Lyft is selling its self-driving car unit for $550 million

Lyft Inc. announced today that it’s selling its self-driving car unit Level 5 to Woven Planet, a subsidiary of Toyota Motor Co.

$200 million will be paid upfront while the rest of the cash will be paid over a period of five years. The deal follows in the tracks of Uber Technologies Inc., which sold its own self-driving unit, the Advanced Technologies Group, to Amazon.com Inc.-backed autonomous vehicle startup Aurora Innovation Inc. in December last year.

According to analysts at Cowen, who spoke with management at Lyft shortly after the deal was announced, the company no longer believed it needed to develop the technology in-house and it was time to hand over the reins in what is an expensive area of development.

“They fielded interest from several companies, but believe Toyota’s market-leading position and vision around autonomous vehicle were a good fit,” said Cowen. The deal includes multi-year non-exclusive commercial agreements which will mean Woven Planet will be able to work with Lyft’s data as a means to improve safety.

“This acquisition assembles a dream team of world-class engineers and scientists to deliver safe mobility technology for the world,” James Kuffner, Chief Executive of Woven Planet said in a statement. “The Woven Planet team, alongside the team of researchers at Toyota Research Institute, have already established a center of excellence for software development, automated driving, and advanced safety technology within the Toyota Group.”

Lyft said that now it will make some changes to the structure of its organization, with its Open Platform team becoming Lyft Autonomous team. Like Open Platform, the former will focus on the deployment and scaling of third-party self-driving technology on the Lyft network.

“Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this partnership will help pull in our profitability timeline,” Lyft Co-Founder and President John Zimmer said. “Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.”

Source: siliconangle.com