Lyft’s autonomous vehicle business has been acquired by Toyota for over half a billion dollars in its efforts to speed up and achieve its target of developing self-driving vehicles.
Announcing the $550 million acquisition, the two companies said on Tuesday that the deal will allow them to create a “dream team” of about 1,200 researchers and engineers who would be located all across the world.
Woven Planet, a newly formed subsidiary launched by Toyota in January, will be the immediate authority that will manage the combined unit. Investment in futuristic technologies, including automated driving, smart cities and robotics, will be made by the new entity.
After the completion of the deal, the Tokyo headquartered Woven Planet will e babel to expand into overseas markets and will have its offices in Silicon Valley and London.
The deal will be beneficial for the San Francisco-based Lyft as it will gain access to much needed cash to stage a turnaround from the Covid-19 pandemic hit. In 2020o, a loss of $1.8 billion was reported by the ride hailing giant. The company however has set plans to turn profitable this year itself as stated in its latest latest earnings report.
Fransua Vytautas Razvadauskas, a consultant at Euromonitor International, a market research provider, said that Lyft’s sale “indicates an increasing desire to optimize the business model and bring it closer to achieving financial profitability”.
“In the end, the lacking commercial viability of its [autonomous vehicles] division was expensive to run and was ultimately hurting the company’s financial position.”
The companies said in a joint statement that the sale of its Level 5 self-driving division will give Lyft an amount of $200 million upfront from Toyota while the rest of the deal amount will be paid over a period of five years.
Separate agreements had been signed by the two companies for eventually bringing the self-driving technology that they develop to market and for finding out a way to use such technologies with the ride-hailing system and fleet data of Lyft, over and above the acquisition deal, the companies said.
“With the acquisition of Level 5, Woven Planet is driving towards its mission to combine the innovative culture of Silicon Valley with world-renowned Japanese craftsmanship to create the mobility solutions of the future,” George Kellerman, Woven Planet’s head of investments and acquisitions, said in a statement.
“It also provides a solid foundation for international expansion and future hiring efforts in the world’s strongest talent markets.”
In recent years, heavy investment has been made by Toyota to modernize its lineup. The Japanese auto maker over took the German auto giant Volkswagen last year to regain the position of the largest auto motive company of the world in terms of sales.
A new smart city, which will offer streets “dedicated to automated driving” is alos being built by the company in Japan.
(Adapted from Indiatimes.com)