Uber Offloads Another Unit — To Sell Air Taxi Business To Joby Aviation

Uber Technologies Inc UBER is selling its air taxi unit Uber Elevate to Joby Aviation, the two companies confirmed in a statement Tuesday.

What Happened: Joby Aviation said that the ride-hailing company will make an additional $75 million investment, as part of the merger deal.

The fresh capital influx is in addition to Uber’s $50 million investment in the aerospace company’s Series C funding round in January.

As a part of the Elevate acquisition deal, both the companies have agreed to integrate each other’s services in their in-house applications — a feature that combines both ground and air transport in one tech platform.

Joby has been developing an electricity-powered VTOL (vertical take-off and landing) aircraft for almost a decade. These aircraft can supposedly travel 150 miles in a single charge with a top speed of 200 mph. The secretive company's aerial feet is expected to commence operations sometime in 2023.

Why Does It Matter: To date, Joby has raised $820 million in financings, of which Uber contributed $125 million.

"These tools and new team members will be invaluable to us as we accelerate our plans for commercial launch,” Joby said.

Uber is also disposing of other units to improve its profitability figures. Earlier this week, the ride-sharing company announced a sale of its self-driving unit to Aurora Innovation. The combined value of Uber ATG and Aurora is estimated close to $10 billion.

Price Action: After a 1.47% drop during trading hours, UBER gained 0.55% in the extended hours to close at $53.30.