Uber Looks to Fly, Even as It Still Learns to Drive

June 11, 2019

By Hope King

Uber is serious about realizing its aerial transportation dreams. The newly public company is holding its third annual Elevate Summit this week in Washington D.C. to show off its progress so far in bringing its vast logistics and ride-hailing network to the skies ー and to woo more partners in the process.

Uber CEO Dara Khosrowshahi and senior leaders from the Elevate, Advanced Technologies Group, and Uber Eats business units will present to a mixed crowd of private companies, government agencies, and press on Tuesday and Wednesday. The expected slew of announcements will cover everything from engineering a global flying taxi network, to flying food deliveries, and urban planning for the ground and the air.

As of Tuesday morning, Uber ($UBER) announced it will partner with AT&T ($T) for connectivity on various ride options, and will eventually use AT&T's 5G network. Uber also revealed Jaunt Air Mobility as a manufacturing partner for electric vertical takeoff and landing vehicles, or eVTOL for short. Uber had already been working with five companies including Boeing ($BA), Embraer, and Bell.

(Helicopters take off and land vertically, but they have at least one large rotor whereas eVTOL designs vary with multiple kinds of small rotors.)

Against this week's event is a backdrop of internal change and a struggling stock, but analysts seem to be willing to give Uber a break over its plans for profitability.

Uber on Friday announced internally that Chief Operating Officer Barney Harford and Chief Marketing Officer Rebecca Messina were resigning. Harford was the subject of an internal investigation for comments he made around race and gender, according to The New York Times. Messina's role was rolled into the company's policy team, led by Jill Hazelbaker.

The major shakeup was seen as a consolidation of power ー with Khosrowshahi taking over daily operations ー and a sign of the company's difficulties since going public in May.

After a disappointing debut, Uber's stock has struggled to stay near its $45 IPO price ー closing at that price only once since May 10. But much of Wall Street seem optimistic about Uber's future. And that's largely because of the vision of autonomous technology and expanded services, including Uber Eats.

Bank of America, which has a buy rating on the stock, believes "Autonomous vehicles will reduce driver dependencies and increase long-term margins" aka reduce Uber's costs, as well as the fact that "Consolidation in food delivery sector will be positive for Eats."

BTIG began its Uber coverage with a buy, and cited autonomy as a factor for an $80 price target.

At the moment the company's barely nascent air taxi service has not been considered with any significant weight.

Uber's first earnings report as a publicly traded company revealed losses exceeding $1 billion for the first three months of the year, and sales growth down by nearly 70 percentage points compared to the first quarter of 2018.