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Uber shifts gears: China sale makes way for big bet on driverless cars

A strategic retreat finds the ride-hailing giant investing in tomorrow's technology

It’s been a big week for Uber. The globe-spanning ride-sharing company sold its $8 billion Chinese operation to a China-born rival and announced a mapping initiative primed to take on Google, pointing to the various ways the tech titan is evolving.

Since 2013, Uber has dedicated more than $1 billion to growing its Chinese business—including subsidizing rides so the fee was below cost, as well as working with numerous local partners to curry favor with regulators. The company’s CEO Travis Kalanick even spent significant time overseas trying to bolster the company’s efforts in the expanding market. But new Chinese guidelines for ride-sharing passed just last week ban such subsidies moving forward, likely an important factor in the company’s sale of UberChina.

The new owner is local ride-hailing service DiDi Chuxing (which received a $1 billion investment from Apple, which has been revving up its own driverless car development program). In exchange for its Chinese arm, Uber now has a 20 percent stake in the Chinese company, and can focus on other hot markets, including Indonesia and India. The sale will also "free up substantial resources" for other projects, according to the Wall Street Journal.

Perhaps the largest of these future-forward initiatives is in the realm of self-driving cars, a technology that would dramatically change the Uber business model and the company’s bottom line. Uber is making a significant investment in mapping technologies to eventually eliminate its dependance on Google—arguably the current leader in self-driving vehicles—for geolocation and navigation. Uber is even rolling out a program in Mexico to take street view-like photos using a fleet of camera-equipped cars, according to The Atlantic. The company is also partnering with satellite-image company DigitalGlobe to incorporate high-res images into its new mapping capabilities.

By shifting its focus from a bruising battle for market share in China (a decision that many American tech companies have also made over the last few years), Uber can pivot towards expanding technology that may help it pull ahead of its competitors. The playing field has changed considerably for the transportation disruptor.

Source: WSJ

Source: The Atlantic