Uber is looking to eliminate its own self-driving vehicle division, Advanced Technologies Group (ATG), and AV startup Aurora Innovation is a possible candidate to obtain it, TechCrunch reported Friday.
Sources told TechCrunch that Uber”has been searching” ATG to multiple possible buyers including some automakers, but talks with Aurora, which began in October, are far along.
Despite challenging objectives, ATG has struggled to create substantial progress toward a fully-autonomous vehicle that can safely and efficiently move goods and passengers, while losing money across the way — leading to speculation in recent months that Uber would seem to offload the fighting company unit.
According to TechCrunch, ATG was facing a potential” down around,” where shareholders were considering dropping the branch’s evaluation from its preceding $7.25 billion evaluation.
Uber started ATG five years ago, and in its short lifetime, the branch was plagued with multiple scandals and setbacks, bleeding money across the way — Uber reported $303 million in net losses for”ATG and other technologies” in its next quarter.
Workers advised Business Insider’s Julie Bort a deadly 2018 crash in Phoenix — the very first AV incident to kill a pedestrian — exposed defects in ATG’s technology as well as poor decision-making and infighting. (Uber was found not criminally accountable for the incident, while the individual backup driver was charged with negligent homicide).
The former head of Uber’s self-driving division, Anthony Levandowski, was likewise at the centre of a huge legal struggle involving Uber and Google’s self-driving group, currently called Waymo, over stolen technology. Uber fired Levandowski, who was sentenced to 18 months in prison for trade secret theft, in 2017 after he refused to testify in the situation.
Back in September, The Information reported an ATG manager sent an email to Uber CEO Dara Khosrowshahi warning him regarding shortcomings with the company’s self-driving efforts, stating ATG”has simply neglected to evolve and create meaningful progress in so long as something needs to be said prior to a disaster befalls us.”
The scandals, infighting, and lack of technological advancement have led investors to become impatient.
Mr reported in September two of Uber’s most important shareholders, SoftBank and Benchmark, have urged Khosrowshahi to rethink ATG’s plan and earn more external investment. ATG has obtained funds from Toyota and Denso in the past several years.
Amid the COVID-19 pandemic, Uber has sold off several of its less successful side projects, such as e-bike startup Jump, since it refocuses on its core businesses of ride-hailing and meals delivery.
Uber is not the only business to struggle in self-driving. The AV sector more widely has fallen far short of the optimistic expectations businesses and analysts created throughout the 2010s. No automaker currently appears near selling vehicles that can operate without human supervision, and just Waymo and Motional are providing rides to paying customers from self-driving vehicles, and even then, only in relatively tiny areas.
A wave of consolidation has also come for the business recently, exacerbated by fundraising challenges during the pandemic.
Aurora is well-positioned
Aurora, which was started in 2016 by leading members of Uber’s, Google’s, and Tesla’s autonomous-driving apps, is on an upward trajectory, however.
Many investors advised Business Insider’s Mark Matousek that Aurora has the most potential among self-driving startups due to the strong founding team, engineering, and fundraising ability (that the provider is backed by major tech, automotive, and financial players such as Amazon, Hyundai, and T. Rowe Price).
With just $765.6 million increased, however, Aurora is substantially smaller than ATG and would probably need to bring in outside investment or let Uber maintain some equity in order to acquire it.