A further venture is emerging from Uber’s portfolio.

Postmates X, the robotics segment of the delivery service acquired by Uber for $2.65 billion last year, is currently pursuing external funding as it prepares to operate as an independent entity, as reported by multiple sources with knowledge of the situation.

The emerging company is being called Serve Robotics, referencing the autonomous sidewalk delivery robot – distinguished by its yellow and black markings – originally created and tested by Postmates X. The Serve robot, which has recently collaborated with Pink Dot Stores for delivery services in West Hollywood, is anticipated to be central to the operations of this new business.

Uber has not provided a statement regarding this matter.

According to the proposed arrangement being presented to potential investors, Ali Kashani, currently leading Postmates X and the Serve program, would oversee the new company. Anthony Armenta would continue to direct the startup’s software development, and Aaron Leiba would remain responsible for hardware – mirroring their current roles within Postmates X.

Uber intends to maintain an ownership position in Serve Robotics and establish a continuing commercial relationship. In return, Serve would acquire the intellectual property and assets. One source indicates that Uber is aiming to hold approximately a 25% stake in the newly formed company.

Currently, there is no officially registered company under the name Serve Robotics. However, the domain name serverobotics.com was registered on January 6.

Uber’s path to profits

This potential divestiture aligns with Uber’s focused business plan, which began evolving following its entry into the public market in May 2019 and gained momentum last year due to the challenges presented by the COVID-19 pandemic to the ride-sharing business. Previously, Uber encompassed a wide range of ventures within the transportation sector, including ride-hailing, micromobility solutions, logistics, public transportation options, food delivery services, and forward-looking initiatives such as self-driving cars and flying taxis. Chief Executive Officer Dara Khosrowshahi has been refining the company’s scope as he directs it towards achieving profitability.

During 2020, Uber divested its shared scooter and bicycle division, Jump, through a multifaceted agreement with Lime, and sold a $500 million ownership share in its logistics subsidiary, Uber Freight. The company also discontinued its autonomous vehicle program, Uber ATG, and its air taxi project, Uber Elevate.

Aurora took over Uber ATG in a transaction mirroring the Jump-Lime arrangement. Aurora did not make a cash payment for Uber ATG; instead, Uber transferred its equity in ATG and made a $400 million investment in Aurora, resulting in a 26% ownership stake in the newly formed entity.

A comparable agreement saw Uber Elevate sold to Joby Aviation in December.

Delivery services have remained a key area for Uber’s investment. Recognizing a significant opportunity as demand for its Uber Eats delivery platform increased, the company began seeking an acquisition to bolster its market standing. Uber attempted to acquire Grubhub but was unsuccessful, with European leader Just Eat Takeaway ultimately securing the deal.

Uber ultimately acquired Postmates, reaching an agreement in July 2020 to purchase the delivery startup in a stock-based transaction valued at $2.65 billion. The acquisition was finalized in December.

Serve, the friendly robot

Postmates’ initial steps into utilizing sidewalk delivery robots started in 2017 following their acquisition of Lox Inc., the startup founded by Kashani. As the leader of Postmates X, the company’s research and development division, Kashani focused on addressing a key issue: the inefficiency of using large vehicles to transport relatively small orders.

Postmates first showcased its Serve autonomous delivery robot in December 2018. An updated version – maintaining the same outward appearance but incorporating improved lidar sensors and other enhancements – was introduced in the summer of 2019, preparing for its official commercial rollout in Los Angeles.

Rather than collaborating with an external company, Postmates leveraged its own delivery information to guide the design and implementation of its sidewalk robot, as Kashani explained during a TC Sessions: Mobility 2020 event in October.

“Analyzing the data reveals that a significant portion of deliveries cover short distances, making these robots a practical solution for completing them,” Kashani stated, highlighting the potential of autonomous delivery bots.

The Postmates X team utilized the company’s past delivery data to create a detailed simulation. This simulation played a crucial role in the development of the Serve robot, informing decisions about necessary battery capacity and cargo space dimensions, among other characteristics.

While the robot accounted for a small percentage of Postmates’ overall delivery volume, the company observed growing interest in the bot within Los Angeles and San Francisco – the cities where it was commercially available – as the COVID-19 pandemic increased the need for delivery services that minimized physical contact.

Kashani mentioned in October that the robots had already successfully completed numerous deliveries in Los Angeles and were poised to extend their service area to include West Hollywood. This expansion, which occurred later in the year, included a unique modification: the Serve robots were repainted a vibrant pink to align with the branding of the Pink Dot stores.