Uber in talks to promote its autonomous car enterprise to Aurora: Report

  • Uber is in talks to sell its ATG self-driving vehicle division to the autonomous vehicle startup Aurora, TechCrunch reported on Friday.
  • ATG was hampered by a fatal crash, infighting, and unreliable technology – causing investors to lose patience and sparking rumors that the company would attempt to unload the fighting unit.
  • Despite an earlier valuation of $ 7.25 billion, ATG faced an impending round of investments, which TechCrunch said would have a lower value as Uber doubled its core hailstones and food delivery businesses during the pandemic.
  • Aurora, a major player in the AV world, is led by former leaders of AV initiatives at Uber, Google, and Tesla.
  • You can find more stories on the Business Insider homepage.

Uber is looking to get rid of its self-driving vehicle division, Advanced Technologies Group (ATG), and AV startup Aurora Innovation is a likely candidate to acquire it, TechCrunch reported Friday.

Sources told TechCrunch that Uber ATG “bought” from several potential buyers, including some automakers, but talks with Aurora, which began in October, are well advanced.

“We don’t comment on rumors or speculation,” an Aurora spokesman told Business Insider, while Uber didn’t respond to a request for comment.

Despite ambitious goals, ATG has long strived to make significant strides towards a fully autonomous vehicle that can move passengers and goods safely and efficiently while losing money. This has led to speculation in recent months that Uber would attempt to outsource the difficult business unit.

According to TechCrunch, ATG was facing a possible “downside” in which investors considered lowering the division’s valuation from its previous valuation of $ 7.25 billion.

ATGs struggles

Uber launched ATG five years ago, and in its short life the division has been plagued by multiple scandals and setbacks that have made money bleed. Uber reported net losses of $ 303 million for “ATG and Other Technologies” in the third quarter.

Continue reading: Uber ATG has been hampered by a fatal crash, infighting and balky tech – and investors are losing patience with the self-driving division

Employees reported Business Insider’s Julie Bort about a fatal crash in Phoenix in 2018 – the first AV incident to kill a pedestrian – that exposed deficiencies in ATG technology, as well as poor decision-making and infighting. (Uber was not held criminally liable for the incident, while the substitute human driver was charged with negligent murder).

Former head of Uber’s self-driving group, Anthony Levandowski, was also at the center of a massive legal battle between Uber and Google’s self-driving group, now called Waymo, over stolen technology. Uber released Levandowski, who was recently sentenced to 18 months in prison for stealing trade secrets, in 2017 after refusing to testify on the case.

In September, The Information reported that an ATG executive sent an email to Dara Khosrowshahi, Uber’s CEO, warning of flaws in the company’s self-driving efforts before a disaster hits us. “

Troubled investors

The scandals, fighting and the lack of technological progress have made investors impatient.

Bloomberg reported in September that two of Uber’s largest investors, SoftBank and Benchmark, have urged Khosrowshahi to rethink ATG’s strategy and get more outside investments. ATG has been funded by Toyota and Denso for the past few years.

In the midst of the COVID-19 pandemic, Uber has sold some of its less successful side projects like the e-bike startup Jump as it focuses on its core businesses in hailing and grocery delivery.

Uber isn’t the only company having problems with self-driving. The AV industry has left the optimistic expectations that companies and analysts set in the 2010s far behind. Currently, no automaker appears to be anywhere near selling vehicles that can be operated without human oversight, and only Waymo and Motional offer rides in self-driving vehicles to paying customers, and even then in relatively small areas.

Lately, the industry has also been on a wave of consolidation, compounded by the challenges of fundraising during the pandemic.

Aurora is well positioned

However, Aurora, which was launched in 2016 by senior members of the autonomous driving programs from Uber, Google, and Tesla, is on an upward trend.

Several investors told Business Insider’s Mark Matousek that because of its strong founding team, technology, and fundraising ability, Aurora has the greatest potential among self-driving startups (the company is used by major tech, automotive, and financial companies like Amazon, Hyundai and supports T. Rowe Price).

However, at just $ 765.6 million, Aurora is significantly smaller than ATG and would likely need to make outside investments or allow Uber to keep some equity to purchase it.

Mark Matousek and Julie Bort contributed to this story.

Axel Springer, the parent company of Insider Inc., is an investor in Uber.

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