- Uber is in talks to sell its troubled autonomous-vehicle division, ATG, to the startup Aurora Innovation, TechCrunch reported.
- ATG has struggled to make visible progress on self-driving, so the talks may be driven more by Uber's desire to rid itself of the unit than Aurora's interest in ATG's assets, analyst Sam Abuelsamid said.
- A sale would allow Uber to take ATG's losses off its books while retaining the ability to benefit if a merger between Aurora and ATG were successful.
- Aurora would get access to ATG's workforce and technology while gaining an investor that could help with future fundraising efforts.
- Are you a current or former employee of Uber or Aurora? Do you have an opinion about what it's like to work there? Contact this reporter at [email protected], on Signal at 646-768-4712, or via his encrypted email address [email protected]
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Uber CEO Dara Khosrowshahi has spent the past three years dialing back the "growth at all costs" strategy pursued by former chief executive Travis Kalanick by exiting markets and shedding businesses that have weighed on the ride-hailing firm's bottom line without offering significant long-term upside.
His next move, according to TechCrunch, could be a sale of Uber's autonomous-vehicle unit, the Advanced Technologies Group (ATG). The likeliest buyer is the startup Aurora Innovation, which is backed by Amazon and helmed by Google's former self-driving chief, Chris Urmson. TechCrunch reported earlier this month that a deal has not been finalized, but talks between the two companies are "far along in the process."
Selling ATG would mark a profound shift from Kalanick's perspective on automated-driving technology. In 2016, the former CEO told Business Insider that being the leader in autonomous vehicles was a matter of life-or-death for Uber.
"If we are not tied for first, then the person who is in first, or the entity that's in first, then rolls out a ride-sharing network that is far cheaper or far higher-quality than Uber's, then Uber is no longer a thing," Kalanick said at the time.
Sam Abuelsamid, an analyst at Guidehouse Insights who covers mobility and the autonomous-vehicle industry, told Business Insider that TechCrunch's report surprised him. From the outside, it doesn't appear ATG has made much progress developing its technology, Abuelsamid said, so the talks may be driven more by Uber's desire to rid itself of the troubled project than Aurora's interest in ATG's assets.
"I'm not sure why Aurora would necessarily want them," Abuelsamid said.
Uber ATG was last valued at $7.3 billion, which would likely be out of Aurora's price range in an all-cash purchase — it has raised a total of $766 million. But that wouldn't make a deal impossible. Uber could exchange ATG for an equity stake in Aurora, Abuelsamid said, following a playbook the ride-hailing firm has used for prior deals, like when it offloaded its bike and scooter business to Lime earlier this year.
Such a move would allow Uber to take ATG's losses off its books while retaining the potential to benefit from a successful merger between Aurora and ATG, while Aurora would get access to ATG's workforce and technology while bringing on a new investor that could help with future fundraising efforts, Abuelsamid said.
The autonomous-vehicle industry is relatively young, which creates a more limited pool of experienced talent than one would find in the auto and consumer-tech industries. ATG has more than 1,200 employees, according to TechCrunch — roughly double Aurora's staff. That could help Aurora quickly expand its workforce as competitors like Waymo, Cruise, and Argo AI continue to grow.
"We don't comment on rumor or speculation," an Aurora spokesperson said.
Uber did not respond to a request for comment.
ATG has struggled to live up to its promise since it launched in 2015, as the unit has suffered from a fatal accident, a major lawsuit, and internal conflict. This year, two of Uber's major investors, SoftBank and Benchmark, have reportedly pushed the company to find more outside funding for ATG.
Founded in 2017, Aurora is making an automated-driving system it plans to sell to other companies. The startup's near-term focus is on heavy-duty trucks, but it has said its tech will eventually find its way into other applications. One of Aurora's founders, Drew Bagnell, worked at Uber ATG before launching the startup.
Are you a current or former employee of Uber or Aurora? Do you have an opinion about what it's like to work there? Contact this reporter at [email protected], on Signal at 646-768-4712, or via his encrypted email address [email protected]
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