Charles Alcock is managing editor of the AIN Media Group, having rejoined the company in 2019. He has been an aviation journalist since 1986, and previously worked for AIN from 1990 to 2017, most recently as editor-in-chief. His main focus is on covering new aviation technology and business models, as well as international news.
Having been raised in the London area, Alcock studied at the University of Manchester in the UK and earned an honors degree in Politics and Modern History. He speaks English and French, and some German.

Managing Editor

Charles Alcock

Joby Aviation is acquiring Uber Elevate, taking on its ambitious plans to launch commercial air taxi services using eVTOL aircraft by 2023. Details of the purchase price and terms were not disclosed in an announcement made late on Tuesday.

 


As part of the deal, parent company Uber Technologies said it will invest a further $75 million in California-based Joby. Uber also disclosed it invested $50 million in Joby during a January 2020 Series C financing round, for a total of $125 million. Overall, Joby has now raised $820 million in funding. The transaction is expected to close in the first quarter of 2021, subject to regulatory review and completion of closing conditions.

 


Joby and Uber will integrate their respective services into each other’s applications in a move that they say will enable “seamless integration between ground and air travel for future customers.” Under plans being developed by Uber Elevate since 2016, the proposed “aerial ridesharing” services are expected to begin in Dallas and/or Los Angeles in 2023.

 


Uber’s&nbsp;divestiture of Uber Elevate and the planned Uber Air service call into question the future involvement of the other named program partners: Aurora Flight Sciences (a Boeing subsidiary), Bell, Embraer, Hyundai, Jaunt Air Mobility, Overair (a spin off from Karem Aircraft), and Pipistrel. It is understood that there are an additional two unnamed partners in the program and that one of these might include the UK’s Vertical Aerospace.

 


In its short statement, Joby declined to provide any further details as to how it intends to deal with the other Uber Elevate partners, which are all developing rival eVTOL aircraft.&nbsp;AIN&nbsp;approached all of the confirmed partners for comment on how the deal will impact their involvement and future plans.

 


A spokeswoman for Pipistrel said the deal will not change the Slovenian company’s plans. “We continue with our project of developing the eVTOL vehicle and we are constantly in communication with our other customers,” she said.

 


Jaunt Air Mobility also indicated that it will press ahead with its four-passenger, all-electric aircraft that it intends to certify under existing FAA Part 29 rules for helicopters that will allow for all-weather operations. "Our business model has never been dependent on Uber as Uber never intended to purchase or operate aircraft," said the company's CEO Martin Peryea. "Our success and business model is based on our ability to perform and expand existing air service, certification requirements, knowledge of aircraft operations and pilot training, and acceptance by the consumer where safety is paramount."

 


He expressed regret at Uber's move to exclude other aircraft developers and seemingly limit choice for consumers,&nbsp;commenting: "We see this as a loss for all the stakeholders as Uber was able to bring a larger consortium to the forefront of critical audiences such as government entities and broader consumer input. Uber has stated that it will offer each aircraft operator access to their ride-sharing app that will allow customers to seamlessly hair rides between air taxi operations and ground transport."

 


Boeing indicated that it does not see the change of ownership at Uber Elevate altering its plans for the sector, which may already be reshaped following its announcement in September that it will close its Boeing NeXt advanced technology division. In addition to Aurora Flight Sciences, the U.S. aerospace group&nbsp;retains a stake in the Wisk joint venture with Kitty Hawk, which is developing the Cora eVTOL aircraft.&nbsp;

 


"Boeing continues to be focused on building the safe, reliable, and economical technologies that will enable the future of flight," said a spokeswoman. "Boeing subsidiary Aurora Flight Science's relationship with Uber Elevate was prior to their acquisition by Boeing and Aurora's work around urban air mobility is not affected by Uber Elevate's move."

 


Embraer also indicated that it will press ahead with plans for the urban air mobility sector through its newly created division called Eve.&nbsp;"We are just as enthusiastic as ever about the bright future we look forward to co-creating with the community and our partners, current and future," said the Brazilian company in a written response. "Eve is very well positioned to have a leadership role in this new market, leveraging Embraer capabilities as one of very few companies with a 50-year history in the aviation industry."

 


Joby is developing a four-seat model that will have a range of 150 miles and a top speed of 200 mph. The company appears to have plans for a larger vehicle designated S5.

