Uber, the ride-hailing company, is reportedly mulling bringing on a minority investor to help it bankroll its self-driving unit.
Financial Times, citing two people familiar with the matter, reported that Uber has already received expressions of interest from would-be investors, and may opt to spin off its Advanced Technologies Group into a standalone unit with its own valuation. According to the publication, Uber would keep operational control and would be the majority owner in the spinoff, while partners would share in the cost of developing and commercializing the self-driving technology. The move, noted FT, could be part of its preparation to go public via an initial public offering (IPO). Uber is expected to tap the public markets in 2019.
According to the report, the spin-off would assuage some investors who had called on the company to get out of the unit altogether. The calls to exit have been rising in light of a crash with an Uber self-driving vehicle that resulted in a fatality earlier this year.
Uber declined to comment about the potential to divest the business, but a spokesman told FT that “shared self-driving cars will ultimately make transportation safer, more efficient and more affordable for riders on the Uber network. Our team at the Advanced Technologies Group is wholly focused on building the safest self-driving technology out there, and we remain committed to supporting their efforts to make this self-driving future a reality.”
It’s not a stretch for Uber to seek partners to share the costs of its self-driving ambitions. It is facing competition from deep-pocketed rivals that include Alphabet’s Waymo and General Motors Cruise Automation. With all of the industry players in the market, it can be difficult and costly to hire the right engineers – not to mention to shoulder the costs associated with getting all the equipment to make autonomous driving a reality.
FT noted that in the past, Dara Khosrowshahi, Uber’s chief executive, has dismissed calls to sell the self-driving car unit entirely. “It’s not something we’re thinking about at this point,” he told Reuters in a September interview.