Toyota Buys Lyft’s Self-Driving Division In $550 Million Deal
Toyota is making a push into automated vehicles (AVs) with its recent acquisition of Level 5, Lyft’s self-driving division. Woven Planet Holdings, a subsidiary of the Japanese automaker, has agreed to pay the ride-sharing company a total of $550 million for the unit—$200 million upfront and $350 million over the course of five years. The deal will close in the third quarter of this year, and both companies are set to benefit from the sale.
With Level 5 automation under its belt, Toyota will have access to Lyft’s fleet data as well as its 300 employees for future projects regarding AV technology. Lyft, on the other hand, will see an estimated annual savings of $100 million in non-GAAP expenses, which will help put the company in a more profitable position.
“This is the first step of establishing and bringing together the people,” said James Kuffner, the CEO of Woven Planet. “Obviously, building technology and product requires people, and that’s much of what this acquisition is about.”
The deal ultimately marks the end of Lyft’s ambitions to develop and deploy its own self-driving vehicles. It follows in the footsteps of its competitor, Uber, which previously sold its self-driving division in order to save money. Uber was also embroiled in controversy in 2018 when one of its self-driving cars killed a pedestrian, so that incident could have influenced the company’s decision to back out of AVs as well.
Lyft initially launched its Level 5 division in 2017 with plans to operate the majority of its ride-sharing service with AVs. It even bought out Blue Vision Labs, an augmented reality startup based in the UK, for $72 million in order to accelerate the R&D process. Unfortunately, despite its optimism, Lyft quickly realized that AVs are still nowhere close to being ready for mass adoption. Even today, many of the top companies leading the AV movement have not fully committed to a commercialization deadline.
That said, Toyota believes it can revolutionize the AV game with its latest technologies. So far, it has developed various AV products that look promising, including “Chauffeur,” a self-driving software, and “Guardian,” a driver-assist system similar to Tesla’s Autopilot. Currently, neither product is being offered in any of Toyota’s car productions.
Last year, Toyota unveiled its “Woven City” research facility in Japan, which it hopes to transform into a “prototype city of the future.” There, it will conduct AV tests, experiment with street designs, and innovate new robotics. It’s only a matter of time before Toyota and other companies start introducing AVs as part of their regular line-ups.