Toyota Teams Up With Uber For Self-driving Car Partnership
Toyota Motors Corp. (NYSE: TM) has announced that it is making a $500 million investment in Uber and that the two companies will partner to pursue self-driving vehicles. Both companies have said they consider self-driving technology crucial to their futures. The Japanese automaker and the ride-hailing app company plan to launch their self-driving car pilot by 2021.
Under the terms of the partnership, engineers will incorporate technology from both companies into Toyota Sienna minivans. The technology will facilitate deployment on Uber’s network and use Toyota’s “Autono-MaaS” platform, standing for “autonomous mobility as a service.” The minivans will also be equipped with Toyota’s Guardian safety software.
According to a statement from Toyota, the vehicles will be “owned and operated by mutually agreed upon third-party autonomous fleet operators.” Shigeki Tomoyama, executive vice president of Toyota Motor, said “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.”
While Uber’s initial plan was to develop its own driverless technology and operate its own fleet of autonomous vehicles, the company is clearly shifting away from that strategy. Uber CEO Dara Khosrowshahi said in a statement, “The deal is the first of its kind for Uber, and signals our commitment to bringing world-class technologies to the Uber network. Our goal is to deploy the world’s safest self-driving cars on the Uber network, and this agreement is another significant step towards making that a reality.” Khosrowshahi became chief executive of Uber last year.
Toyota’s $500 million investment values Uber, one of the world’s most valuable privately held companies, at $72 billion. At the end of the first quarter, a self-reported tender offer gave Uber a stated valuation of $62 billion. The company reportedly lost $659 million last quarter.
The deal between Toyota and Uber is just the latest in a series of partnerships between traditional automakers and tech companies on self-driving technology. General Motors has made a considerable investment in Lyft, Uber’s biggest rival. Fiat Chrysler has formed a partnership with Google car company Waymo, which says it will soon begin offering rides to consumers.