Self-driving vehicle technology company Aurora will acquire
the employees and technology behind Uber's Advanced Technologies Group in an
stock transaction, the companies said Monday.
Uber will also invest $400 million into Aurora, and Uber's
CEO Dara Khosrowshahi will join Aurora's board of directors.
After the transaction, Aurora will be worth $10 billion and
Uber will hold 26 percent stake in the company, Aurora CEO Chris Urmson said in
an interview.
“Our first product will be in trucking and freight, but we
look forward to taking this great team that we have and accelerating that while
continuing working on light vehicles and ride-haling, and we'll ultimately see
our vehicles deploying on the Uber network,” Urmson said.
Uber will not have exclusive rights as a ride-hailing
company to Aurora's technology, but the two companies will have a “preferred
relationship,” Urmson said.
San Francisco-based Uber will lose a critical piece of its
company after the pandemic cut into its finances by suppressing demand for
shared rides. Its path to profitability has often been linked with its plans to
deploy autonomous vehicles and reduce the high cost of paying drivers.
The company's efforts around self-driving technology was
marred in March 2018 when one of its automated test vehicles hit and killed a
woman, the first death involving the technology. The backup Uber driver
involved in the crash was charged with negligent homicide for being distracted
in the moments before fatally striking the woman in suburban Phoenix.
“There's no doubt they had a pretty rough couple of years a
while back,” Urmson said. “What's been impressive to me in meeting the team
over the last little while is just how much the team has learned, and the
tenaciousness, and determination of the team as they come to market in a
thoughtful, safe way.”
Gaining customers' trust is a huge factor, said Dan Morgan,
vice president of Synovus Trust Company. “You have one or two bad accidents and
people are like, ‘I'm not getting into that thing,'" he said.
Aurora, based in Mountain View, California, is led by former
Google, Tesla and Uber executives. Aurora also has partnerships with delivery
giant Amazon and auto companies Hyundai and Kia, among others, but its
partnership with Uber is its first official relationship with a ride-hailing
company.
The move will help Uber find a quicker path to
profitability, said Steven Fox, founder and CEO of Fox Advisors. “It
accomplishes the best of both worlds for them. It takes away a big profit drag
and keeps them strategically well-positioned for when they want to move parts
of their network to be autonomous,” he said.
The deal means San Francisco-based Uber will be entrusting a
key piece of its future to a 3-year-old startup co-founded and run by one of
the engineers who launched Google's pioneering work in self-driving cars more
than a decade ago. Urmson was one of the most visible people involved in the
once-secret project that Google initially dubbed “Chauffeur” before it was
finally spun off into a separate company called Waymo. Google and Waymo remain closely
aligned under the same corporate parent, Alphabet.
While at Google, Urmson also worked on the self-driving car
technology with another top engineer, Anthony Levandowski, who defected to Uber
in 2016 oversee its early efforts to build robotic vehicles.
As part of that effort, Uber bought Levandowski's startup,
Otto, for $680 million. That deal quickly disintegrated into a scandal after
Waymo accused Levandowski of stealing its trade secrets and using them to help
Uber to make the transition from human drivers to autonomous vehicles.
Uber denied the allegations, but eventually reached a $245
million settlement with Waymo in 2018 after a few days of testimony during a
high-profile trial in San Francisco. Before the settlement, Uber's former CEO
and co-founder Travis Kalanick revealed he believed Google's self-driving car
technology posed an existential threat to Uber during his dramatic appearance
on the witness stand.
That fear drove Kalanick Uber's to open its own self-driving
car division stocked with robotic experts from Carnegie-Mellon University as
well as former Google engineers acquired as part of the deal with Levandowski.
Uber eventually fired Levandowski in 2017 and Levandowski wound up being
sentenced to 18 months in prison earlier this year after pleading guilty to
stealing some of Google's trade secrets before he left the company in 2016.