Lyft Divests Autonomous Vehicle Unit to Toyota’s Woven Planet

Ride-hailing service Lyft has completed the sale of its autonomous vehicle division to Woven Planet Holdings, a subsidiary of Toyota, for a sum of $550 million. This transaction highlights the substantial costs and extended development timelines associated with bringing self-driving technology to market.

Acquisition Details and Financial Implications

The agreement, revealed on Tuesday, involves the integration of Lyft’s Level 5 division into Woven Planet Holdings. Lyft is set to receive $550 million in cash, with an initial payment of $200 million already disbursed. The remaining $350 million will be paid out over a period of five years.

Approximately 300 employees from the Lyft Level 5 team will transition to Woven Planet. This team, which once comprised over 400 individuals across locations in the U.S., Munich, and London, will continue its operations from its Palo Alto, California facility.

End of an Era for Lyft’s Self-Driving Efforts

The completion of this deal, anticipated in the third quarter of 2021, marks the official conclusion of Lyft’s four-year endeavor to independently develop a self-driving system.

This divestiture is projected to reduce Lyft’s annual operating expenses by $100 million. Lyft’s co-founder and president, John Zimmer, emphasized the importance of these savings in achieving profitability.

Focus on Fleet Management and Robotaxi Networks

Lyft intends to concentrate its resources on becoming the leading ride-hailing network and fleet management platform for commercial robotaxi services. The company already maintains partnerships with autonomous vehicle developers, including Motional (a joint venture between Hyundai and Aptiv) and Waymo.

As part of the acquisition, Woven Planet has entered into commercial agreements to utilize the Lyft platform and leverage its fleet data.

Continued Partnerships and Existing Programs

Lyft has confirmed that its agreement with Woven Planet is non-exclusive, and its collaboration with Motional will continue. The partnership between Motional and Lyft, initiated over three years ago, began as a pilot program offering autonomous rides in Las Vegas during the 2018 CES tech show.

This program, which always includes a human safety driver, has been extended and remains active. As of February 2020, the program had facilitated over 100,000 paid rides in Aptiv’s – now Motional’s – self-driving vehicles through the Lyft application.

Motional plans to launch fully driverless robotaxi services in major U.S. cities in 2023, utilizing the Lyft ride-hailing network.

Lyft’s Organizational Restructuring

Lyft is implementing organizational changes to align with its renewed focus. A team dedicated to the consumer experience of autonomous vehicle hailing and riding, led by Jody Kelman, will be integrated into the company’s fleet division.

This fleet division, managed by Cal Lankton and founded in 2019, oversees more than 10,000 vehicles through rental and express drive programs and is also driving Lyft’s transition to a 100% electric vehicle network by 2030.

Woven Planet’s Expanded Team and Strategic Vision

Woven Planet will consolidate the Level 5 workforce with researchers from Toyota Research Institute and existing Woven Planet personnel, creating a unified team of approximately 1,200 employees.

The acquisition of Level 5 is intended to accelerate the development and safety of automated driving technology, without impacting Toyota’s existing partnerships, such as its collaboration with AV startup Aurora.

Woven Planet Holdings: A Growing Ecosystem

Woven Planet Holdings is a relatively new entity that has quickly established itself as a significant player in the autonomous vehicle space. It encompasses Toyota Research Institute – Advanced Development Inc. (TRI-AD), the investment arm Woven Capital, and Woven City, a testing ground for innovative technologies.

Toyota initiated construction of Woven City at the Higashi-Fuji site in Susono City, Japan, at the base of Mount Fuji, in February.

Earlier in the year, Woven Capital launched its $800 million strategic fund with an initial investment in autonomous delivery vehicle company Nuro.