Uber Divests Self-Driving Unit to Aurora in $4 Billion Deal Amid Profitability Drive

Uber Technologies Inc. announced in December 2020 the sale of its Advanced Technologies Group (ATG), its self-driving vehicle division, to autonomous vehicle startup Aurora Innovation. The transaction, which valued ATG at approximately $4 billion, saw Uber invest an additional $400 million into Aurora and secure a 26% stake in the combined entity, with Uber CEO Dara Khosrowshahi joining Aurora's board of directors. This strategic divestment was a significant step in Uber's push towards achieving consistent profitability.

The decision to offload ATG came after years of substantial financial investment in autonomous vehicle development, a sector that had yet to deliver commercial returns and was incurring hundreds of millions in losses quarterly. Khosrowshahi had previously indicated his intent to seek partnerships or divest ATG as part of a broader strategy to enhance Uber's financial performance. "Few technologies hold as much promise to improve people’s lives as autonomous mobility," Khosrowshahi stated at the time, adding, "But the challenge of commercializing this technology is also incredibly difficult and complex. By joining forces with Aurora, we’re making an important step forward in Uber’s journey to profitability."

This move by Khosrowshahi contrasts with opinions such as that expressed by social media user Jesse Tinsley, who recently tweeted, "> Firing Travis Kalanick will go down as one of the worst board decisions of all time. Sure the IPO went well… but the decision by Dara to gut their autonomy (AI division) is unforgivable." However, Uber's initial public offering (IPO) in May 2019, while highly anticipated, was met with an underwhelming market reception. Shares were priced at $45 but closed at $41.57 on the first day of trading, below the IPO price.

Travis Kalanick, Uber's co-founder and former CEO, was compelled to resign in June 2017 following intense pressure from investors. His departure stemmed from numerous controversies, including allegations of a toxic workplace culture, mishandling of sexual harassment claims, and aggressive business tactics. Khosrowshahi assumed leadership with a mandate to stabilize the company and guide it toward financial viability, making the ATG divestment a key component of this revised corporate strategy.