Uber is in talks to offload its Elevate unit to Joby Aviation, first reported by Axios and independently confirmed by eVTOL.com. A deal could be announced before the end of the year. Elevate seeks to launch on-demand air taxi services in Los Angeles, Dallas, and Melbourne by 2023.
In 2016, Uber released its now-famous “Elevate” white paper, a well-researched proposal outlining the feasibility of an on-demand aviation transportation system in cities around the world. That document, along with subsequent annual Elevate summits the company hosted from 2017 to 2019, helped launch the concepts of eVTOL aircraft and urban air mobility (UAM) from a quixotic fantasy pursued by billionaire dreamers to a bona fide sector of aerospace with dozens of serious aircraft development projects at varying stages.
But Elevate itself, which reportedly has approximately 80 employees, doesn’t have much in the way of a product or intellectual property. Elevate has taken an asset-light, ecosystem-stewardship approach to bringing its dream to life, developing economic models and aircraft performance targets that it then invited outside companies and investors to build against.
The promise of a spot on Uber’s future Air service — and access to the app’s billions of customers served annually in cities around the world — was enough to lure at least eight companies, including Joby Aviation, to at least begin the journey of designing, prototyping and certifying an aircraft suitable for Elevate’s mission. Many have since shuttered their eVTOL projects, shifted focus away from urban passenger transit, or faced difficulties fundraising.
Uber Elevate has made more direct contributions to the advancement of the UAM vision, including in-depth collaboration with regulatory agencies such as the Federal Aviation Administration on how to certify distributed electric propulsion aircraft.
The team also developed airspace simulation technology, conducted extensive studies on demand and suitable markets for UAM, and is building a suite of cloud-based services to support safe aerial operations — all potentially of value to eVTOL manufacturers, of which many, including Joby Aviation, are exploring operating their aircraft rather than selling them. Some key talent has already left the business unit, including Elevate co-founder Nikhil Goel; others, such as chief scientist Mark Moore, are reportedly heading for the door. Representatives for Uber and Joby Aviation declined to comment for this story.
Dara Khosrowshahi, named CEO of Uber in 2017 after founder Travis Kalanick was pushed out of the company, is determined to demonstrate the ride-hailing giant can turn a profit. Uber went public in May 2019 and that year reported a loss of $8.6 billion on revenues of just $14.1 billion. This year, facing one of the largest economic disruptions in modern history, the company offset drastic losses in its Rides division with soaring sales in Eats, though the latter still hasn’t broken even.
With investors’ appetite for massive losses fading, Uber has consolidated its investments around its core Rides and Eats divisions in pursuit of profitability. Uber sold its micromobility business to Lime, sold stake in its Freight business for $500 million, and is reportedly in talks to sell its Advanced Technologies Group (ATG) — mostly comprising the company’s self-driving car development, a high-priced long-term investment that is taking far longer than expected to pay off — to autonomous vehicle startup Aurora.
Khosrowshahi has also pursued buyers for Elevate, which is separate from Uber ATG, throughout the year, approaching Joby, Hyundai Motor Group and other potential buyers, sources with knowledge of these events tell eVTOL.com. While not nearly as expensive as ATG, with just 80 employees and few physical assets besides its planned $24 million investment into a research center in Paris, France, the move is reflective of Uber’s larger goal to cut extraneous long-term technology projects and focus on its core revenue centers, where the company has invested in acquiring Eats rival Postmates and a joint venture in South Korea with SK Telecom.
Uber grew to dominate the ride-hailing space during an era of endless fascination with tech founders, which allowed WeWork’s Adam Neumann to invest $13 million in a surfing company (and secure up to $1.7 billion on his way out of the company). That mindset also led to Kalanick investing millions on laying the foundations for a global ecosystem of flying cars, in pursuit of leadership in the mobility space.
Joby Aviation, the only one of eight Uber Elevate partners that committed to bringing its aircraft to market on the company’s ambitious 2023 timeline, seems a natural fit for the unit. Joby also intends to operate its own aircraft service, for which the company will need deep software expertise and could potentially leverage Elevate’s infrastructure, airspace and operations partnerships — some of which are substantive, and others which are little more than a signed agreement.
“When Joby joined Uber as a vehicle partner in December 2019, I said it was a ‘match made in heaven’ because they are the leading eVTOL aircraft developer and Uber the leading air taxi ecosystem developer,” Mike Hirschberg, executive director of the Vertical Flight Society, told eVTOL.com. “One of the reasons Joby didn’t join before then is because they were considering providing their own service.”
What the sale of Elevate means for the unit’s other aircraft partners is less certain. Some, perhaps seeing the writing on the walls, have begun forming other partnerships; Jaunt Air Mobility announced Access Skyways in collaboration with PS&S and PRICE Systems, and Hyundai has partnered with Incheon International Airport Corp., KT Corp and Urban-Air Port. Others, including Pipistrel Vertical Solutions and Aurora Flight Sciences, have shifted their focus away from passenger-carrying air taxis or halted development entirely. The Elevate team’s deep knowledge of each vehicle partner’s aircraft — each a competitor to Joby — is a likely concern for these companies moving forward.
Uber Elevate was the main force behind the aggressive target of 2023 for commercial eVTOL services, with Joby and Volocopter the only other companies committed to that timeline. Numerous other aircraft developers — including Hyundai, Bell, Jaunt, and Lilium — plan for their aircraft to enter into service later in the decade.
Many cities aside from Elevate’s launch locations, too, have announced longer — perhaps more realistic — time horizons for the launch of UAM operations. Osaka, Japan intends to offer eVTOL service in coordination with the region’s World Expo 2025. Seoul, capital of South Korea, announced the same timeline for initial air taxi operations, though its likely native vehicle partner, Hyundai, won’t be ready until 2028.
The largest shockwave industry might feel as Elevate is decoupled from Uber lies in the software backbone, passenger aggregation platform and clear path to market for multi-modal air taxi operations. Joby, Lilium and a few other air taxi developers have expressed interest in developing their own platforms, a massive resource investment that draws on vastly different core competencies than aircraft development, but neither has explored the realities of rapid on-demand multi-modal transportation, as Elevate did with its Uber Copter service in New York City.
Sure, existing helicopter operators can snap up eVTOLs and offer trips across gridlocked cities. But for these trips to provide value to customers, they have to offer time savings that requires consistently perfect execution of the hand-off from car to aircraft and back — something UAM services such as Blade and Skyryse have dabbled with. If riders lose precious minutes switching transportation modes or waiting for other rideshare customers to fill the aircraft, it will be difficult for an air taxi service to be worth the cost.
The eVTOL industry has likely matured to the point where it will survive the disappearance of Uber Elevate, or its transition into a part of a leading aircraft developer. But the absence of Elevate from its central cheerleading, thought leadership and organizing role will surely be felt — at least, until other companies take up the mantle.