Toyota Investing $500 Million Into Uber for Driverless Partnership
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.
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