Perhaps the best-known ridesharing service, Uber has grown rapidly over the last decade. Since its founding in 2009, it has expanded into markets around the globe, and entered the world of food delivery and even helicopter transport.
One of the main headline research areas for the company was the development of autonomous cars, which would revolutionize the company’s business model by eliminating the need to pay human drivers. However, as of December, the company has announced that it it spinning off its driverless car division in a deal reportedly worth $4 billion, though that’s all on paper — Uber is trading its autonomous driving division, and a promise to invest a further $400 million, in return for a 26% share in the self-driving tech company Aurora Innovation.
PLAYING A LONG GAME
Uber’s driverless car research was handled by the internal Advanced Technologies Group, made up of 1,200 employees dedicated to working on the new technology. The push to eliminate human drivers from the ride-sharing business model was a major consideration for investors of Uber’s Initial Public Offering on the NYSE in 2019. The company is yet to post a profit, and reducing the amount of fares going to human drivers would make it much easier for the company to achieve that crucial goal.
However, Uber’s efforts have not been without incident. Tragically, in 2018, a development vehicle running in autonomous mode hit and killed a pedestrian in Tempe, Arizona. This marked the first pedestrian fatality caused by an autonomous car, and led to the suspension of on-road testing by the company. The incident revealed shortcomings in the company’s technology and processes, and was a black mark on the company moving forward.
The Advanced Technology Group (ATG) has been purchased by a Mountain View startup by the name of Aurora Innovation, Inc. The company counts several self-driving luminaries amongst its cofounders. Chris Urmson, now CEO, was a technical leader during his time at Google’s self-driving research group. Drew Bagnell worked on autonomous driving at Uber, and Sterling Anderson came to the startup from Tesla’s Autopilot program. The company was founded in 2017, and counts Hyundai and Amazon among its venture capital investors.
Aurora could also have links with Toyota, which also invested in ATG under Uber’s ownership in 2019. Unlike Uber, which solely focused on building viable robotaxis for use in limited geographical locations, the Aurora Driver, the core of the company’s technology, aims to be adaptable to everything from “passenger sedans to class-8 trucks”.
Getting rid of ATG certainly spells the end of Uber’s in-house autonomous driving effort, but it doesn’t mean they’re getting out of the game. Holding a stake in Aurora, Uber still stands to profit from early investment, and will retain access to the technology as it develops. At the same time, trading ATG off to an outside firm puts daylight between the rideshare company and any negative press from future testing incidents.
Even if Aurora only retains 75% of ATG’s 1,200 employees, it’s doubling in size, and will be worth keeping an eye on in the future.