Toyota Investing $500 million in Uber to Develop Driverless Cars
Uber's struggling self-driving program is about to get some new life, thanks to a $500 million investment from Japan's Toyota Motor Corp. On Monday, Reuters reported that Toyota and Uber will work together on the development of self-driving cars, citing sources familiar with the matter. The equity investment will help advance both Toyota and Uber's autonomous driving technology.
Uber will combine its autonomous driving system with Toyota's Guardian technology, which offers advanced safety features but does not enable a vehicle to drive autonomously without human oversight. The combined technology will be built into Toyota's Sienna minivans, to be deployed on Uber's ride-hailing network starting in 2021, the source said.
Toyota has lagged behind other automakers in developing driverless technology, while Uber's self-driving car program stalled when one of the company's self-driving Volvos fatally struck a pedestrian in Arizona. The incident led Uber to suspend its autonomous testing and shutter its Arizona testing operations.
Uber declined to comment on the announcement.
Khosrowshahi is exploring ways to reach profitability as the company mulls a planned 2019 IPO. Under the vision of its new CEO, The ride-hailing company is exploring autonomous cars, electric scooter and bike rentals, as well as mass transit options to become a complete transportation platform.
Since taking over as CEO last year, part of Dara Khosrowshahi's strategy is developing autonomous vehicles with an established industry partner, rather than trying to develop driverless technology in-house. Khosrowshahi has even explored a potential sale of the self-driving business, separate sources have told Reuters.
Uber was testing its autonomous technology with a fleet of modified Volvo XC90's
Alphabet's self-driving arm Waymo has a similar deal with Chrysler and Jaguar. Fiat Chrysler is supplying Pacifica minivans that Waymo outfits with its autonomous technology for a planned commercial ride-hailing service. Waymo also plans to use a fleet of Jaguar's new I-PACE luxury electric SUVs.
Unlike other automakers, Toyota has been less aggressive in developing autonomous driving technology. The automaker expressed caution about the technology and focused on partial autonomous systems like Guardian, an automated driving system which acts as a safety net for the human driver to help prevent an accident.
Uber had planned to launch its own autonomous ride-hailing service before Waymo and was testing autonomous pickups in Arizona, Pittsburgh, and for a short time San Francisco. However, since the accident in Arizona, Uber has admitted its autonomous technology is far behind Waymo's, and the crash in Arizona was a major setback.
Khosrowshahi's partnership strategy is a shift. Uber co-founder and former CEO Travis Kalanick had insisted on developing a proprietary self-driving system and called autonomous cars "existential" to Uber's survival.
The investment by Toyota values Uber at $72 billion.
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