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.”
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About the Author
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.