Lyft to sell its autonomous driving unit to Toyota subsidiary in US$550 million deal
- Lyft will sell the unit to Woven Planet, an extension of Toyota’s research division with a mandate to advance self-driving car technology
- The sale comes as Lyft’s ride-hailing demand is rebounding after the pandemic slammed revenue by keeping would-be riders homebound
Lyft has agreed to sell its self-driving division to a subsidiary of Toyota Motor Corp, joining Uber Technologies in stepping back from the costly driverless vehicle research once thought to be on the verge of revolutionising ride-hailing.
The deal is worth US$550 million and will allow Lyft to turn an adjusted profit in the third quarter of this year, the company said Monday. Previously, Lyft was targeting profitability by the end of the year. The company estimates that selling the division will save it US$100 million in operating expenses annually.
“Assuming the transaction closes within the expected time frame and the Covid recovery continues, we are confident that we can achieve Adjusted Ebitda profitability in the third quarter of this year,” Lyft co-founder and President John Zimmer said in a prepared statement announcing the deal, which is expected to close during the third quarter.
Lyft will sell the unit, called Level 5, to Woven Planet Holdings, an extension of Toyota’s research division with a mandate to advance self-driving car technology. The deal is structured to start with a US$200 million payout followed by US$350 million in additional payments over five years.
Lyft fielded interest from “a number” of autonomous vehicle companies before selecting Toyota’s Woven Planet, Zimmer told analysts during a call. A key element in the decision to sell the unit, Zimmer said, was recognising that Lyft no longer needed to develop its own autonomous vehicle technology.
Instead, he said, multiple partnerships with other companies working on the technology would deliver the highest value to the Lyft platform.