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This week: Uber CEO Dara Khosrowshahi pulls the plug on another one of Travis Kalanick's moonshots
It's been more than three years since Dara Khosrowshahi famously got "the D" ("decision-making authority," to Khosrowshahi) at Uber, taking control of the ride-hailing company after a chaotic ride with founder Travis Kalanick. Uber's culture has completely changed since then. Now, Khosrowshahi is cutting loose some of Kalanick's most-high-profile business endeavors.
- Uber's flying taxi group, Elevate, is being sold to Joby Aviation, the companies announced on Tuesday. Air taxis always seemed a bit far-off as a revenue driver for Uber, even as an Uber exec insisted last year that the service would be operational by 2023. Uber is investing $75 million in Joby (along with a previously undisclosed investment of $50 million) as part of the deal.
- On Monday, Uber announced plans to offload its self-driving car division — known as the Advanced Technologies Group (ATG) — to Aurora, a startup founded by ex-Googlers. As with the Joby deal, this "acquisition" by Aurora is more of an asset transfer, with Uber investing $400 million in Aurora and getting a 26% stake in the company.
Khosrowshahi's jettisoning of the Kalanick moonshots has a bit of a Trump-dismantling-everything-Obama feel to it. And there's no question that Khosrowshahi has a very different vision for Uber than his predecessor.
- But the real motivation for the divestitures likely has more to do with how Uber has changed. Now that it's a public company with public investors to answer to, Uber has less of a runway to indulge in passion projects (especially since it's still losing billions of dollars every year).
- To satisfy investors, Uber needs to use its gunpowder to fight for its core ride-hailing and food-delivery businesses. Uber recently spent more than $52 million successfully lobbying for California's Prop 22, which allows drivers to be classified as independent contractors rather than employees, skirting costs for Uber. There's a lot more of these high-stakes regulatory threats on the horizon, and the outcomes will impact Uber's business much sooner than flying taxis.
As for Kalanick, he's busy working on a new project: ghost kitchens, the delivery-only restaurants that have thrived during pandemic lockdowns.
After this month's IPO bonanza, the biggest unicorn listings could be banned in the US
Three weeks, six unicorns, and billions of dollars. It sounds like the premise for a movie, and perhaps one day it will be — when 2020's strange rush of December IPOs is remembered.
- DoorDash and Airbnb are on track to make their public market debuts this week. Each company has raised the price of its shares in the run up to the offerings (DoorDash priced its IPO at a $34.2 billion valuation on Tuesday), suggesting strong investor demand. Keep an eye on tickers "DASH" and "ABNB" this week as trading begins and hordes of Robinhood users place their orders.
- Also in the December IPO pipeline are Wish, Affirm, Roblox, and C3.ai. As Business Insider columnist Adam Lashinsky writes, the C3.ai IPO is a fascinating tale of Silicon Valley "trend surfing," with tech industry veteran Tom Siebel riding a killer wave.
- One of the big winners here is Sequoia Capital, the venture capital firm that warned the world in March that a "black swan" was about to cause a startup apocalypse, but now says the deadly swan decided to spare its own portfolio. According to Bloomberg, some of Sequoia's funds have generated returns between 8x and 11x — and that's before the Airbnb and DoorDash IPOs.
Amid the IPO celebration there's a menacing cloud on the horizon for US exchanges like Nasdaq and NYSE. A proposed law aims to prevent Chinese companies from listing on US stock exchanges unless they agree to have their financial records audited by US regulators.
The legislation has sailed through Congress with rare bipartisan support and could be signed into law later this month. Public Chinese companies like Alibaba and Baidu could be forced to delist from US exchanges under the law.
- More significant, US exchanges could lose out on the next batch of unicorn IPOs, in which Chinese tech startups are heavily represented.
- According to CB Insights, the two most valuable private tech companies in the world today today are ByteDance ($140 billion) and Didi Chuxing ($62 billion), both based in China. And eight of the world's 20 most valuable private tech companies are Chinese. Those companies would all have to list outside the US under the new rule, and it's unclear what that might mean for the exits of US-based VCs (including, in ByteDance's case, Sequoia) who backed the companies.
Quote of the week:
"If you're going to be buried somewhere, it would be cool to be born on Earth and die on Mars — just not on impact."
— Elon Musk, CEO of SpaceX and Tesla, discussing his wish to be buried on Mars during an exclusive interview with Mathias Döpfner, the CEO of Business Insider's parent company, Axel Springer.
Snapshot: Broken intergalactic radio
Let's hope the aliens can adjust their transmissions. On December 1, the Arecibo Observatory in Puerto Rico — one of the world's most powerful instruments listening for extra-terrestrial communications — suffered a catastrophic and fatal failure.
The 1,000- foot-diameter telescope was damaged earlier in the year during a tropical storm and it was already scheduled to be disassembled. But before that could happen, a cable snapped and the 900-ton platform suspended in the air to receive radio waves came crashing down into the disk below. (You can watch footage of the collapse here.)
During its 57-year lifetime, Arecibo mapped planets like Venus, discovered the first-known exoplanet, and tracked potential hazardous asteroids. But most importantly, it was our walkie-talkie with potential alien life.
In 1974, Arecibo beamed a powerful interstellar message into space. And since then, it has kept a constant ear open for radio signals that could emanate from alien technology in other galaxies. It will take some time to rebuild a telescope as powerful as Arecibo — but there's time. The message it sent in 1974 is still en route to a star cluster that's about 25,000 light years away.
Google held a meeting to calm rising employee tensions over the ousting of AI ethicist Timnit Gebru. Insiders say it only raised more concerns.
Sources: Poshmark's IPO is back on and its S-1 paperwork is expected to become public 'in the next week or so'
Hackers are breaking into Snapchat accounts and holding nude photos for ransom. One college woman says Snap did nothing to help her for days after her nudes were stolen.
Tony Hsieh sold Zappos for $1.2 billion in his 30s. He was dead by 46. Inside his final Park City months, where he hoped to deliver more happiness as he spiraled.
Here's everything we know about Apple's stylish new headphones, the $549 AirPods Max
Not necessarily in tech:
Jared Kushner's name is radioactive in real estate right now. Some developers and investors say they're avoiding deals with his family's company, while others report they're getting penalized for past partnerships.
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Axel Springer, Insider Inc.’s parent company, is an investor in Uber.
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