Toyota Acquires Autonomous Car Division of Lyft for $550 Million in Landmark Business Deal

By Thomas Price Tuesday, April 27, 2021

With rapid advances in technology in the automobile industry, car company Toyota has made a major play to stay at the forefront of the business. In an effort to push autonomous car technology, Toyota has acquired the driverless tech division of rideshare company Lyft. The new deal will be a major push for the Woven Plant subsidiary of Toyota, which focuses specifically on innovation and technology for the car company. Toyota and Lyft have also made several commercial agreements alongside the acquisition deal for other system and data arrangements.

Lyft Level 5 headquarters in Silicon Valley.

Business Deal Details

Toyota is set to take on all portions of Lyft’s autonomous car division, Level 5, through its new $550 million acquisition. The rideshare company will then shift its focus away from developmental technology. The agreement has been structured into two different parts. Toyota will pay $200 million upfront and the remaining $350 million over the next five years.

The company will be making this deal through its subsidiary Woven Planet. Woven Planet was launched by Toyota in January specifically to invest in groundbreaking technologies such as autonomous cars, practical robotics, and other ventures.

Woven Planet and Lyft have also made commercial agreements for the utilization of the rideshare company system and fleet data. This agreement will allow the company to ramp up safety features and commercialize its autonomous car technology much faster.

The acquisition of Level 5 by Toyota is part of the large-scale modernization effort that the business is currently undergoing. With massive pushes to electrify its entire fleet in the coming years, the car company has been investing in new technologies to maintain its place as the largest and most successful automaker in the world.

Benefit to Lyft and Other Details

Another reason for the business deal comes from Lyft’s desire to increase liquidity. After taking on significant losses in 2020 due to the COVID-19 pandemic, Lyft has aggressively been changing strategies in order to expedite company recovery. In the company’s most recent quarterly report, Lyft saw a rise in revenue after several months of deep losses. The multimillion-dollar sale of the autonomous car portion of the business will help provide some much-needed revenue for the company.

Lyft did not see immediate commercial viability in its autonomous car technology, so selling the tech to Toyota was a necessary business step in economic recovery for the rideshare company.

When commenting on the recent acquisition, CEO of Woven Planet James Kuffner said, “This acquisition advances our mission to develop the safest mobility in the world at scale. The Woven Planet team, alongside the team of researchers at TRI, have already established a center of excellence for software development and technology in the Toyota Group. Bringing Level 5’s world-class engineers and experts into the fold—as well as additional technology resources—will allow us to have even greater speed and impact. This deal will be key in weaving together the people, resources, and infrastructure that will help us to transform the world we live in through mobility technologies that can bring about a happier, safer future for us all.”

Final Conclusions

Smart cities represent a radical change from the way things are right now. However, that is not to suggest that the means or the technology to make them happen is far away. As the necessity to create less dependent and more sustainable societies continues to grow, smart cities are a major way to maintain a certain level of urban lifestyle while doing it. The various forecasts and predictions the report offers over the next 20 years shows really how open the door is to new change within this period of time. In fact, it would not be surprising and looks to be likely to see hundreds of smart cities begin to pop up over these years.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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