American company Uber Technologies Inc. is selling off its flying taxi division called Uber Elevate to Joby Aviation and investing in the startup, an American venture-backed aerospace company. This makes it twice in the same week that Uber has abandoned a side project as it aims to turn a quarterly profit next year.

Uber Elevate, which will be acquired by Joby Aviation, was Uber’s division that imagined a future where air taxis shuttled people above traffic-jammed highways. Uber Elevate also operated a helicopter service in New York City, but it suspended flights during the pandemic. As part of the agreement between the companies, Uber is investing $75 million in Joby, after a previously undisclosed amount of $50 million investment in the startup in January.

Uber Chief Executive Dara Khosrowshahi has been using this strategy this year as the company parts ways from its science fiction-type ambitions and focuses on making money. The Joby-Elevate deal strikes a similarity with two other Uber deals this year. In May, Uber led a $170 million funding round in micro-mobility startup Lime, and the startup acquired Uber’s micro-mobility subsidiary Jump. Also, earlier this week, Aurora Innovation, an autonomous vehicle startup, reached an agreement with Uber Technologies Inc. to buy the ride-hailing firm’s self-driving unit in a compound deal that will value the combination of the company at $10 billion.

Uber reported deepening losses in the third quarter in November, following which Khosrowshahi attempted to make the investors believe that the company has a path to making money, even as the coronavirus pandemic has hammered revenue. Uber has set its sights on delivering a quarterly adjusted profit by the end of next year.

Uber’s deal with Joby brings the total money raised by the startup to $820 million while California-based Joby’s investors include Toyota Motor Corp., which invested $394 million in the startup earlier this year; the venture capital arms of JetBlue Airways Corp. and Intel Corp., and Capricorn Investment Group. Joby Aviation was valued at $2.6 billion by investors earlier this year.

The Joby-Elevate deal is expected to close in early 2021; the two parent companies have worked out a way to integrate their respective services into each other’s apps.

“Advanced air mobility has the potential to be exponentially positive for the environment and future generations,” Uber CEO Dara Khosrowshahi said in a statement according to TechCrunch. “This deal allows us to deepen our partnership with Joby, the clear leader in this field, to accelerate the path to market for these technologies.”

While Joby is considered one of the leaders, CEO JoeBen Bevirt has admitted that Elevate played a role in shaping the nascent industry, including establishing some of the competitors’ benchmarks.

“The team at Uber Elevate has not only played an important role in our industry, but they have also developed a remarkable set of software tools that build on more than a decade of experience enabling on-demand mobility,” he said in a statement.” These tools and new team members will be invaluable to us as we accelerate our plans for commercial launch.”

The company has given information about its all-electric vehicle to fit four passengers and a pilot and fly up to 150 miles on a single charge. Its preliminary version of the vehicle looks like a cross between a helicopter and a drone.

SOURCE