Toyota Motor Corp. will invest $500 million in Uber Technologies Inc. to jointly work on developing autonomous vehicles aimed at improving safety and lowering transportation costs. The joint venture will help both the companies catch up to rivals in the highly competitive autonomous cars business.
Toyota, seen as one of the world’s largest carmakers, and Uber, the flagship ride-hailing service, are both lagging in developing self-driving cars.
As per the terms of the deal, Uber will integrate self-driving technology into Toyota Sienna minivans for use in Uber’s ride-hailing network. The vehicles could later be owned and operated by third-party fleet managers.
The deal reflects Uber CEO Dara Khosrowshahi’s strategy of Uber developing autonomous vehicles through joint ventures. The Toyota-Uber deal brings a new lease of life into Uber’s autonomous driving business.
Since a self-driving accident in March, Uber has removed its autonomous cars from the road, laid off hundreds of test drivers, and closed down operated in Arizona, its self-driving testing hub.
“The 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,” said Toyota’s executive vice president Shigeki Tomoyama said in a statement.
Khosrowshahi, who took over the job from Travis Kalanick a year ago after months of setbacks. Among his achievements are ending a lawsuit by Waymo over claims that Uber stole and used trade secrets for autonomous vehicles. During the second quarter, Uber’s revenue soared by 63% to $2.8 billion from a year earlier, while its loss narrowed by 16% to $891 million.
When it comes to embracing autonomous vehicles, Toyota hasn’t been quite swift. Earlier this year, Toyota announced $3 billion to build software for vehicles with self-driving capabilities. In June, it said it would invest $1 billion in Asian ride-hailing company Grab Inc., valuing the startup at nearly $10 billion.
The joint venture indicates about serious Toyota and Uber have become about autonomous vehicles.