Uber in talks to raise capital for major robotaxi expansion

USA Today

5 hours ago

Uber UBER.N is in talks with private equity firms and banks to secure funds to build its robotaxi business, CEO Dara Khosrowshahi said, as the ride-hailing giant bets on a mass roll-out of the nascent and much-scrutinized technology.
Uber, which offers robotaxis from Alphabet GOOGL.O-owned Waymo, has been strengthening its foothold in the self-driving taxi industry through partnerships with automakers such as Volkswagen VOWG.DE and Lucid LCID.O, just as Tesla TSLA.O seeks to expand its fledgling robotaxi business.
Khosrowshahi on Wednesday pitched the tie-ups as part of a larger plan that involves three robotaxi business models: paying partners that own such vehicles a fixed rate, sharing revenue with fleet operators and owning vehicles while licensing software for self-driving technology.
"We are talking to private equity players, we have talked to banks," the CEO said. "Once we prove the revenue model, how much these cars can generate on a per day basis, there will be plenty of financing to go around."
For now, Uber said it was planning on using a "modest" portion of its around $7 billion in annual cash flows to fund deployments. It might also sell minority stakes in companies to aid the expansion, it said.
Analysts have said that mass robotaxi deployment could lower driver-reliant Uber's operating costs and boost profitability.
The company has been offering Waymo robotaxis on its ride-hailing app in Austin, Texas and Atlanta, Georgia. In April, Uber entered a deal with Volkswagen for thousands of autonomous electric vans in the United States over the next decade.
It also struck a $300 million partnership in July that will allow it to deploy more than 20,000 autonomous taxis, made by EV startup Lucid and powered by self-driving tech from Nuro, over six years.
Despite strong regulatory scrutiny, doubts about wider adoption, and high costs forcing many firms to shut down, Tesla and Waymo have been pushing to expand robotaxi services, a business Elon Musk has said could be worth trillions of dollars.
Waymo is present in five U.S. cities, including San Francisco, while Tesla launched a limited robotaxi service in Austin in June and started ride-hailing operations in the Bay Area last month.
Uber said it has not yet seen any changes in demand trends in Austin or San Francisco since Tesla's services were launched in the cities.
"To a lot of these companies, it does seem this will be a worthwhile endeavor ... as there are lofty predictions about the robotaxi industry's total addressable market," said Ken Mahoney, CEO of Mahoney Asset Management.
Reporting by Akash Sriram in Bengaluru; Editing by Aditya Soni, Shinjini Ganguli and Lincoln Feast.