Uber is selling its autonomous vehicle business to Aurora Innovations, a San Francisco-based startup founded by the former head engineer of Google’s self-driving car project, the two companies announced Monday.
As part of the deal, Aurora’s self-driving cars will eventually operate on Uber’s ride-hailing platform. Uber will invest $400 million in Aurora and Uber CEO Dara Khosrowshahi will join the startup’s board of directors.
It’s unclear whether the acquisition will result in any layoffs. “Aurora has committed to making offers to the majority of ATG employees,” an Uber spokesperson said. “We are working through the details with Aurora and will notify our teams in the coming weeks.”
The deal marks the end of Uber’s ambitious dream of replacing it’s fleet of human-powered taxis with robot drivers. The ride-hailing company believed that by pouring millions of dollars into developing its own technology, it could eliminate its main cost factor — drivers — and take over the world of transportation with cheap, plentiful autonomous vehicles.
Instead, Uber faced one disaster of its own making after another. The company was sued by Waymo for allegedly stealing the Google offshoot’s trade secrets. The companies eventually settled, but Uber’s former star engineer (and ex-Googler) Anthony Levandowski was recently sentenced to 18 months in jail for the crime.
More troubling than that, though, was the death of Elaine Herzberg in March 2018. The 49-year-old woman was struck and killed by a self-driving Uber vehicle while walking her bike across the street in Tempe, Arizona. It was likely the first known fatality by an autonomous vehicle.
After a lengthy investigation, the National Transportation Safety Board split the blame between Uber, the safety driver, the victim, and the state of Arizona in a blistering official report that also took the federal government to task for failing to properly regulate the industry. The company was cleared of any criminal wrongdoing by local authorities. Uber settled a lawsuit with Herzberg’s family for an undisclosed sum. Police later filed criminal charges against Uber’s safety driver, claiming she wasn’t watching the road but was instead streaming The Voice on her phone at the time of the crash.
After the crash, Uber resumed testing its self-driving cars but in a much diminished capacity. The company’s Volvo SUVs were only allowed to operate in a closed loop in downtown Pittsburgh, where the Advanced Technologies Group is headquartered. The company recently unveiled its third-generation vehicle, with plans to begin testing in Washington, DC, and its hometown of San Francisco.
But the coronavirus pandemic has pulled the rug out from under Uber, which has never had a profitable quarter in its existence. With the evaporation of demand of its ride-hailing business, Khosrowshahi has been pushing to sell off the money-losing parts of the business in his pursuit of profitability. Most recently, Uber reportedly sold its air taxi division to a California-based startup called Joby Aviation.
Aurora is an interesting choice for a buyer. The startup was founded in 2016 by former lead engineer for Google’s self-driving project Chris Urmson. His co-founders are Sterling Anderson, who helped lead Tesla’s Model X project, and Drew Bagnell, who ran a research lab at Carnegie Mellon then left to work on autonomous vehicles at Uber. The company is pursuing autonomous semi trucks (which Uber was also working on but eventually abandoned) as well as self-driving taxis.
To date, Aurora has raised $690 million in funding, and Urmson has been hailed as the “Henry Ford of autonomous vehicles,” thanks to his work helping to pioneer Google’s self-driving car initiative. Fiat Chrysler, Hyundai, and EV startup Byton are also Aurora customers. The company raised half a billion dollars last year in a funding round led by Amazon.