[UPDATED]: Uber is selling its ATG self-driving car division to an autonomous vehicle startup Aurora Innovation, Inc., in a deal valued at about $4 billion, according to people familiar with the matter. The ride hailing company is also making a $400 million cash investment for approximately 26% ownership interest in Aurora, as per the latest filing.
Uber’s unit of the self-driving car known as Uber Advanced Technologies Group aka UberATG, eighteen months ago, was valued at a whopping $7.2 billion after it raked in $1 billion in investments from the likes of Toyota, DENSO and SoftBank’s Vision Fund. But now, it seems like the transportation giant is all set to bid adieu to it.
According to sources familiar with the ongoing talks, Uber might sell this division to Aurora Innovation which is an autonomous vehicle startup.
The terms of the deal are still not known. However, sources say that the two companies have been holding discussions since October and therefore they are nearing towards the end of the decision.
Aurora was founded in the year 2017 by the former lead engineer for Google’s self-driving project Chris Urmson. The startup’s primary focus is to develop technology for self-driving trucks. The firm, recently valued close to $2.5 billion, as of July said that it was expanding its testing of autonomous vehicles in the state of Texas.
Now, if the talk materialises, it will undoubtedly be a huge relief for Uber as they have long been plagued with multiple problems due to the UberATG division.
In February 2017, Google’s self-driving project Waymo filed a lawsuit against UberATG for alleged theft of trade secret and patent infringement after which the latter had to end the feud in the out-of-court settlement in 2018.
As per the terms of the settlement, Uber agreed that would not incorporate Waymo’s confidential information into their cars hardware and software. They also had to agree to pay Waymo a financial settlement that included 0.34% equity which, at the time, was close to $244.8 million.
After this debacle, came the criminal charges in the same year. Uber’s ATG division was involved in the first-ever death involving an autonomous car in 2018. U.S federal investigators in their findings declared that Uber, the safety driver, and Arizona State, all shared some portion of the accident. However, the transportation giant was able to escape the charges in 2019.
That incident then resulted in the end of Uber’s pilot program in Tempe after which everything started going downhill for UberATG. A quick glance at the most recent earnings report of Uber will disclose that its “ATG and other technologies” segment had only $25 million in revenue in the Q3 2020 against a net loss of $303 million for nine months ended September 30th.
But how did it come to this?
Well, Uber estimated that they could have close to 75,000 autonomous vehicles on the road by early 2019 and operate driverless taxi services in 13 cities by the year 2022. Thus, to fulfil their extremely ambitious goals, the company was spending a whopping $20 million a month on developing self-driving technologies.
All in all, it looks like the ATG unit of Uber was merely a set of continuous bad omens, and therefore Aurora acquiring the Uber’s division would probably benefit the ride-hailing giant in the long term.
As of now, Uber has declined to comment on the supposed deal while a spokesperson from Aurora in an email stated that they don’t wish to comment on rumours and speculations. We will keep you updated on all future developments. Until then, stay tuned.
