Uber sells flying taxi business to Joby Aviation

The transaction is expected to close in the first quarter of 2021, subject to regulatory review and customary closing conditions. 

Uber is selling off its flying taxi business, Elevate, as part of a new partnership with transportation company Joby Aviation.

Model of Uber Air taxi (Photo courtesy of Uber)

According to a press release Tuesday, the move will allow Joby and Uber to use each other's technology in their own services for "seamless integration between ground and air travel for future customers."

“Advanced air mobility has the potential to be exponentially positive for the environment and future generations," Uber CEO Dara Khosrowshahi said in a statement. "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. We’re excited for their transformational mobility solution to become available to the millions of customers who rely on our platform.”

Joby Aviation founder and CEO JoeBen Bevirt noted that the partnership will help accelerate plans for a commercial launch of Joby's all-electric, vertical take-off and landing passenger aircraft, which is expected to begin operating as early as 2023. The taxi service will transport four passengers and a pilot up to 150 miles on a single charge, with a top speed of 200 miles per hour.

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While the financial terms of the acquisition were not released, Uber will invest an additional $75 million in Joby, bringing its all-time total investment in the company to $125 million.

The ridehailing company made a previously undisclosed $50 million investment during Joby's Series C financing round in January 2020. Joby Aviation’s total funding, including previous rounds, is now $820 million.

The transaction is expected to close in the first quarter of 2021, subject to regulatory review and customary closing conditions.

The move comes a day after Uber sold off its self-driving unit, Advanced Technologies Group, to startup Aurora, which will use ATG's resources to develop autonomous trucking and other self-driving products. Uber will also invest $400 million in Aurora and Khosrowshahi will join the company's board of directors.

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Uber has made a promise to investors that it would achieve profitability on a basis of adjusted earnings before interest, taxes, depreciation and amortization by the end of 2021.

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In its third quarter, Uber posted an adjusted loss of $625 million compared to a loss of $585 million in the same period a year ago. Elevate, ATG, and Uber's other technology programs accounted for approximately $104 million of that loss, which narrowed slightly compared to its loss of $124 million during the same period last year.

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