Toyota Investing $500 Million Into Uber for Driverless Partnership

Matt Posky
by Matt Posky

Toyota Motor Corp. is set to drop about $500 million into Uber Technologies Inc. under an agreement that will see both companies work jointly on self-driving vehicles. The ultimate goal is for Toyota to bring to market its own autonomous vehicles using some of Uber’s hardware, with direct access to its ride-sharing network.

According to the automaker, the initial push will use the Sienna minivan as a platform for the “Autono-MaaS” (autonomous-mobility as a service) fleet. This makes the arrangement sound very similar to Waymo’s deal with FCA, which allows Alphabet’s autonomous arm to use the Chrysler Pacifica as a test platform for its self-driving hardware in exchange to having improved access to autonomous technology. However, Toyota said the partnership’s primary goal is improving safety and lowering transportation costs for the public.

“Combining efforts with Uber, one of the predominant global ride-sharing and automated driving R&D companies, could further advance future mobility,” said Shigeki Tomoyama, Toyota Motor’s executive vice president and president of Toyota Connected Company. “This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing that includes Toyota vehicles and technologies.”

Uber is seeking ways to reduce development costs of late. According to rumors, the firm spent almost $750 million on self-driving car development last year, before a handful of high-profile incidents (one of which included a pedestrian fatality) slowed progress in 2018. While it’s still supposedly spending a fortune, with claims that its autonomous R&D program eats up at least $1 million per day, it has scaled back somewhat.

Meanwhile, Toyota wants to accelerate its self-driving program. While the automaker has been actively pursuing the technology, few believed it was at the same level as Ford or General Motors — despite being a larger company. Help from Uber could be what both parties need to get ahead. It’s also doubly beneficial in the short term for the ride-hailing service, as Uber is considering an initial public offering next year.

The Sienna minivan models are expected to begin trials sometime in 2021 and could be a way for Toyota to hedge its bets against a future many believe will involve unprecedentedly low levels of ownership. Assuming Uber sticks around for that hypothetical tomorrow, Toyota will already have immediate access to a major customer network and can sell its vehicles directly to the service provider.

Weirdly, Uber spent this week talking about how excited it was to focus less on cars and more on urban bike rentals and mass transit. “Short-term financially, maybe it’s not a win for us, but strategically long term we think that is exactly where we want to head,” Uber CEO Dara Khosrowshahi told the Financial Times on Monday.

The ride-sharing firm has invested in a number of bike companies over the last year. Lime, an electric scooter company, was one of the biggest, but it also has its own Jump electric bikes — now available in eight American cities, and launching soon in Europe.

[Image: Toyota]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Lou_BC Nah. Tis but a scratch. It's not as if they canceled a pickup model or SUV. Does anyone really care about one less Chevy car?
  • ToolGuy If by "sedan" we mean a long (enough) wheelbase, roomy first and second row, the right H point, prodigious torqueages, the correct balance of ride/handling for long-distance touring, large useable trunk, lush enveloping sound system, excellent seat comfort, thoughtful interior storage etc. etc. then yes we need 'more' sedans, not a lot more, just a few really nice ones.If by "sedan" we mean the twisted interpretation by the youts from ArtCenter who apparently want to sit on the pavement in a cramped F16 cockpit and punish any rear seat occupants, then no, we don't need that, very few people want that (outside of the 3 people who 'designed' it) which is why they didn't sell and got canceled.Refer to 2019 Avalon for a case study in how to kill a sedan by listening to the 'stylists' and prioritizing the wrong things.
  • Lou_BC Just build 4 sizes of pickups. Anyone who doesn't want one can buy a pickup based SUV ;)
  • Jor65756038 If GM doesn't sell a sedan, I'll buy elswhere. Not everybody likes SUV's or crossovers or is willing to buy one no matter what.
  • ToolGuy One thing is for sure: Automakers have never gone wrong following the half-baked product planning advice of automotive journalists. LOL.I wonder: Does the executive team at GM get their financial information from the Manager of Product and Consumer Insights at AutoPacific? Or do they have another source? Hmm...
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