Uber is offering its driverless car division to the start-up Aurora Technologies, leaving the unit that Uber’s founder once praised as essential to the company’s future.
Aurora, founded in 2017, said the deal would help it “accelerate” its quest to make self-driving cars a reality.
Uber will invest $400 million in the Amazon-backed firm, with a share of 26 percent.
Its Chief Executive Officer, Dara Khosrowshahi, will also serve on the Aurora Board after the agreement has been concluded.
Despite the sale of its driverless car affiliate, known as the Advanced Technologies Company, Uber said that it remained involved in the market, with plans to partner with Aurora when it comes to deploying driverless cars on its platform.
“Few innovations hold as much potential to improve the lives of people with secure, affordable, and environmentally sustainable transportation as personality vehicles,” Mr. Khosrowshahi said.
“For the last five years, our incredible team has been at the forefront of this effort – and in teaming up with Aurora, they are now in second place to deliver on that promise even faster.”
Developing driverless technology was a key focus when Uber’s founder and former Chief Executive Officer, Travis Kalanick, led the ride praising business, seeing it as a way to minimize costs.
But the project hit problems when one of its cars was involved in a fatal crash in Arizona, while officials criticized human negligence for the accident and refused to file criminal charges against the company.
The Driverless Car Unit was also embroiled in court battles over charges of patent theft.
Mr. Khosrowshahi, who ousted Mr. Kalanick as Uber’s boss in 2017, has re-focused the business on taxi and food services as it aims to make Uber profitable.
The Aurora deal values Uber’s Advanced Technology Division at approximately $4 billion, down from $7.5 billion last year according to Reuters. It is planned to be finished by the first three months of 2021, Uber said.