Uber is selling its self-driving car business to startup firm Aurora Technologies, abandoning the subsidiary once considered the future of the company.
Ride hailing firm Uber will sell its self-driving car business to Aurora, which was established in 2017, but will still 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.
Uber's past challenges with self-driving cars
In March 2018, Uber was testing a Volvo XC90 for its self-driving technology when the car crashed and killed a pedestrian in Tempe, Arizona.
Last September, investigators found that Rafaela Vasquez, the self-driving car’s safety driver, had been streaming an episode of the television show The Voice, when the vehicle hit 49-year-old Elaine Herzberg as she wheeled a bicycle across the road.
Vasquez was charged with negligent homicide.
In a 2019 report, the US National Transportation Safety Board (NSTB) said it discovered that the self-driving Uber car failed to properly identify the victim as a pedestrian.
According to the NSTB, the vehicle failed to correctly identify the bicycle as an imminent collision until just before the crash but by that time, it was too late for it to avoid the accident. NSTB said: "The system design did not include a consideration for jaywalking pedestrians."
Uber was only able to secure a permit to test self-driving cars on public roads in California again in February. Prior to the crash, Uber was testing its self-driving cars in Phoenix, Pittsburgh, San Francisco and Toronto.
During that time, the company said: "We do not have an update as to exactly when we’ll resume autonomous testing.” It added: "Receiving our testing permit through the California Department of Motor Vehicles is a critical step towards that end in Uber’s home city."
Aside from the accident, the subsidiary was also at the center of a legal battle wherein Anthony Levandowski, a former executive at Uber who oversaw its self-driving vehicle program, pleaded guilty to trade secret theft.
Levandowski pleaded guilty to stealing an internal tracking document from Google related to its self-driving car program and was sentenced to spend 18 months in prison.
New Aurora deal
Under the deal to sell its driverless car subsidiary known as Advanced Technologies Group, Uber chief executive officer (CEO) Dara Khosrowshahi will also serve on Aurora's board.
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.
