Uber will acquire a 26% stake in Aurora and invest $ 400 million in the Silicon Valley-based startup that makes software for autonomous vehicles and lists Amazon among its investors.
Chris Urmson, CEO of Aurora, previously led Google’s self-driving car program. Uber and Aurora say they have also formed a strategic partnership to bring self-driving cars powered by Aurora to the Uber app.
Over ( started its self-driving endeavor in Pittsburgh in 2015 when 40 Carnegie Mellon University researchers were poached. The company called Uber ATG (Advanced Technologies Group) would later grow to over 1,000 employees. )
Uber believed that the development of self-driving cars was vital as self-driving cars could make human-powered vehicles expensive and irrelevant.
“If Uber doesn’t go there, it won’t exist either way,” said Uber founder Travis Kalanick in a 2014 interview at the Code Conference. “This is just the way of the world. This is the way of technology and progress. Unfortunately, we all have to find ways to change with the world.” But now, Uber, which cut 25% of its workforce during the pandemic, expects the deal to lower costs and add to the plan’s viability at no specific cost in 2021.
Uber grew its self-driving team in 2016 when it bought self-driving truck startup Otto, which was co-founded by Anthony Levandowski, a former employee of an autonomous Google vehicle.
Waymo, Google’s self-driving company, sued Uber in February 2017 for theft of trade secrets and intellectual property. Levandowski was fired from Uber in May after failing to partner with the company on the case. The lawsuit was settled in February 2018, with Waymo receiving approximately $ 245 million in Uber stock and Uber agreeing not to use Waymo proprietary information. A month later, Uber suffered another blow to its self-drive program when one of its test vehicles struck and killed a pedestrian in Tempe, Arizona. An Uber test driver behind the wheel to monitor the vehicle and intervene if necessary, was watching a TV show on her phone. After the death, Arizona Governor Doug Ducey suspended Uber’s testing ability on state highways and Uber was shut down. Uber operated there in May 2018. Three hundred workers were laid off, but Uber continued operations in San Francisco and Pittsburgh. The National Transportation Safety Board blamed the distracted driver for the crash, but said an inadequate safety culture at Uber contributed to the death. Uber made significant changes after the crash, which the NTSB credited.
The death was the first ever death to be caused by a fully self-driving vehicle and a black eye for an industry that lists safety as one of its main motivations. More than 35,000 Americans die on the roads every year, and self-driving companies believe their technology can dramatically improve safety.
Urmson, CEO of Aurora, said in a blog post on Monday that Uber ATG’s security work was one of the reasons it acquired Uber ATG.
“They have also worked tirelessly over the past few years to build an experienced security team from a variety of backgrounds,” said Urmson.
He also said that Uber’s know-how in ride-hailing gives Aurora the opportunity to lead the industry in passenger mobility.
Not all Uber employees in Uber ATG will be moving to Aurora, including CEO Eric Meyhofer. Aurora has pledged to make offers to the majority of ATG employees, according to an Uber spokesperson.
The deal is expected to close in the first quarter of 2021, according to an Aurora spokesperson. Dara Khosrowshahi, CEO of Uber, joins Aurora’s board of directors. Uber’s shares fell less than one percent after the market closed on Monday.
The partnership also gives Aurora a connection with an automaker, Toyota, which has invested in Uber ATG. While Aurora develops sensors and software for self-driving vehicles, it needs a partner to manufacture the vehicles. Aurora competitors like Waymo, Cruise and Argo AI all have deals with automakers. Toyota did not immediately respond to a request for comment.