Date
13 November 2018
One of Uber's self-driving cars, a Volvo, is being tested in the streets of Tempe in Arizona in this file photo taken in 2017. Photo: Reuters
One of Uber's self-driving cars, a Volvo, is being tested in the streets of Tempe in Arizona in this file photo taken in 2017. Photo: Reuters

Uber eyes stake sale in self-driving car unit before IPO: report

Uber Technologies is considering selling minority stakes in its self-driving car unit, the Financial Times reported, in a move widely seen as an attempt to drive down the firm’s cost pressures ahead of an initial public offering (IPO) next year.

Uber has received interest from potential investors and could spin off the unit, called Advanced Technologies Group, into a separate business entity, the newspaper said, citing sources.

According to the plan, Uber will retain operational control as well as the majority ownership of the unit after the sale, with external partners sharing in the cost of developing and commercializing the self-driving technology.

The nine-year-old Uber is facing intensifying competition in its core ride-hailing business. It has been expanding its portfolio and seeking revenue growth in its various businesses, including food delivery and dockless bike- and scooter-sharing services.

The company has suspended the testing of its self-driving car after a fatal accident in March in Tempe, Arizona, in which one of its Volvo SUVs equipped with autonomous sensors failed to detect a pedestrian and hit and killed the person. Soon after the accident, the company removed its robot cars from the road, laid off test drivers and shuttered operations in Arizona, its autonomous testing hub.

According to a Wall Street Journal report, Uber’s long-anticipated IPO plan could be finally realized next year, with a valuation of as much as US$120 billion.

The proposed valuation, sketched out by Morgan Stanley and Goldman Sachs, is about US$50 billion more than the company’s most recent valuation. And that figure is higher than the combined valuations of the “Big Three” auto companies in the United States, namely Ford, General Motors and Fiat Chrysler.

Uber’s major rival Lyft is also reportedly eyeing an IPO next year. CNBC reported that the company has selected J.P. Morgan to lead the IPO plan, which is expected to raise more than US$15 billion in the public markets.

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