Uber sells loss-making flying taxi division to Joby Aviation
Uber has sold its loss-making flying taxi division, Elevate, to a Californian startup as it abandons costly side projects in an attempt to turn a profit next year.
The sale to Joby Aviation, announced late on Tuesday, comes a day after Uber ditched ambitions to develop its own self-driving car and sold its autonomous vehicle division, Advanced Technologies Group (ATG), to the startup Aurora Innovation for $4bn (£3bn).
Uber and Joby described the Elevate sale as an “expanded partnership”. It will result in Uber investing an additional $75m (£56m) in Joby.
Dara Khosrowshahi, Uber’s chief executive, said: “Advanced air mobility has the potential to be exponentially positive for the environment and future generations. This deal allows us to deepen our partnership with Joby, the clear leader in this field, to accelerate the path to market for these technologies.”
Uber began experimenting with flying taxis in 2016, and Elevate had promised to launch the services in Los Angeles, Dallas and Melbourne in 2023.
Joby, which was valued at $2.6bn earlier this year, said its “zero emissions” aircraft would be able to carry four passengers and a pilot. The company said the aircraft, which is undergoing tests, would have a range of up to 241km (150 miles) and a top speed of 321km/h.
Uber promised investors it would turn profitable on the basis of adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) by the end of 2021. In the last quarter it reported a $625m adjusted Ebitda loss.
Khosrowshahi said the company would focus on its core ride-hailing and food-delivery platforms to achieve profitability. Cost-cutting measures include large rounds of redundancies.
Developing autonomous technology has been Uber’s big ambition since its then chief executive, Travis Kalanick, launched the driverless car division in Pittsburgh in 2015.
At the time, Uber was ahead of rivals such as Google and Tesla in the race to develop “robotaxis”. But it had a serious setback when an autonomous Uber car killed a woman who was crossing a street in Arizona in 2018, and it was also caught up in legal battles as Google’s self-driving car project, Waymo, sued Uber for alleged technology theft.