Uber nears agreement on autonomous vehicles unit valued at $7.25bn

California-based company has spent more than $1bn on self-driving vehicle technology to compete with giants

The Logo of taxi company Uber is seen on the roof of a private hire taxi in Liverpool, Britain, April 15, 2019. REUTERS/Phil Noble

San Francisco-based ride-hailing giant Uber is close to finalising a deal with group of investors including Japan's SoftBank who will invest in its self-driving car unit about $1 billion (Dh3.67bn).

Other investors include automaker Toyota and auto-parts supplier Denso, the Wall Street Journal reported. The investment will give Uber's autonomous vehicle unit a $7.25bn valuation, the newspaper reported.

The  could enhance Uber’s pitch to investors ahead of its IPO next month, the newspaper said. Uber listing next month may value the company as much as $120bn and follows the listing of its rival Lyft last month.

If the investment in its unit is finalised it would help ease Uber’s future funding obligations while offering much-needed cash for the costly self-driving vehicles venture and ensure the company’s control of the unit, said the report.

Uber has spent more than $1bn on self-driving vehicle technology to compete with giants such as Alphabet, Apple and General Motors.

The company has reported $457 million in research and development expenses for its self-driving unit in its filing for an initial public offering. That was up from $384m in 2017 and $230m in 2016. Those numbers also include other tech projects, such as a flying car initiative.

In its last week’s filing, Uber said it had developed 250 self-driving vehicles, which had "collected data from millions of autonomous vehicle testing miles, and completed tens of thousands of passenger trips".

Uber started testing self-driving cars with passengers in 2016. However, a lawsuit with Waymo -  a self-driving technology development company - and a fatal incident in March 2018 delayed the evolution of its unit.

Last month, Uber has also agreed to buy the Dubai ride-hailing company Careem for $3.1bn.