At the CES technology conference, Uber Technologies, Inc. (UBER - Free Report) announced its partnership with South Korean carmaker Hyundai Motor Co. to develop flying taxis for Uber Elevate, the aerial division of the former.
The electrically powered “personal air vehicle” or PAV will bear the capacity of carrying up to four passengers and traveling at a speed of 180 mph to cover trips up to 60 miles. Additionally, the air taxis will ply at a height of around 1,000-2,000 feet to avoid traffic congestion.
Uber is collaborating with NASA and manufacturers, such as Textron Inc.’s Bell and Joby Aviation for the air taxi project. Eric Allison, head, Uber Elevate, believes that Hyundai, which makes affordable automobiles, can develop Uber Air vehicles at “rates unseen in the current aerospace industry” and produce superior quality aircraft at high volumes, which in turn, would lower passenger costs per trip.
While the company will conduct demonstration flights this year, it will launch commercial operations in 2023. The initial services will begin in Dallas, Los Angeles and Melbourne, Australia. Hyundai stated that a human pilot will at first be required to drive the vehicles. However, eventually it will operate autonomously.
Uber to Sell Bus Tickets
In another venture, Uber plans to sell bus tickets in Las Vegas through its app. Customers can plan their trips and purchase tickets on the Uber app using the public transit options. Riders will also have the benefit of using the tickets while being offline. In the coming months, Uber hopes to extend this service to other places as well.
Since going public on May 10, 2019, Uber has been grappling with cost woes and incurred losses in each of the first three quarters of 2019. Evidently, the stock has declined more than 24% since its public debut. Although the company’s latest undertakings will bump up costs, the same may offer some respite to the stock in case these innovations gain popularity.
Zacks Rank & Key Picks
Uber carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Baidu, Inc. (BIDU - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Sohu.com Inc. (SOHU - Free Report) . While Baidu sports a Zacks Rank #1 (Strong Buy), Alphabet and Sohu.com carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Alphabet have rallied more than 28% in a year’s time. Meanwhile, Baidu and Sohu.com flaunt an impressive earnings history, having outperformed the Zacks Consensus Estimate in three of the last four quarters.
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