In a shift in driverless strategy, Uber deepens partnership with Toyota

pulse

August 28, 2018 2:48 AM

Uber is receiving a new $500 million investment from Toyota, which would value the company at $72 billion, according to a person briefed on the deal, who was not authorized to speak publicly.

SAN FRANCISCO — Since Uber launched a self-driving car program in 2015, it has insisted on developing its own driverless technology and operating its own fleet of autonomous vehicles.

Now the ride-hailing company is starting to shift away from that own-it-all strategy.

Uber is receiving a new $500 million investment from Toyota, which would value the company at $72 billion, according to a person briefed on the deal, who was not authorized to speak publicly. With that investment, Uber plans to provide its self-driving technology to a fleet of Toyota minivans, which may be operated by the Japanese automaker or a third party, the person said.

The fleet will also be equipped with Toyota’s safety software, called Guardian, and will pick up passengers on Uber’s ride-hailing network. The companies anticipate launching a pilot program by 2021, according to a joint announcement.

“This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing that includes Toyota vehicles and technologies,” Shigeki Tomoyama, executive vice president of Toyota Motor, said in a statement. Toyota’s investment was reported earlier by the Wall Street Journal.

Since Dara Khosrowshahi became chief executive of Uber last year, the company’s self-driving program has been in a state of flux and Uber executives have been divided over whether to sell the business or keep it. Developing and operating driverless cars is expensive and Khosrowshahi has attempted to trim back costs at the company in order to take Uber public by the end of 2019. And in March, a self-driving Uber struck and killed a pedestrian in Arizona, prompting the company to halt its testing there.

But by partnering with Toyota, Khosrowshahi can keep testing Uber’s driverless technology in cars without the expense and hassle of maintaining a full fleet and owning the entire operation from top to bottom.

“I think there’s going to be very large, multibillion-dollar businesses to be built on fleet operations,” Jeff Miller, Uber’s head of business development for strategic initiatives, said in an interview.

This article originally appeared in The New York Times.