Report: Uber has been urged by investors to sell off its self-driving car unit, which has lost $125M-$200M per quarter over the last 18 months
Context & Ripple Effects
The investor pressure Reuters reports is the second time Uber has been forced to confront an unprofitable side business: in 2017 it moved to close or sell most of its US car-leasing division just two years after launching it, citing unsustainably high losses (car-leasing wind-down). The self-driving unit's burn of $125M-$200M per quarter over 18 months makes ATG the largest remaining money pit ahead of a planned IPO.
Two months later, Uber was still searching for a middle path, weighing minority stake investments to help finance the unit rather than sell it outright (minORITY-stake financing option) — and the eventual resolution came only in late 2020, when talks began to sell Advanced Technologies Group to Aurora Innovation (ATG sale talks with Aurora).
First-order effects
- Uber's pre-IPO valuation case takes a direct hit: a unit burning up to $200M per quarter is a line item public-market investors will discount, strengthening the argument for divestiture over continued funding.
- ATG employees and leadership face immediate uncertainty over whether the unit continues inside Uber, gets spun out with outside financing, or is sold.
Second-order effects
- Ride-hailing rivals with their own autonomy programs face a repricing moment: if Uber sheds ATG, the market for acquiring or investing in self-driving teams widens, and any buyer gains Uber's accumulated work at a distressed-asset price.
- The pressure pushes Uber toward monetizing other holdings to plug the hole — a playbook it later followed by seeking to sell part of its $6.3B Didi Chuxing stake to boost its own stock.
Third-order effects
- If the pattern holds, Uber structurally reverts to an asset-light platform: capital-intensive bets (leasing, autonomous vehicles) get closed or sold while core marketplace economics carry the equity story.
- Autonomy development consolidates out of ride-hailing operators and into dedicated companies like Aurora, separating who builds driverless tech from who operates vehicle networks.
The trend: Uber is being pushed by investors to shed capital-intensive moonshots and refocus on its core marketplace ahead of going public, with self-driving as the costliest candidate for the chopping block.