Why Toyota bought Lyft Level 5, an autonomous driving company
With the acquisition of Lyft Level 5, Toyota will look to develop collaborative technologies that will be used to commercialize various forms of automated driving. Companies can jump ahead and hit the goal of fully autonomous driving sooner than anyone else.
Lyft, a ridesharing giant, agreed to sell its autonomous vehicle research division, aptly named "Level 5" to the Toyota auto giant. Both companies said the deal would net Lyft a total of $550 million, with $200 million upfront and $350 million paid over a five-year period.
Level 5 will be officially sold to Toyota's Woven Planet division., research and advanced mobility division of the Japanese automaker. boards, the companies will focus on developing joint technologies that will be used to commercialize various forms of automated driving..
Building self-driving cars is quite a complex and time-consuming task, and Lyft has often underestimated the situation. Companies like Level 5 have realized this, and their long-term mission is to one day bring autonomous vehicles to market. With the support of Toyota as one of the most valuable automakers on the planet and the existing Woven Planet fund for audiovisual research, the mission could be completed ahead of schedule.
As for Toyota, the acquisition is about speed and safety. Toyota Research Institute scientists will work with Level 5 engineers to develop what Woven Planet CEO James Kuffner, calls "the safest mobility in the world at scale". The three teams, Woven Planet, TRI, and the 300 workers brought in from Level 5 will be grouped into one large division with approximately 1,200 employees working towards a common goal.
Toyota says that in addition to acquiring the Level 5 by Woven Planet, the two companies have signed an agreement that will use the Lyft system to help accelerate a potential profit center related to vehicle autonomy. This partnership will have the added benefit of using available fleet data to help improve safety in future automated technologies.
The Lyft logo may be pink, but this deal has turned the cab company green. In fact, the company is confident that it will turn a profit in the third quarter thanks to the de-budgeting of a high-priced Tier XNUMX unit and additional gains from the acquisition. It's worth noting that Uber pulled off something similar when it sold its own offline spinoff last year.
Don't confuse this move with Lyft's abandonment of the dream of self-driving. Behind the scenes, Lyft's move is pretty well implemented: let automakers develop automated technologies and reap the rewards. The deal is also non-exclusive, meaning the company could achieve its goal of becoming an affordable network for future fleets of various brands, including its existing partners like Waymo and Hyundai.
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