Uber is selling its self-driving unit to autonomous vehicle startup Aurora

Dara Khosrowshahi is also joining the startup's board of directors.

As expected, Uber is selling off its self-driving unit. On Monday, the company confirmed the sale of its Advanced Technologies Group (ATG) to Aurora Innovation, one of its now previous competitors in the autonomous vehicle space. As part of the deal, Uber will invest $400 million in Aurora, with CEO Dara Khosrowshahi joining the startup’s board of directors. Effectively, Uber is paying Aurora to take the division off its hands. In the near term, the startup will put ATG’s expertise to use on a self-driving truck it’s working on. Robot taxis will come later, with Uber licensing the tech from Aurora.

“With the addition of ATG, Aurora will have an incredibly strong team and technology, a clear path to several markets, and the resources to deliver,” Chris Urmson, the CEO of Aurora, said. “Simply put, Aurora will be the company best positioned to deliver the self-driving products necessary to make transportation and logistics safer, more accessible, and less expensive.”

There could be more belt-tightening in Uber’s future as it attempts to find a path to profitability. At the start of December, it came out that the company was also in advanced talks to sell its flying taxi division to Joby Aviation. The sale could be confirmed within the next few weeks.

It’s not surprising Uber eventually came to the decision to stop working on autonomous vehicles. The company’s self-driving efforts have been marred by setbacks and controversy. In 2018, one of Uber’s test vehicles struck and killed a pedestrian in Arizona. More recently, a federal judge sentenced Anthony Levandowski, the company’s former self-driving lead, to 18 months in prison for stealing trade secrets from his former employer, Waymo. But in a way, none of those may have played as significant of a factor in Uber’s decision as the recent passing of Proposition 22 in California. The side ballot successfully overturned the state’s AB5 law, which had classified gig economy workers as employees. Uber’s victory in California could have ramifications in other states as it seeks ways to lower its labor costs.