Uber Kicks Its Self-Driving Car Unit Out the Side Door

Uber is bailing on its self-driving car unit, the Uber Advanced Technologies Group, and will sell it off to driverless trucking-focused startup Aurora in a deal that could create a combined firm valued at $10 billion, the companies announced on Monday.

The success or failure of Uber ATG has long been viewed as a key indicator as to whether the company can stop hemorrhaging cash and achieve profitability. Robot drivers would allow the company to tell a considerable number of its human ones to go take a hike, and potentially relieve the company from the regulatory scrutiny it’s faced in states like California over its treatment of the contractors that drive its fleet. (Whether or the robot moonshot would actually work is unclear.)

Prior to this week’s sale, Uber ATG made headlines thanks to a years-long lawsuit with competitor Waymo over an engineer convicted of trade theft, and one of its self-driving vehicles has the dubious distinction of being the first to kill a human being, pedestrian Elaine Herzberg, in 2018.

Uber has tested self-driving cars in several cities, but despite hundreds of millions of dollars in investments, it’s still nowhere close to achieving its dreams of a perfect robot workforce that never complains or asks for raises. So it appears to be cutting its losses and redirecting its energy elsewhere: According to the New York Times, Uber will actually be paying Aurora to take its self-driving unit off its hands, as the “fire-sale” deal will have Uber invest some $400 million in the combined company. Uber will also take a 26 percent stake and CEO Dara Khosrowshahi will join its board of directors. As recently as last year, a Denso and SoftBank Vision Fund deal pegged the ATG’s value at $7.25 billion.

Despite the ATG acquisition, Aurora CEO and co-founder Chris Urmson told the Times that the company’s near-term focus will remain on trucking. Khosrowshahi told the paper that he looked forward to bringing Aurora technology to market “in the years ahead” but had no further comment.

Uber, which has lost billions a year and whose core taxi business has been hit hard by the coronavirus pandemic, is also reportedly selling off its air taxi business, Uber Elevate, to Joby Aviation. This could be charitably described as predictable. As TechCrunch noted, Uber has also recently offloaded its scooter and bike unit, Jump, and sold off a stake in its Uber Freight trucking business.

The Aurora deal will still leave Uber with its finger in the self-driving pie and give it a chance to license any resulting technology.

“Uber can still have a hand in the game, without putting out the enormous amount of money they were spending with A.T.G., but still have a path to market when this technology is actually deployable in several years,” Phantom Auto co-founder and CEO Elliot Katz told the Times.

“One of the most fun things we’ll be doing over the next 60 days is bringing the two teams together,” Urmson told TechCrunch. “And then kind of dispassionately looking at what is the technology that accelerates our first product to market and then amplifying that—whether it’s from the existing Aurora team or to the new Aurora team—and pushing that forward, whether it’s ideas or code or bits of hardware together to accelerate our time to market.”

“… Some of the work they’ve been doing in designing their next-generation hardware for the vehicles is exciting and interesting,” Urmson added. “On the software side, they have really cool stuff in prediction, and how they’ve combined prediction and the perception system together.”