 


According to individuals close to more than one of the other partners, Uber had previously given assurances that it would not directly invest in any one of these companies. It would appear that none of the partners were made aware of the previous investment into Joby.&nbsp;It further would appear&nbsp;that last week Uber informed some or all of the partners about the pending deal but that none of them have been informed as to how or when their existing memorandums of understanding with the group might be terminated.

 


“We were proud to partner with Uber Elevate last year and we’re even prouder to be welcoming them into the Joby team today, while deepening our cooperation with Uber,” said Joby Aviation founder and CEO JoeBen Bevirt. “The team at Uber Elevate has not only played an important role in our industry, they have also developed a remarkable set of software tools that build on more than a decade of experience enabling on-demand mobility. These tools and new team members will be invaluable to us as we accelerate our plans for commercial launch.”

 


According to Mike Hirschberg, executive director of the Vertical Flight Society, the investment by Uber and restructuring of Uber Elevate will further enhance what he claims is Joby's leading position among eVTOL aircraft developers. He indicated that Joby may yet continue to work with other Uber Elevate partners.

 


"Uber has made tremendous contributions to advancing urban air mobility (UAM) over the past four and a half years," he said. "They have helped bring the community together and push all the necessary but disparate pieces together. Their leadership in supporting and expanding the ecosystem cannot be overstated."

 


Michael Dyment, managing partner&nbsp;with Nexa Capital Partners, said the deal marks a turning point in the UAM sector. “Uber Elevate has been the catalyst for all the energy in the UAM and drone space and we owe a debt of gratitude, but the industry has now grown far beyond Uber’s capacity,” he told AIN.

 


Nexa, which is directly involved as a conduit for investment in the sector, is mainly focused on what it sees as the very large ground infrastructure and traffic management requirements to make commercial services possible. “Uber’s business model faces a lot of challenges because they want to have exclusive access to infrastructure but are not willing to pay for it,” he commented.

 


In his view, eVTOL aircraft developers such as Joby that intend to retain full control of flight operations will find this approach difficult to sustain. “The logical operators to provide these services are going to be the Part 135 helicopter operators who have all the safety programs and support infrastructure in place,” he said.

 


Uber announced the sale of Uber Elevate less than 48 hours after announcing it is offloading majority ownership in its Advanced Technologies Group to automated vehicle group Aurora. The full terms of the equity swap deal have not been disclosed, but Uber has confirmed it will invest a further $400 million in ATG and retain a 26 percent stake. Uber CEO Dara Khosrowshahi, said the transaction with Aurora will help the group to achieve profitability on an adjusted basis by the end of 2021. He will take a seat on the board of Aurora.

 


Last month, Uber reported third-quarter losses of $1.09 billion on revenues of $3.13 billion, with its Rides passenger business taking a hit in the wake of the Covid pandemic while its Delivery operations grew. In September, the group refinanced $500 million in debt&nbsp;by selling bonds due in 2028 at an interest rate of 6.25 percent to settle notes due for repayment in 2023 at 7.5 percent. Between the deals for Uber Elevate and the Advanced Technologies Group, Uber is effectively paying around $525 million to compensate the new owners for taking on the financial burdens of both ventures.

 


“Advanced air mobility has the potential to be exponentially positive for the environment and future generations,” said&nbsp;Khosrowshahi. “The deal allows us to deepen our partnership with Joby, the clear leader in this field, to accelerate the path to market for these technologies. We’re excited for their transformational mobility solution to become available to millions of customers who rely on our platform.”

 


Meanwhile, German eVTOL aircraft developer Volocopter, which today announced plans to launch air taxi services in Singapore, said its strategy is not impacted by the change in ownership of Uber Elevate since it is more focused on opportunities in Europe and Asia. These include recently announced partnerships in Paris and Japan.

 


The company questioned Uber Elevate's commitment to a "vehicle-agnostic" approach to establishing urban air mobility services. "What happens to all the data that has been shared with and by Uber Elevate which we now know has been favoring a certain design," a company spokeswoman asked rhetorically.&nbsp;

 


This story is from <a href="https://futureflight.aero/">FutureFlight.aero</a>, a resource developed by AIN to provide objective, independent coverage and analysis of new aviation technology, including electric aircraft developments and advanced air mobility.

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