It won’t be too long before riders will be able to zoom through traffic congestion, and Uber is here for it. A major expansion is underway for the ride-hailing industry as Uber unveils its collaboration with Joby Aviation.
Uber Technologies shared on Feb. 25 the launch of Uber Air, powered by Joby Aviation, a California-based transportation company. This service will let riders book Joby’s four-passenger, all-electric, vertical take-off and landing air taxi directly through the Uber app.
Uber stock was up 2.7% on Thursday, Feb. 26, following the announcement, up around 3% over the past week. This extended its recent turnaround, much needed after its previously uneven stretch, as it remains down 8% year to date.
The service is expected to debut in Dubai later this year, marking a major and concrete milestone in commercial air mobility.
Uber “connecting the ground and the sky” with Joby air taxi
Under this partnership, ground and air transportation will come together as Uber weaves the air taxi option directly into its app for qualified destinations. The air taxi will also produce significantly less noise than traditional helicopters, making for a more ambient travel experience.
For investors, this partnership adds to a growing list of strategic expansions and updates from Uber in recent weeks. As outlined in its recent Q4 earnings call, the company has rolled out multiple initiatives across delivery and transportation, reinforcing its ambitions to position itself as a leader in the space.
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Air taxis in a commercially viable, cab-like setting still represent an emerging technology and face stricter regulation in the U.S. Additionally, it’s a costly endeavor. To offset the costs of aircraft development, Uber partnered with Joby, working since 2019 to “deliver the future of urban air mobility.”
In 2021, Joby acquired Uber’s Elevate division, which was integral to “developing the tools required for market selection, demand simulation, and multi-modal operations.”
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Joby eyes rollout to U.S. as FAA certification process begins for air taxi
From panoramic window views to less time spent in traffic, Uber is going all out to advertise its new air taxi. Joby’s all-electric aircraft can travel at 200 mph, up to 100 miles on a single charge, and has been engineered for city use to “enhance safety and designed for urban integration.”
And while the road to bringing Joby air taxi service to the U.S. looks longer, Uber said Joby has already completed more than 50,000 miles of flight tests and started the “final stage” of the Federal Aviation Administration (FAA) certification process.
The company’s stock has been volatile, down 8% this past month and 12% over the quarter. But these announcements have given it a much-desired boost this past week, pulling it out of its slump, especially after the earnings announcement on Feb. 4, which sparked mixed sentiment from investors and analysts alike.
Analysts at Bank of America see choppy near-term profitability amid Uber’s tech expansion, but forecast its long-term growth. And although Goldman Sachs lowered its price target to $125 from $126 post-earnings, it has confidence in Uber’s free cash flow potential and sees the company as well-positioned to scale its core markets and expand profitability.
In the near future, Uber and Joby will bring Blade’s commercial helicopter service to the Uber app, paving the way for electric air taxi service to expand in several markets around the world, including New York, Dubai, Los Angeles, the U.K., and Japan.
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