Like a homeowner selling off used furniture and camping gear at the subdivision-wide garage sale, Uber is parting with another expendable piece of its mobility tech empire: Uber Elevate.
Joby Aviation of Santa Cruz, California announced that it is purchasing Uber’s flying car unit, Uber Elevate. The amount spent by Joby was not released, although it was revealed the deal calls for Uber to invest $75 million in Joby. This brings Uber’s total investment in Joby to $125 million after a previously undisclosed $50 million investment in Joby back in January as part of Joby’s Series C financing round.
The announcement follows the ride-hailing company’s move detailed earlier this week that it was selling off its autonomous vehicle unit to Aurora, self-driving technology company, for an estimated $400 million.
The deal also calls for Joby and Uber to integrate their respective services into each other’s apps, which will enable the “seamless integration between ground and air travel for future customers,” the announcement posted Joby’s web site said.
Joby is developing what is described as an all-electric, vertical take-off and landing passenger aircraft, that will be operational by 2023.
“We were proud to partner with Uber Elevate las year and we’re even produce to be welcoming them into the Joby team today, while deepening our cooperation with Uber,” said JoeBen Bevirt, founder and CEO, Joby Aviation in a released statement.
“The team at Uber Elevate has not only played an important role in our industry, they also have developed a remarkable set of software tools that build on more than a decade of experience enabling on-demand mobility.”
The move to sell off two major chunks of its business in such a short period of time, does raise some eyebrows. The company been losing money for a long period of time, but the pandemic is making it difficult to recover. Travel as well as daily transportation businesses are seeing big hits, especially Uber.
It’s third quarter gross bookings were down 10% compared with the year-ago period to $14.7 billion. This resulted in a loss of $1.1 billion, or 62 cents a share. This is actually a slight improvement from $1.2 billion during the same quarter last year.
However, CEO Dara Khosrowshahi told media and investors during a call last month the company is targeting profitability in 2021. By selling off these two business units but taking an ownership stake in the companies buying them is essentially a bet on the keeping the company’s finger in the pie while not having to scoop out the money needed to run them day to day will net a profit.
The push toward profitability hasn’t slowed Uber’s desire to take ownership in companies it sees as valuable. It just completed the acquisition of Postmates, which is complementary to its Uber East business. It’s also in the midst of an offer of $1 billion in convertible senior notes that will mature in 2025. That deal is expected to close Dec. 11.
The notes, which carry a 0% interest rate, will net the company nearly $900 million that it will use for “working capital and other general corporate purposes, which may include acquisitions or strategic transactions, although Uber has not designated any specific uses at this time.”
Michael Strong contributed to this article.