Self-driving cars are one of the hottest concepts in the tech world today. However, it seems that not every company is willing to play the long game. On Friday, TechCrunch reported that Uber is considering selling its autonomous vehicle segment to a startup (and competitor) called Aurora Innovation.
The two are reportedly in talks to make the deal happen. Although it isn’t clear why Uber is trying to offload its self-driving car business, there is plenty of speculation. The division has been the center of many legal problems. For one, it narrowly avoided criminal charges after an autonomous Uber vehicle killed a pedestrian in 2018.
Regardless, it is interesting that Uber is stepping away from self-driving cars at the same time that other companies are making the sector a top priority.
Uber’s reported interest in selling its autonomous driving division certainly goes against trends in the industry. Companies and startups of all sizes are pursuing their own self-driving solutions that could redefine not only the future of ridesharing but also the future of transportation in general.
While Aurora is much smaller than Uber, it has a noteworthy group of backers. The startup has received investments from the likes of Amazon and Hyundai. Meanwhile, it has a bright team of ex-Googlers and engineers from other Big Tech firms behind it. Aurora’s most recent valuation placed it in the neighborhood of $2.5 billion.
Uber’s Advanced Technologies Group (ATG), the umbrella containing its self-driving division, also has an impressive list of backers. It has garnered support from the likes of Toyota, SoftBank, and Denso. Last year, those companies teamed up to invest $1 billion in the division, raising its valuation to $7.25 billion.
According to Uber’s latest financial records, the segment earned just $25 million in the third quarter of this year. That shouldn’t be surprising considering that it is only operating a small pilot program and isn’t yet transporting passengers. Even so, Uber’s ATG division realized a net loss of $303 million during the first three quarters of 2020.
Both Uber and Aurora have declined to provide info regarding the deal. With that in mind, it remains unclear what the timeline for a potential agreement looks like.
Consumers still have plenty of doubts about self-driving cars. That isn’t unreasonable. After all, autonomous vehicles have found themselves in some difficult and tragic situations in recent years. Unfortunately for Uber, its ATG vehicles have often been at the center of those events.
As mentioned, Uber was found to be partially responsible for the first death caused by an autonomous car after one of its vehicles struck and killed a woman in Tempe, Arizona.
The division came under fire again when its former self-driving lead was accused of stealing technology from Waymo, his former employer. He later received an 18-month sentence and Uber unexpectedly settled the case in February 2018.
While Uber has been battling problems with its self-driving division, companies like Waymo, Cruise, and a slew of traditional carmakers have enjoyed success. Many are already transporting passengers via small pilot programs while others are nearing the same milestone.
For Uber’s ATG division, a change of ownership might be a good idea. Aurora could spark new life into the division and greatly improve its own prospects in the process. Uber would benefit from an influx of cash to help offset some of the losses it has suffered due to the COVID-19 pandemic.
Stay tuned to The Burn-In as this story unfolds and the two continue to discuss a possible deal.