Toyota splash out $500 million on Lyft’s driverless car technology
A $550 million purchase from Lyft is Toyota’s latest attempt to stay competitive in the automotive industry. Lyft started developing its self-driving unit in order to match the upward trend in driverless travel. However, they have left that for now, focusing on other goals.
Lyft is a company that allows users to hire vehicles, rent motorbikes and share bicycles. They are widespread in America and Canada and are the second-largest ride-sharing company, after uber, with a 30% market share.
Despite progress made with driverless technology, it has not taken off as predicted thus far, with Lyft president John Zimmer predicting in 2016 that by 2021, the majority of Lyft travel will be with driverless cars. And four months into this year, it seems unlikely his prediction will come true. This poses the question of whether or not Toyota have been too premature with their purchase as it seems the wider market is just not ready yet for driverless vehicles in huge numbers.
Lyft has followed Uber's footsteps, which also decided to ditch the driverless car for now, after a 1200 person effort to build one was not deemed worth it. They even paid their rival Aurora $400 million to buy their business operation, although Uber does still hold a share. Interestingly, Toyota have a share in Aurora and have plans to help them with the rollout of their driverless car, suggesting each business believes in collaboration as the way forward to promote the driverless car.
The multi-million dollar purchase is under Toyota’s new investment branch called Woven Planet Holdings, fuelled by Toyota’s environmental motive to create a “happier planet”. With continuous investment in “clean” technologies throughout the pandemic, their path of sustainability is clearly defined. Toyota will pay $200 million to Lyft to acquire the 300 person unit, with the further $350 million being paid within the next five years. The division will have overall around 1200 engineers and scientists, named by Toyota as the “dream team”.
This is their most ambitious self-driving unit to date, being dubbed a “level 5” unit. This means the car has autonomous control, with the ability to navigate the car regardless of weather conditions or geographic location. Recently a Lexus was launched at “level 2”, meaning features include the ability to change lanes. The Japanese company had planned the launch of a “level 4” van, which would be completely driverless and used for operations for the 2020 Tokyo Olympic games. However, unsurprisingly the pandemic put this on hold.
It seems though that Toyota is as ambitious as ever and are keen to expand a driverless car market, despite the fact that ride-share companies – Lyft and Uber have put on any development on hold, at least for now.
Lyft chief executive Logan Green has said that the company will adapt to the driverless market by using third party technology instead of focusing on the production of the technology itself. This seems like a sensible move that carries less risk. Despite years in the making, driverless technology has not received the buzz many predicted. With the future unclear on whether or not this new method of transportation will take off or not, only time will tell if Toyota’s $550 million deal was worth it.