Toyota to invest $500 million in Uber for self-driving cars

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Japanese automaker Toyota Motor Corp will invest 500 million US dollars in ride-hail giant Uber to jointly work on developing self-driving cars, a source familiar with the matter said on Monday.

The deal exhibits Toyota's desperation to tackle growing competition in the autonomous driving business, while Uber aims at reinvigorating its strategy following a deadly crash in March that forced the company to shutter its self-driving car hub in Arizona.

The partnership deepens an existing relationship and reflects Uber CEO Dara Khosrowshahi's approach of developing autonomous vehicles through partnerships, rather than on its own.

The investment values Uber at 72 billion US dollars, matching the valuation the company received in a trade settlement deal with Alphabet Inc self-driving unit Waymo this year.

Uber will combine its autonomous driving system with Toyota’s Guardian technology, which offers automated safety features such as lane-keeping but does not enable a vehicle to drive completely on its own. The combined technology will be built into Toyota’s Sienna minivans, to be deployed on Uber’s ride-hailing network starting in 2021, the source said.

An unidentified third party will own and operate the fleet, the source added. Both companies aim to solve the enormously challenging problem of how to mass produce self-driving cars.

Toyota was not immediately available for comment while Uber declined to react on the reports.

Visitors look at car models on the Toyota stand during the 88th Geneva International Motor Show in Geneva, Switzerland, March 7, 2018. /Reuters Photo

Toyota has been less aggressive than some rivals on moving toward full-fledged autonomous driving. It has expressed caution about the technology and focused on partial autonomous systems like Guardian. But Toyota has already made investments in research and development of self-driving cars, the auto giant reportedly plans to begin testing self-driving electric cars around 2020.

Uber has admitted its technology lags Waymo, and the crash in Arizona was a further setback in development and testing.

Uber co-founder and former CEO Travis Kalanick had insisted on developing a proprietary self-driving system and called autonomous cars “existential” to Uber. The self-driving unit is a significant contributor to Uber’s losses, which in the second quarter were 891 million US dollars.

Previously, Uber and Toyota partnered on an electric mobility project. Two years ago, Toyota invested an undisclosed sum in Uber and the two companies partnered on a car-leasing program for Uber drivers. Uber has since halted its US leasing business.

Source(s): Reuters