The world of self-driving cars is growing increasingly smaller as Lyft has decided to sell its autonomous vehicle division to a subsidiary of Toyota.
Woven Planet Holdings will acquire Lyft’s self-driving division for $550 million in cash. Lyft was provided $200 million up front, with the remaining $350 million being paid out over five years. Lyft says it will see an annual savings of $100 million of non-GAAP expenses, which it notes will better position the company to earn a profit.
Toyota has also agreed to use Lyft’s fleet data and platform for any commercial services it eventually launches under the Woven Planet subsidiary.
The deal is expected to close in the third quarter of 2021 and brings an end to Lyft’s four-year quest to develop its own self-driving cars. The company follows Uber in off-loading its autonomous vehicle division in a bid to stop losing so much money.
Last year, Uber sold its AV project to Aurora, a startup founded by the former head of Google’s self-driving project.
Uber’s sell-off came after a self-driving car killed a pedestrian in 2018, however, Lyft’s project was more small-scale and mostly consisted of a pilot project in Las Vegas.
Lyft launched its self-driving division, called Level 5, in 2017. The company claimed that by 2021 “a majority” of its rides would take place in autonomous vehicles. Lyft hired hundreds of engineers to staff a 50,000-square-foot facility in Palo Alto, CA. A year later, the company acquired UK-based augmented reality startup Blue Vision Labs for a reported $72 million in the hopes of accelerating its efforts.
The company’s prediction never came to fruition. Despite some technical successes, autonomous vehicles remain very far away from mass adoption. Most AVs on the road today are still test vehicles, with most of the major players refusing to commit to a timeline for commercialization.
Toyota has largely kept its self-driving car goals quiet. The Japanese company, which is the largest automaker in the world, has released some information about its test vehicle and the types of sensors it’s using, but very little of the cars in operation. Toyota was planning to offer a limited ride-hailing pilot in downtown Tokyo during the 2020 Summer Olympics, however, that project was delayed due to the Covid-19 pandemic.
Toyota recently invested $400 million in Pony.ai, a self-driving startup based in the US and China.
The company has developed a self-driving software called “Chauffeur,” as well as a second product called “Guardian,” which is an advanced driver-assist system similar to Tesla’s Autopilot. Neither is currently offered in any production car today.
Toyota Research Institute, the automaker’s Silicon Valley-based division, has been conducting tests at its Ottawa Lake, Michigan closed-course facility for several years. In 2018, Toyota agreed to invest $500 million in a joint self-driving project with Uber. That investment is now null as Aurora owns what’s left of Uber’s AV division.
In 2020, Toyota broke ground on its “Woven City,” the 175-acre site of a former car factory in Japan. The company hopes to transform it into a “prototype city of the future: where it can test autonomous vehicles, innovative street design, smart home technology, robotics, and new mobility products on a population of real people who would live there full time.