Fewer than six months after Uber offloaded its self-driving tech development unit, Lyft is ditching its own too.
Lyft is selling its self-driving unit to Woven Planet, a subsidiary of Toyota, in a cash deal worth $550 million, both companies announced on Monday afternoon.
The deal, which constitutes $200 million upfront and the rest over the next five years, takes Lyft’s self-driving tech development expenses off its ledgers and also locks in Woven Planet to a partnership that will see the subsidiary using Lyft’s platform to commercialise and manage its future robotaxi services.
The acquisition will see Lyft’s existing autonomous vehicle development team, known as Level 5, move under Woven Planet Holdings’ umbrella; Lyft’s own consumer-experience and fleet management team focused on AV will stay in-house, rebranding from Lyft Open Platform to Lyft Autonomous.
“Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this partnership will help pull in our profitability timeline,” said Lyft co-founder and president John Zimmer in a statement, adding that the deal, if closed on the planned timeframe, would get the company on a better track towards profitability.
That’s serious business for Lyft, as well as Uber — both of which have seen ridesharing suffer during the pandemic, for obvious reasons. Both companies have been throwing cash bonuses at drivers to get them back on the road, as driver numbers dropped hugely during the multiple peaks of the pandemic. And both companies scored a huge win last year with the passage of Proposition 22 in California — which kept the balance of power firmly on the companies’ side rather than on that of workers. If that vote had gone the other way, and inspired a domino effect of gig worker labor organizing across more markets, the potential for human drivers to become a significantly bigger expense possibly could have shifted corporate priorities towards autonomous vehicle development rather than away from them.
While there are pilot robotaxi programs already in operation, including Lyft’s own partnership with Hyundai-Aptiv venture Motional, and the idea of driverless riding has become a bit more palatable in our newly germaphobic society, Lyft and Uber are betting that they’re better off dumping expensive R&D units while locking in platform partnerships with their new buyers.