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Uber is getting out of the self-driving car game

Uber said it needs to focus on making money.

uber self-driving car
Image: Uber

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Uber is selling its driverless car subsidiary, Advanced Technologies Group (ATG), to a startup called Aurora Technologies Inc. This move is a major strategic shift from what was once regarded as a top priority by their former CEO, Travis Kalanick.

Under the management of their new CEO Dara Khosrowshahi, the more pressing priority is to make Uber profitable. To that end, Mr. Khosrowshahi has disposed of many of Uber’s money-draining side businesses such as its flying cars, electric bikes, AI lab, product incubator, and others.

The deal with Aurora Technologies doesn’t mean that Uber is giving up on self-driving cars completely. As part of this deal, Uber will invest $400 million in cash in Aurora Technologies and will hand them over their ATG unit. In return, Uber’s CEO Dara Khosrowshahi will get a seat on their board, and Uber will take a 26% stake in Aurora stocks. 

The Aurora acquisition is seen as an admission by Uber that their self-driving car division is a failure. Over the years, Uber invested hundreds of millions of dollars in this part of their business. Plus it was faced with numerous setbacks such as a lawsuit from Waymo for stealing intellectual property and the death of a pedestrian in Arizona. 

Aurora’s CEO Chris Urmson announced that their first product will not be a robot taxi that could be beneficial to Uber’s taxi business, but a self-driving truck. Mr. Urmson believes that this is the right move because long-haul trucks don’t include passengers, and they are way more predictable on highways, unlike cars in cities that need to account for a wide range of factors.

According to Chris Urmson, the following 60 days will be all about bringing the two teams together – the ATG and the Aurora team. They want to use the combined knowledge to push forward the development of their first product to market. Urmson also said that it does not matter where the best ideas and suggestions will come from as long as it accelerates their time to market.

Aurora is led by some of the pioneers in the world of driverless cars. Urmson himself was once part of Google’s self-driving car development unit before jumping ships and co-founding Aurora Technologies. With the acquisition of ATG, Urmson will be reunited with Anthony Levandowski, a former engineer that worked with him on Google’s self-driving car project. Anthony Levandowski’s startup Otto was purchased by Uber in 2016 for $680 million. Aside from Uber’s investment, Aurora technologies previously received notable investments from Amazon and Hyundai.

What do you think? Was this a smart move from Uber? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.

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