Lyft announces sale of its self-driving car unit to Toyota

By Hope Hill |

In a deal worth $550 million, ride sharing firm, Lyft announces sale of its self-driving car unit, Level 5 to Toyota’s subsidiary, Woven Planet. Holdings Inc. As per sources familiar with the matter, Lyft and Toyota, under the deal, will work collaboratively on enhancement of automated driving technology.

The deal will reportedly initiate with a payout of $200 million followed by additional payments of $350 million over five years.

John Zimmer, Co-founder and President, Lyft, cited that the pact would also help in pulling Lyft’s profitability timeline. The company expects that the transaction would save Lyft $100 million of annual non-GAAP operating expenses. Zimmer further added that Lyft is expecting profitability in Q3 on an adjusted EBITDA basis provided that the deal closes under the targeted timeline that is the third quarter and the recovery from the COVID-19 pandemic continues.

According to reliable sources, the self-driving division of Lyft will continue to operate in Palo Alto. Woven Planet after the addition of 300 staff members from Lyft will approximately be a 1200 employee firm. Toyota’s Woven Planet, as a part of the deal, will also get access to route, mapping and other data from Lyft. The firm will receive information from high powered sensors on Lyft’s fleet comprising more than 10,000 cars.

Lyft’s move comes a few months after Uber Technologies Inc, US based ride hailing firm and prominent rival of Lyft, sold its self-driving unit, Advanced Technologies Group, to Aurora Innovation. Aurora is allegedly backed by Amazon, Hyundai and major venture firms such as Sequoia and Greylock. The transaction was valued at $4 billion.

The ride-hailing industry has been largely hit by the COVID-19 pandemic. With strict lockdowns globally, the percentage of riders has seen a considerable drop. The moves by Lyft and Uber can be cited as a strategy to save heavy costs on the research and development of self-driving technology, which was once anticipated to become mainstream and change the course of the ride-sharing market.



Source Credits:

https://www.cnbc.com/2021/04/26/lyft-set-to-sell-self-driving-car-unit-to-a-subsidiary-of-toyota.html

https://www.bloombergquint.com/business/lyft-to-sell-autonomous-driving-unit-in-550-million-deal

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