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Uber sells self-driving unit to startup competitor

Uber sells self-driving unit to startup competitor

Uber on Monday announced it is selling its self-driving unit to an autonomous vehicles startup and investing $400 million in the company.

Aurora, which is acquiring Uber's Advanced Technologies Group (ATG), said it's planning to first focus on trucking, rather than a self-driving taxi in line with Uber’s ride-hailing service. But the company added it is in a “unique position” to be a leading player in passenger mobility based on the deal with Uber.

“By adding the people and technology of Uber’s Advanced Technologies Group to the incredible group we’ve already assembled at Aurora, we’re shifting the landscape of the automated vehicle space,” Chris Urmson, co-founder and CEO of Aurora, said in a statement. “With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver.”

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Uber CEO Dara Khosrowshahi said in a statement he is looking forward to bringing Aurora’s products to the Uber network “in the years ahead.”

Khosrowshahi will also join Aurora’s board of directors.

The companies did not disclose the financial components of the deal, which was valued at $4 billion, according to people familiar with the matter cited by Reuters.

Aurora, a California-based startup, was founded in 2017. It’s tested vehicles in the San Francisco Bay Area, Pittsburgh and Dallas.

Tech Crunch reported last month that Uber was in talks to sell its self-driving unit to Aurora. 

Uber launched the self-driving car initiative in 2015 with Carnegie Mellon University. The company’s autonomous vehicle initiative was dealt a series of setbacks in the ensuing years.

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Anthony Levandowski, a former Google engineer who went on to work for Uber’s self-driving car initiative, was charged last year with stealing trade secrets. Levandowski worked as the lead of Google’s Light Detecting and Ranging engineering team from 2009 to 2016 and was part of the tech giant’s push to develop self-driving car technology.

He was later hired to lead Uber’s self-driving car efforts. Uber fired him in 2016 after charges were brought against him. In August he was sentenced to 18 months in prison. 

In 2018, Uber suspended its self-driving car testing after one of its cars struck and killed a pedestrian in Arizona. The autonomous vehicles were back on the road in Pittsburgh less than a year after, but reportedly in a scaled-down format.

The announcement of the sale comes as Uber has faced financial strain amid the coronavirus pandemic. The company said in August that its second-quarter revenue dropped 29 percent compared to the same period a year earlier.

Uber has recently expanded to strengthen other revenue streams. The company completed its $2.65 billion acquisition of delivery platform Postmates earlier this month, adding to Uber’s food delivery services.