Uber in talks with banks, private equity firms to fund robotaxi expansion
(Reuters) -Uber 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.
The company has been offering robotaxis from Alphabet-owned Waymo on its ride-hailing app in Austin and Atlanta. It also struck a $300 million partnership in July that will allow it to deploy more than 20,000 vehicles, made by electric-vehicle firm Lucid and powered by self-driving tech from Nuro, over six years.
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.
Despite strong regulatory scrutiny and doubts about wider adoption, several companies including Tesla and U.S. market leader Waymo have been rushing to roll out robotaxis, 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 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 robotaxi service was 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 and Shinjini Ganguli)
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