Uber Technolgies (UBER) is seeking strategic alternatives for its Uber Elevate business, including strategic partnerships or a partial sale, reports Axios, citing multiple sources.
According to Axios, the move would reflect CEO Dara Khosrowshahi’s focus on turning Uber into a profitable company- as reflected by Uber’s sale of part of its money-losing freight and self-driving businesses.
Uber Elevate previously revealed an ambitious plan of creating an air taxi service, with a potential launch date of 2023 for a few select cities. It also runs a New York City helicopter service, with about 80 employees, but the service was put on pause due to the coronavirus pandemic.
“We believe that aerial ridesharing will enable rapid, reliable transportation through a network of small, vertical takeoff and landing, all-electric vehicles” says Uber.
The company believes that elevating local transportation to the sky would help alleviate transport density on the ground and open up immense mobility bandwidth.
“For me the aha moment came when I started understanding that Uber isn’t just about cars,” Khosrowshahi said at an Uber Elevate Summit. “Ultimately, where we want to go is about urban mobility and urban transport, and being a solution for the cities in which we operate.”
An Uber spokesperson declined to comment on the Axios report.
Currently, the Street has a bullish outlook on Uber. The Strong Buy analyst consensus is based on 20 Buys and 3 Holds. With shares up 13% year-to-date, the average price target of $42 implies a further upside potential of about 24% to current levels.
“For a longer-term horizon, we continue to recommend Uber shares as a recovery-scenario investment idea with a stay-at-home floor in food delivery” comments Stifel Nicolaus analyst Scott Devitt. He has a buy rating on Uber and $41 price target (22% upside potential).
The analyst remains supportive of the long-term story despite core ride-hailing challenges that will likely remain a headwind for multiple quarters until arrival of therapeutics/vaccine relief and a return to more normal travel, work, and leisure habits. (See UBER stock analysis on TipRanks)
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