Ride share corporation, Uber Technologies Inc., has recently decided to sell the research their innovation division, Advanced Technologies Group (ATG), has done on self-driving cars to tech start up, Aurora Innovation Inc. Uber hopes that by selling off their work, Aurora can progress more efficiently in getting this technology out to a global market. ATG’s mission is “to bring safe, reliable self-driving transportation to everyone, everywhere,” as stated on their website. Uber was the first to market for ride share and they seem to be close to becoming the first to market for driverless car services. Aurora released a statement saying that not only has Uber sold its billion-dollar research to them, but Uber has also chosen to invest $400 million into the startup as well to help fund their work.
Uber’s profits have steadily declined since it was founded with the rise of stiff competition nationwide in both their ride hailing services and their food delivery services. Some might think this is another way for them to attempt to break through the clutter of their market and become the customer’s first choice again. After Uber’s fatal accident back in 2018 with their first trial runs of their automated driving cars in Arizona, they are looking to reinforce the safety and potential good this technology can bring to customers across the globe. It seems to be on trend for Uber to research new forms of transportation and then sell off to a third-party company. Earlier this year Uber sold off their scooter and electric bike division to a competing micro mobility company, Lime.
Uber Chief Executive, Dara Khosrowshahi, is restructuring the company in hopes to make the company profitable as soon as possible by scaling back their side businesses, but will it come back to haunt them? With the pandemic not going away anytime soon, ride share usage is taking a massive hit as well as public transportation. According to data put out by Statista, the 2nd quarter of 2020 reported that the number of unique users who used either of Uber’s services was cut in half compared to the 1st quarter, resulting in a $104 million loss in the 3rd quarter says the Wall street Journal. People are becoming more and more aware of just how easy it is to spread germs, especially in bigger cities like New York where subways are crammed full of people during rush hours touching shoulders, and they are more warry of unnecessary close contact with strangers. It is predicted that scooter companies, such as Lime, will make a big turn around and become a preferred way of travel in big cities because of the singularity of usage. The rider will not have to interact with anyone and can easily wipe down the handles or wear gloves whereas busses, taxis, or trains are now viewed as potential super spreaders of, not just the corona virus, but the flu, and the common cold.
So, while Uber selling off their research departments might have helped them get through the financial drought brought on by Covid-19, it might hurt the company’s growth in the long run. Competition is stiff in the race to be the first to offer self-driving cars to the general public. Even though Uber has a 26% stake in Aurora will they come to regret selling off their ATG projects? Will they lose the chance to be known as the forefront of technological innovation?