Talks about a possible investment into Uber Technologies’s self-driving vehicle unit, worth about $1 billion or even more, is being currently held between a group of investors that is led by SoftBank Group and the Japanese car maker Toyota Motor, according to media reports quoting people with knowledge of the matter.
Currently the self driving project of the ride hailing giant Uber is under pressure because the project is an expensive one – costing the money loosing start-up unicorn hundreds of millions of dollars without generating revenue and if the investment talks go through, it would lead to a much needed injection of cash for the program of the Uber.
Such an investment would also surely enhance the market value of Uber and underscore its potential of being not only a ride hailing company but also as a tech and car company as the US based firm is now preparing to launch its initial public offering which, according to experts, would value the set a market value of more than a $100 billion for the company. .
The media reports did not carry any comments from neither Uber nor SoftBank. According to a press statement from a Toyota spokesman, the automaker “constantly reviews and considers various options for investment” but does not have anything to announce.
The first report of the negotiations between the parties was published by The Wall Street Journal. According to its report, the negotiations could result in a decision to invest in Uber by next month. Following the release of the news of the talks, shares of SoftBank Group increased by 4 per cent in morning trading in Tokyo trade while there was no increase or decrease in Toyota’s stock.
Last year, an investment of $500 million was made by Toyota, Japan’s largest automaker into Uber for the purpose of helping in development of self-driving technology. Industry experts believe that both Toyota and Uber are lagging behind in the development of self driving cars to rivals such as Alphabet’s self-driving unit Waymo.
While Uber has been making substantive losses in recent years, including a $3.3 billion loss it reported, last year, it is also pinning its future prospects on development of self driving cars so that it would not have to pay drivers and thereby save money.
However the self driving car project of Uber came under close scrutiny of regulators and authorities in the United States after one of its self-driving cars struck and killed a pedestrian in Arizona last year and for which the company had to suspend its project for about a year. However, US prosecutors declined to pursue criminal charges last week in regards to that case.
The auto industry is seeing some very unlikely alliance in the challenge of developing the self driving technology. For example, Japan’s SoftBank, an company that invests in start ups, and Toyota have joined hands in Japan. SoftBank has also made an investment of $2.25 billion in General Motors Co’s self-driving unit Cruise, which has also received funds from Honda Motor.
(Adapted from NDTV.com)