San Francisco-based ridesharing company Lyft is to sell its autonomous driving arm to Toyota in a deal worth $550 million (€455.4 million), and an expansion on the Japanese automotive company's push to expand beyond pure carmaking.
Lyft Level 5
Source: Lyft
The sale is the latest in a list of aborted attempts by ride-sharing groups to build a network of robo-taxis.
In 2016, Lyft president John Zimmer predicted that autonomous cars "will account for the majority of Lyft rides within five years", which proved to be very premature. He has also predicted that "private car ownership will all but end in major US cities" by 2025.
Also read: VW and Microsoft team up for self-driving cars
As of February 2020, Lyft has provided over 100,000 "paid self-driving ride", which is enough for the company to claim that it hosts "the largest public self-driving platform in the US", though always with a safety driver behind the wheel.
The company has struggled to move to the next phase, however.
Lyft aborted efforts at building a driverless car come shortly after that of Uber, its main rival in the US, which abandoned its own 1200-person strong efforts in December, selling the business to Aurora for $400 million, though keeping an equity stake.
Toyota announced on Monday that it would pay $200 million upfront to Lyft to take over the 300-strong autonomous driving unit, known as "Level 5" - an ambitious moniker that refers to total autonomy irrespective of geography, terrain or weather - and that $350 million would be paid over a five year period.
Level 5 will become part of Toyota's new Woven Planet unit, which is "on a mission to design a happier planet . . . [by] transforming how people live, move and play through new innovations and investment in automated driving, robotics, smart cities and more."
Also part of Woven House is Toyota Guardian, which designs and creates driver-assist technology, and Toyota Chauffeur, which looks at total autonomy.
The automaker has shown caution in deploying its own self-driving technology, though earlier this month it launched a Lexus which featured Level 2 self-driving capabilities like changing lanes.
The launch of Toyota's previously planned Level 4 mobility service van, which is completely driverless on predefined routes, was intended to be at the 2020 Tokyo Olympic Games. However, in light of the pandemic, it was postponed.
The automaker holds a minority stake in Aurora, in which it had earlier invested, and said that the two would collaborate on the rollout of autonomous cars.
While he made no comment about potential conflict between the Lyft acquisition and the Aurora collaboration, Woven Planet CEO James Kuffner said that the deal "assembles a dream team" of engineers and scientists.
For Lyft, the deal removes a lossmaking unit that cost it around $100 million annually in operating expenses, helping propel the company towards "adjusted Ebitda profitability".
The company is still backing an autonomous future but will be directing its efforts towards deployment of the vehicles, rather than manufacture, as well as scaling "third party" technology on its network, said Logan Green, CEO.
"We look forward to continuing to partner with the best autonomous vehicle companies to bring this technology to market," he said.
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