Lyft is selling its autonomous vehicle division to Toyota, with the Japanese automaker setting up a new subsidiary, Woven Planet Holdings, to pick up the reins of the self-driving car project. Lyft established Level 5, its driverless division, back in mid-2017, and at the time had no shortage of promises for what autonomy would bring to the ride-hailing service.
The Lyft Open Platform Initiative, the company promised, would develop a combination hardware and software kit around which automakers and others could build their own driverless vehicles. It would combine hardware from established industry suppliers like cameras, radar scanners, and processors, with homegrown software educated by data funneled back from the millions of rides existing human Lyft drivers were already undertaking.
“To be clear, we aren’t thinking of our self-driving division as a side project. It’s core to our business,” Lyft’s Luc Vincent – then VP of Engineering, but currently Executive Vice President of Autonomous Technology – said at the time. “That’s why 10% of our engineers are already focused on developing self-driving technology – and we’ll continue to grow that team in the months ahead.”
Now, though, Lyft is saying goodbye to that business, and that team. Woven Planet will bring together Lyft’s Level 5 employees with researchers from Toyota Research Institute (TRI) which has also working been working on autonomous vehicles for some time now.
In return, Lyft will get around $550 million in cash, $200 million of which will be paid upfront. The remaining $350 million will be divested over a five year period. Lyft says it expects to save $100 million of annualized non-GAAP operating expenses on a net basis as a result, primarily from the cut in research & development costs.
The data pipeline concept remains, however. Woven Planet and Lyft have also inked agreements that will allow the Lyft system and fleet data to continue to be used. That will “accelerate the safety and commercialization of the automated-driving technology that Woven Planet will develop” the new Toyota subsidiary says.
Vincent will move over to Woven Planet with his Level 5 team. “As part of Woven Planet, we will be able to leverage exceptional automotive engineering expertise as well as the considerable resources of an iconic business,” he said in a statement today, “while continuing to move with the energy and speed of a start-up.” The combined team at Woven Planet will number around 1,200 people, spread across Tokyo, Japan, Palo Alto, CA, and London, UK.
For Lyft, it’s perhaps a tacit recognition that taking autonomous vehicles from proof-of-concept to production technology isn’t as easy as many predicted. Like a number of other companies have discovered, the realities of developing and deploying safe, reliable driverless vehicles have proved to be a money-pit with no large scale deployment in sight. Uber, for example, washed its hands of its autonomous vehicle division at the end of 2020, swapping it for a minority stake in Amazon and Sequoia-backed Aurora.
Meanwhile, Lyft’s app is expected to be home to autonomous ride options in the coming years. The company announced a deal with Motional and Hyundai earlier this year, which would put self-driving Ioniq 5 electric hatchbacks up for grabs among its ride possibilities. That’s being handled by the newly-formed Lyft Autonomous team, a rebranding of the Lyft Open Platform team which focuses on deployment and scaling of third-party self-driving technology on the Lyft network.