Ride sharing firm Uber has sold off its flying taxi business Elevate to Joby Aviation, a California-based electric aircraft developer.
Under the deal, Joby Aviation will receive the Elevate flying taxi unit while Uber will will also invest an additional $75 million in the electric aircraft developer. The two companies describe the deal as an "expanded partnership".
Uber's chief executive officer (CEO) Dara Khosrowshahi said: "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."
Expanded partnership for Elevate
The flying taxi unit was established in 2016 and until earlier this year, the business was looking to launch flying taxi services in Los Angeles, Dallas and Melbourne in 2023.
Joby previously served as a partner in Elevate prior to its takeover of the business. The two firms said they would each integrate the other company's services into their own app.
Joby founder JoeBen Bevirt said: "These tools and new team members will be invaluable to us as we accelerate our plans for commercial launch." According to Joby, its "zero emissions" aircraft will have a capacity of four passengers and will be able to takeoff and land vertically.
The company added that the aircraft has a top speed of 321 kilometers per hour and a range of up to 241 kilometers. This aircraft is currently undergoing testing.
Sale of self-driving car business
The announcement of the sale of Elevate comes on the heels of Uber's decision to sell its self-driving car business Advanced Technologies Group to startup firm Aurora Technologies.
The ride hailing company will also invest $400 million in the Amazon-backed startup, granting it a 26% stake in the firm.
Aurora said the deal will allow it to "accelerate" its mission to make self-driving cars a reality. The sale is valued at around $4 billion, down from the $7.5 billion estimated worth of the business in 2019.
Despite the sale, Uber still expressed interest in the sector and said it plans to partner with Aurora in the future to launch driverless cars on its network.
Khosrowshahi said: "Few technologies hold as much promise to improve people's lives with safe, accessible, and environmentally friendly transportation as self-driving vehicles."
"For the last five years, our phenomenal team... has been at the forefront of this effort - and in joining forces with Aurora, they are now in pole position to deliver on that promise even faster," the Uber chief added.
The sale of the self-driving business is part of Khosrowshahi's strategy of refocusing Uber on taxi and food delivery services to make it profitable.
In May, Uber announced drastic plans to cut back on its businesses as its losses continue to grow due to the coronavirus pandemic.
In order to secure the company’s future, Uber said it will undertake drastic measures, including letting go an additional 3,000 workers as well as consolidating offices and shutting down business units.
