Uber Technologies Inc (NYSE: UBER) is nearing a sale of its air taxi business segment, according to Axios. The discussions with California-based aerospace startup Joby Aviation have progressed to advanced levels and, if successful, could be officially announced sometime this month. In mid-October, Axios broke the news that Uber was seeking a buyer for its Elevate business.
What Happened: Uber Elevate is part of the company’s urban air mobility initiative and engages a network of electric aircraft with the ability to take off and land vertically. The eVTOL (electric vertical takeoff and landing) makes it easy to navigate and operate in dense urban areas.
Crunchbase shows that, since its inception in 2009, Joby has secured $721 million in funding to-date. In its Series C funding round in January, Joby raised $590 million from eight investors including Japanese automaker Toyota Motor Corporation (NYSE: TM).
Why Does It Matter: Axios reports that a partial sale of aerial ride-hailing services could recalibrate Uber’s profitability estimations to fall in sync with CEO Dara Khosrowshahi’s targets.
In May, after suffering a beatdown due to the lockdown restrictions, Uber announced layoffs in two separate phases barely a few weeks apart. According to Reuters, the company trimmed 23% of its workforce at the time.
In January, the ride-sharing company announced a tie-up with South Korean carmaker Hyundai Motor Company (OTC: HYMTF) for building a network of air taxis. While the carmaker agreed to build and deploy the aerial vehicles, Uber had plans to handle interfacing, air support, and customer support services.
Price Action: UBER shares rose 6.97% on Wednesday to end the day at $53.09.
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