Ride-hailing giant Lyft is selling its autonomous vehicle division to a subsidiary of Toyota for $550 million.
Media reports have confirmed that Toyota’s Woven Plant Holdings subsidiary will acquire Lyft’s ‘Level 5’ self-driving division for $550 million in cash. Of this, $200 million will be provided to Lyft up front while the remaining $350 million will be paid out to the company over the coming five years.
The deal is expected to close in the third quarter of 2021 and will end Lyft’s four-year pursuit of autonomous vehicles. Lyft says the sale will result in annual savings of $100 million of non-GAAP expenses, placing it in a better position to ultimately earn a profit, The Verge reports. Lyft now expects to become profitable on an adjusted basis before interest, taxes, depreciation, and amortization in the third quarter.
Read Also: Uber Is Selling Its Self-Driving Unit To Aurora Innovation
Toyota has been a key player in the race towards self-driving vehicles. In 2018, the Japanese car manufacturer invested roughly $500 million in Uber as part of a deal to co-develop autonomous vehicles. Fast forward to late 2020 and Uber decided to off-load its self-driving technology unit to Aurora Innovation. It has since been confirmed that Aurora will partner with Toyota and supplier Denso Corp to develop vehicles for autonomous ride-hailing networks.
According to a Lyft executive, this deal exemplifies the changing self-driving technology space where car manufacturers are now developing the underlying technology while tech companies are being used to connect carmakers to riders on already-established ride-hailing fleets.
