Lyft sells stand-alone unit to Toyota for $ 550 million

Lyft is abandoning Level 5, its in-house autonomous vehicle development team. The company announced Monday he plans to sell the division to Toyota for $ 550 million. In turn, the Japanese manufacturer will integrate the team into its subsidiary Woven Planet. Toyota will pay Lyft $ 200 million upfront for the division and an additional $ 350 million over five years to complete the transaction. Both companies say they expect the deal to close in the third quarter of this year.

And Lyft isn’t shy about its reasons for selling Level 5. Provided the deal goes through, the company expects its R&D spending to drop sharply as a result, a milestone as the business is trying to become profitable. “Assuming the transaction is completed on schedule and the COVID recovery continues, we are confident that we can achieve adjusted EBITDA profitability in the third quarter of this year,” said John Zimmer, co-founder and president of Lyft.

With today’s announcement, Lyft is after Uber effectively leaving the self-driving car industry to other companies. Lyft had been working on the tech since 2017, and although it didn’t have the same prominent lapels like Uber, it is under the same pressure to become profitable as quickly as possible.

A significant angle to today’s announcement is that Toyota is work with Aurora, the company that bought Uber’s advanced technology group last year to develop self-driving taxis. By the end of 2021, they plan to start testing self-driving vans, with the goal of launching them on Uber and other ridesharing networks in the next few years.

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