Lyft Inc. is selling its self-driving division to a unit of Toyota Motor Corp. for $550 million, a move the ride-hailing giant said will help it turn a profit sooner than recently anticipated.
Woven Planet Holdings, a Toyota auxiliary zeroed in on self-ruling technology, will pay $200 million in advance as a feature of the deal, Lyft said Monday. The remaining $350 million will be paid in real money over a five-year-period.
Lyft’s takeoff from building self-driving cars follows rival Uber Technologies Inc’s. choice to shed its autonomous-driving division before the end of last year. The money losing companies redesignd their businesses during the Covid pandemic and swore to scale back on costly ventures as the wellbeing emergency squashed their center rides operations.
Lyft said the deal would help it save $100 million in operating expenses, accelerating its way to profitability. The company said it currently hopes to become profitable on a adjusted basis before interest, taxes, depreciation and amortization in the third quarter. Already, it expected to arrive at that achievement in the fourth quarter, close by Uber.
Lyft’s offers rose almost 3% in night-time trading Monday.
Both companies spent huge to venture into regions past ride-hailing lately, powered by financial backers who supported their wide-running desire. However, eagerness disappeared as they amassed billions in misfortunes en route. The pandemic dealt the last blow, forcing the organizations to shed costly new bets.
In 2018, Toyota put about $500 million in Uber as a feature of an arrangement for the organizations to work mutually on autonomous-vehicle development. Startup Aurora Innovation Inc. purchased Uber’s autonomous-technology unit in December and after several months it was banding together with Toyota and provider Denso Corp. to create vehicles for self-sufficient ride-hailing networks.
A Lyft executive said the business was becoming realistic: letting car makers develop the basic technology, while tech organizations help interface them to riders. The leader said Lyft will cut out a group of around 20 workers who strike such associations and send self-driving vehicles across its organization later on. Woven will acquire the 300 representatives who worked at Lyft’s self-driving unit. Along these lines, the executive said, “you let everyone do what they do best.”
The deal is relied upon to shut in the third quarter, subject to regulatory approvals.