Uber Technologies Inc. sold its self-driving-car unit to a Silicon Valley competitor, Aurora Innovation Inc., The Wall Street Journal reported. This appears to be an attempt by Uber to deliver on a promise to his shareholders to become profitable.
The two companies on Monday said that as part of the deal for the self-driving-car unit, known as Advanced Technologies Group, or ATG, Uber will make a $400 million cash investment in Aurora. Uber said it would hold a roughly 26% stake in Aurora on completion of the deal. Uber Chief Executive Dara Khosrowshahi also is joining the company’s board of directors.
According to The New York Times, “The deal amounts to a fire-sale to a high-profile but star-crossed effort to replace Uber’s human drivers with machines that could drive on their own.”.
The New York Times pointed out that Uber’s self-driving car projects led to the death of a pedestrian in Arizona; a lawsuit from Waymo, the self-driving car company owned by the same parent company as Google; and a guilty plea from a former Uber executive accused of stealing intellectual property.
This year, Uber and Lyft (together) spent almost $200 million to convince California voters to vote “yes” on Proposition 22. In short, Prop 22 (if it passed) would define app-based transportation (rideshare) and delivery drivers as independent contractors and adopt labor and wage policies specific to app-based drivers and companies. If Prop 22 failed, Uber and Lyft would have to pay their workers as employees – with benefits.
The ride-sharing companies got what they wanted when Proposition 22 passed. Curbed wrote: “Uber and Lyft have proved they are able to outright purchase legislation that allows them to shape local transportation policy while actively undermining existing services. Prop 22 demonstrates that not only do Uber and Lyft no longer have to play by the rules, they can now write their own.”
What will Aurora Innovation Inc., do with Uber’s self-driving-car unit? The Wall Street Journal reported that Aurora will focus on the rollout of self-driving technology for heavy-duty trucks. Autonomous passenger vehicles will follow.