In a major deal that reshapes the electric vertical takeoff and landing urban air mobility segment, ride-sharing giant Uber Technologies has sold its loss-making flying taxi division, Elevate, to a Santa Cruz, Californian startup as it abandons costly side projects in an attempt to turn a profit, The Guardian reported.
The sale to Joby Aviation comes a day after Uber ditched ambitions to develop its own self-driving car and sold its autonomous vehicle division, Advanced Technologies Group (ATG), to the startup Aurora Innovation for US$4 billion.
Uber and Joby described the Elevate sale as an “expanded partnership.” It will result in Uber investing an additional US$75 million in Joby, The Guardian reported.
Dara Khosrowshahi, Uber’s chief executive, said: “Advanced air mobility has the potential to be exponentially positive for the environment and future generations. 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.”
Uber began experimenting with flying taxis in 2016, and Elevate had promised to launch the services in Los Angeles, Dallas and Melbourne in 2023, The Guardian reported.
Joby, which was valued at US$2.6 billion earlier this year, said its “zero emissions” aircraft would be able to carry four passengers and a pilot.
Uber promised investors it would turn profitable on the basis of adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) by the end of 2021. In the last quarter it reported a US$625 million adjusted Ebitda loss.
Uber and Uber Elevate have been the principal cheerleaders for the emergence of eVTOLs as airborne taxis, AOPA reported.
By late 2019 it had selected eight eVTOL designs as candidates for participation in its airborne analog to its auto-based ride-sharing service.
Uber has said that it was working with its partners to come up with pilot certification, airframe standards, and airspace regulations together with the FAA and the European Union Aviation Safety Agency, AOPA reported.
Meanwhile, Joby had already raised about US$700 million from firms such as Toyota, Intel, and JetBlue.
Uber’s latest investment brings the total Joby has raised to US$820 million, with a total of US$125 million of that coming from Uber, AOPA reported.
Joby has designed the S4, an eVTOL it says can fly a pilot and four passengers as far as 150 miles (241 km), and as fast as 200 mph (321 km/h). It was one of the partners selected by Uber Elevate.
Joby expects it will be certified by 2022 and will enter into service in 2023. In 2019, Joby said it was looking to fill 1,600 jobs for the S4 project.