Toyota Motor Corp. will invest $500 million in Uber to jointly work on developing self-driving cars, a source familiar with the matter said on Monday, a bid by both companies to catch up to rivals in the hotly competitive autonomous driving businesses.
Toyota, one of the world’s largest carmakers and Uber, the leading rideshare service, are widely seen as lagging the competition in developing self-driving cars. The partnership deepens an existing relationship between Uber Technologies Inc. and Toyota, and reflects Uber CEO Dara Khosrowshahi’s strategy of developing autonomous vehicles through partnerships.
It also breathes some life back into Uber’s self-driving business unit that has dramatically retrenched since a fatal crash in Tempe, Arizona, in March, when a self-driving Uber SUV killed a pedestrian. Since that accident, Uber removed its self-driving cars from the road and shuttered its operations in Arizona, its autonomous testing hub.
The investment values Uber at $72 billion, which matches the valuation Uber received in a deal with Alphabet Inc. (GOOGL.O) self-driving unit Waymo earlier this year.
Uber will combine its autonomous driving system with Toyota’s Guardian system, an automated system that offers some safety features but does not allow a vehicle to drive completely autonomously, the source said. The technology will be built into Toyota vehicles, which will be deployed on Uber’s ride-hailing network, the source said.
Toyota was not immediately available for comment. Uber declined to comment.
Toyota, unlike some of its rivals, has been more reluctant to jump into full-fledged autonomous driving, focusing instead on partial autonomous systems like Guardian.
Carmakers, tech companies and other service providers have frequently chosen to partner on self-driving projects over past two years, due to the difficulty and high cost of developing such technology alone.
Since the crash in Tempe, Khosrowshahi has been exploring various possibilities for Uber’s future in self-driving, including more partnerships as well as a potential sale of the business, separate sources have told Reuters.
The strategy is a shift from Uber co-founder and former CEO Travis Kalanick, who had insisted the company develop a proprietary self-driving system and called autonomous cars “existential” to Uber.
The Wall Street Journal reported on the deal earlier.
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