Toyota Motor is going to invest $500 million in Uber Technologies Inc to jointly collaborate on developing self-driving cars, the companies stated on Monday, a bid by both to catch up to competitors in the hotly competitive autonomous driving business.
Toyota, one of the world’s largest automakers, and Uber, the leading ride-hailing service, are broadly observed as lagging the rivalry in developing self-driving cars.
Their deal deepens a present relationship and shows CEO Dara Khosrowshahi’s plan of Uber developing autonomous vehicles through partnerships, rather than on its own.
The deal also breathes new life into Uber’s self-driving business. Since a self-driving Uber SUV killed a pedestrian in Tempe, Arizona, in March, Uber has eliminated its robot vehicles from the road, laid off hundreds of test drivers and shuttered operations in Arizona, its autonomous testing hub.
The investment evaluates Uber at $72 billion, matching the valuation Uber got in a deal with Alphabet Inc self-driving unit Waymo this year.
Uber will combine its autonomous driving system with Toyota’s Guardian technology, which provides automated safety functions such as lane-keeping but does not allow a vehicle to drive completely autonomously.
The combined technology will be constructed into Toyota’s Sienna minivans, to be deployed on Uber’s ride-hailing network beginning in 2021, Uber stated.
The companies’ aim is to fix the enormously challenging concern of how to mass produce self-driving vehicles for shared fleets, consisting of ride-hailing services.