Verge notes. Levandowski was fired from Uber for not cooperating with the investigation.
“Few technologies hold as much promise to improve people’s lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles,” Khosrowshahi said in a statement about the sale quoted by CNBC. Here's hoping that Aurora takes that safety element a lot more seriously.
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