Business Markets

At a $72 Billion valuation, Toyota set to invest $500 million in Uber Technologies Inc.

Toyota invests $500 million in Uber

In a bid to catch up with its rivals in the highly competitive autonomous driving business, Toyota announced that it is all set to invest $500 million in Uber Technologies Inc.

Earlier On Monday, 27th August, both companies announced that they would work together on developing self-driving cars.

Notably, both Uber, the leading ride-hailing service, and Toyota, known as one of the world’s largest automaker have been trailing in the competition of developing self-driving cars.

Along with showing chief executive Dara Khosrowshahi’s strategy of Uber developing autonomous vehicles through partnerships, and not on its own, this deal also deepens an already existing relationship.

Through this deal, Uber’s self-driving business has also been reignited. As back in March, when a self-driving Uber SUV was responsible for a pedestrian’s death in Tempe, Arizona, Uber had no choice but to withdraw its robot cars from the road.

The company also had to call off hundreds of test drivers and had to shut operations in Arizona, its autonomous testing hub.

According to this investment deal, it values Uber at $72 billion, matching Alphabet Inc’s valuation of Uber’s self-driving unit Waymo earlier this year.

As per reports, Uber plans of combining its autonomous driving system with Toyota’s Guardian technology, which offers automated safety features like lane-keeping, although no vehicle is authorized to drive completely autonomously.

As per a statement given by Uber,  The combined technology will be produced into Toyota’s Sienna minivans, and then be deployed on Uber’s ride-hailing network and will be unveiled in 2021.

As per reports, one of the main aims of the companies is to solve the hugely challenging problem of how to mass produce self-driving cars for shared fleets, and also for ride-hailing services.

Speaking on the partnership, the head of business development for strategic initiatives at Uber, Jeff Miller, said: “ it really lays down the blueprint in terms of how we envision deploying autonomous technology in the long term.”

As part of the deal, the company will license its autonomous technology to carmakers while also enlisting a third party to own and maintain the fleet.

However, Mr. Miller went on to say that, the company has yet not chosen the third party that will operate the Toyota autonomous fleet.

Commenting on the announcement, Shigeki Tomoyama, executive vice president of Toyota said, “this investment and agreement denotes an important milestone in our transformation to a mobility company as we aim to provide a way for a safe and secure expansion of mobility services, for instance, ride-sharing inclusive of Toyota vehicles and technologies.”