Lyft is following Uber’s move and is exiting the self-driving car game after years of costly investment in research and development.
Lyft is offloading its autonomous car division to Toyota, the world’s largest carmaker, in a $550m deal.
Woven Planet, a subsidiary of Toyota that’s focused on self-driving technology, has acquired the autonomous driving arm of the US company for $200m upfront with $350m paid over five years.
Logan Green, CEO of Lyft, said the acquisition “represents a major step forward for autonomous vehicle technology”.
Lyft’s autonomous car division Level 5 was launched in 2017, with the company making the ambitious claim that “the majority” of its fleet would be autonomous by 2021.
That goal didn’t pan out, but the company invested heavily in engineers and researchers with staff spread across bases in the US, UK and Germany.
The deal ends Lyft’s aspirations to build self-driving cars and is a familiar refrain in the ride-hailing industry. Last year its chief rival Uber sold off its self-drive division to start-up Aurora.
Autonomous car research and development is a costly and time consuming business. For ride-hailing companies, the prospect of self-driving vehicles in their fleets is an alluring one but the long-term investment is a major hit to balance sheets.
Cutting the expensive division from the company will help in narrowing Lyft’s losses. The company lost $1.8bn in 2021.
For Toyota, it’s picking up a large workforce specialising in autonomous vehicles. The Japanese carmaker hasn’t made many public announcements about its own self-driving efforts beyond some test vehicles, but it invested $400m in autonomous driving start-up Pony.ai last year.
It is also developing ‘Woven City’ just outside Toyko, where it plans to test autonomous vehicles for transport, deliveries and mobile shops.
“The Woven Planet team, alongside the team of researchers at Toyota Research Institute, have already established a centre of excellence for software development, automated driving and advanced safety technology within the Toyota Group,” James Kuffner, CEO of Toyota’s Woven Planet, said.
The deal is expected to close in the third quarter of this year and leaves China’s Didi Chuxing as the one major ride-hailing company developing its own autonomous car fleets. Russian internet giant Yandex, which has taxi and delivery services as part of its business, has invested heavily in self-driving cars as well.