The Japanese automaker Toyota is expanding its alliance with Uber Technologies Inc.through a new investment worth $500 million, the companies announced on Monday. The investment is part of Toyota’s plan to integrate Uber’s self-driving tech in its Sienna minivans for use in Uber’s ride-hailing network, they plan on starting real-world testing in 2021.
The deal values the ride-hailing giant Uber at $72 billion. Last year, the Uber division spent about $750 million on self-driving car development before making cuts this year. In the second quarter, Uber’s revenue rose 63% to $2.8 billion from a year earlier, while its loss narrowed by 16% to $891 million.
Since 2015, we’ve been working to bring safe, reliable self-driving technology to the Uber network. We knew we couldn’t do it alone, which is why we continue to partner with world-class vehicle manufacturers to make our vision a reality, Eric Meyhofer, head of Uber’s Advanced Technologies Group wrote on the company’s blog.
Toyota announced at CES in January that it is working with Amazon, ride-hailing companies Uber and Didi, automaker Mazda and Pizza Hut to develop an electric autonomous shuttle that can be used to deliver people or packages.
The deal with Toyota raises Uber’s paper valuation by 15 percent from the last investment and matches the value of shares given to Alphabet Inc.’s Waymo after Uber settled a lawsuit over self-driving cars. Uber has developed a three-pronged self-driving strategy. For one, Uber purchased Volvos, retrofitted the cars with its self-driving technology and operates the fleet on its own. In another, Daimler AG will own and operate its own self-driving cars on Uber’s network. And the deal with Toyota becomes a third pillar, where Uber licenses its technology, Bloomberg Reports.
— TicToc by Bloomberg (@tictoc) August 27, 2018
For ride-sharing concerns like Uber and Lyft Inc., autonomous vehicles could cut their biggest expense: paying human drivers. For auto makers such as Toyota, the potential of self-driving cars to power car-sharing services represents a major challenge to an industry dominated by individual car ownership.
Toyota has stuck with Uber since its initial investment in 2016. Toyota Financial Services Corp. has been providing incentives to Uber drivers to purchase the company’s vehicles. Toyota is also trying to sell Uber fleet-management services based on the rapidly expanding volume of data it’s collecting from connected cars.