AUSTIN/TOKYO — Toyota will acquire Lyft’s self-driving technology unit for $550 million, the companies said, as the Japanese automaker steps up its automation ambitions with its newly created Woven Planet division.
Woven Planet will take over the 300-plus employees of Lyft’s so-called Level 5 division. The acquisition will provide Toyota access to the U.S. ride-hailing company’s advanced autonomous driving technology.
Jody Kelman, Lyft’s director of product and program management for the self-driving platform, will stay at Lyft, joining its two dozen or so product managers and engineers in San Francisco focused on making the company’s platform accessible and ready to work with all self-driving cars.
The acquisition will give Toyota a direct presence in Silicon Valley and London and expand the Woven City smart-city project at the base of Japan’s Mount Fuji, effectively helping it ride through dramatic changes expected in the mobility industry and major centers, Woven Planet CEO James Kuffner told reporters on Tuesday.
Toyota set up Woven Planet in January to develop connected-vehicle, autonomous and semi-autonomous driving technology. After the addition of the Lyft staffers, Woven Planet will consist of about 1,200 employees.
Kuffner said Woven Planet intends to continue investing and expanding the team, although he did not comment about any timeline or future acquisition plans.
Lyft said it had reached agreements with Woven Planet to share data that could help further the automated vehicles the unit is aiming to develop. Along with Lyft’s engineers and data scientists, Woven Planet will get access to mapping, route and other data from Lyft, as well as information from the high-powered sensors that are on Lyft’s fleet of more than 10,000 cars that it rents to drivers.
Lyft has logged more than 100,000 paid autonomous trips on its platform, mostly in Las Vegas through its partnership with Motional, a joint venture between Hyundai and Aptiv.
The company said the deal with Woven Planet is non-exclusive and that it remains committed to existing partners including Google’s Waymo, and is on track to hit a 2023 goal of allowing customers to use its app to hail driverless cars.
Toyota currently offers Level 2 automation with advanced driver assistance technology. The automaker has other self-driving projects and has been working closely with ride hailing companies. It owns a stake in China’s top ride-hailing firm Didi Chuxing and Southeast Asia’s Grab and also had a stake in the self-driving unit of Lyft’s larger rival Uber Technologies Inc., but transferred the stake when Uber sold the unit in December to car startup Aurora.
Toyota said in February it would develop and build autonomous minivans for ride-hailing networks with Aurora and longtime supplier partner Denso.
The sale will enable Lyft to become profitable sooner and takes away the burden and risk of developing a costly technology that has yet to enter the mainstream. It will allow Lyft to report third-quarter profit on an adjusted basis of earnings before interest, taxes, depreciation and amortization as long as the company continues to recover from the coronavirus pandemic, it said.
It will also remove $100 million in annual net operating costs, Lyft said.
Lyft will now focus on what it can do best with autonomous vehicles by offering services such as routing, consumer interface and managing, and maintaining and cleaning partners’ autonomous vehicle fleets, which could mean added revenue, it said.
Lyft allows consumers to book rides in self-driving vehicles in select cities in partnerships with Waymo and Motional. But the company also believes human ride-hail drivers will remain important for the foreseeable future to serve customers during peak demand periods, bad weather, or in areas that self-driving cars are unable to navigate.
Bloomberg contributed to this report.