RPT-BREAKINGVIEWS-Uber founder turns US-China rift to his advantage

By Katrina Hamlin

HONG KONG, June 27 (Reuters Breakingviews) - Robotic taxis and geopolitical tensions offer Uber UBER.N founder Travis Kalanick a lift back to the industry where he first made – and sullied – his name.

The ride-hailing company is in talks with its former boss about the possibility of funding an acquisition of autonomous driving company Pony AI’s PONY.O U.S. arm, the New York Times reported on Thursday, citing sources.

Kalanick has kept his distance from the mobility sector since his ouster as Uber CEO eight years ago, following a string of scandals. His current venture, CloudKitchens, specialises in commercial cooking spaces for takeaways.

Now the rise of robotics has once again piqued his interest. He has experimented with automation in his new venture, and has discussed emerging tech including self-driving cars during increasingly frequent chats with his successor at Uber, Dara Khosrowshahi, the Times reported.

Uber is likewise rekindling a fascination with the idea. Replacing drivers with software was once at the heart of its business plan. Khosrowshahi struck a deal to sell the company’s cash-hungry autonomous vehicle unit in 2020, but he has since built a roster of robotaxi partners.

They are not the only ones. A new generation of cheaper, smarter robotaxis makes the economics more compelling, Pony AI co-founder and CEO James Peng told Breakingviews on a podcast this week. Tesla launched a mini fleet of driverless cabs on Sunday.

But tensions between Beijing and Washington mean the fledgling industry is increasingly fragmented, forcing U.S. and Chinese ventures to focus on their respective domestic markets. Rules announced in January, for example, will prohibit the import and sale of connected car hardware and software to the U.S. from the People’s Republic.

That’s why Pony AI could be open to overtures from Kalanick. The $5 billion company said it had “no plans for further expansion for the foreseeable future” for American operations in its IPO filings last year. The 101-strong team focuses on R&D and testing, and generated less than 1% of global revenue last year, per its annual results released in March, versus 15% in 2022.

Pony seems prepared to bid the U.S. farewell. The company “forked” its software in 2022 in anticipation of a split, the Times noted. The prospectus for its November initial public offering also flagged the risk of forced delistings. Just six months after its New York debut, it filed confidentially for a Hong Kong listing, Bloomberg reported.

For both Pony and Kalanick, a deal could help engineer a fresh start.

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CONTEXT NEWS

Uber is in talks with its founder and former CEO Travis Kalanick about funding his acquisition of autonomous driving company Pony AI’s U.S. arm, according to a report by the New York Times on June 26, citing sources.

Shares in New York-listed Pony AI closed up 12% at $14.58 on June 26.