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Toyota to invest US$500m in Uber for self-drive vehicles
TOYOTA Motor Corp will invest US$500 million in Uber Technologies Inc to jointly work on developing self-driving cars, the companies said on Monday, in a bid by both to catch up to rivals in the hotly competitive autonomous-driving business.
Toyota, one of the world's largest car-makers, and Uber , the leading ride-hailing service, are widely seen as lagging the competition in developing self-driving cars.
Their deal deepens an existing relationship and reflects chief executive officer Dara Khosrowshahi's strategy 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 Arizona in March, Uber has removed its robot cars from the road, laid off test drivers and shut its Arizona autonomous testing hub.
The investment values Uber at US$76 billion, a step up from the US$72 billion valuation Uber received 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 offers automated safety features such as lane-keeping, but does not enable a vehicle to drive completely autonomously. The combined technology will be built into Toyota's Sienna minivans, to be deployed on Uber's ride-hailing network from 2021, Uber said. The companies' aim is to solve the challenge of how to mass-produce self-driving cars for shared fleets, including ride-hailing services.
Jeff Miller, Uber's head of business development for strategic initiatives, said the partnership "really paints the picture of how we envision deploying autonomous technology in the long term." This includes licensing its autonomous technology to car-makers and enlisting a third party to own and maintain the fleet.
The third party that will operate the Toyota autonomous fleet has not yet been chosen, he said.
For the Japanese auto-maker, the "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, which includes Toyota vehicles and technologies," its executive vice-president Shigeki Tomoyama said in a statement.
Toyota has been less aggressive than some rivals on moving toward full-fledged autonomous driving, expressing caution about the technology and focusing on partial autonomous systems like Guardian.
But it has invested in research and plans to begin testing self-driving electric cars around 2020. A Toyota official said the company would continue its research into self-driving technology, and that it would not combine its research efforts with Uber.
Uber has admitted its technology lags Waymo, and the crash in Arizona was a further setback in development and testing.
The Toyota partnership puts pressure on Uber to resume testing on public roads, but the company has run up against regulators and politicians with safety concerns. Mr Miller said Uber plans to have autonomous cars back on public streets by the end of the year.
Mr Khosrowshahi, who took over Uber a year ago, has recently explored options that include more partnerships as well as a potential sale of the self-driving business, separate sources have told Reuters.
The self-driving unit is a significant contributor to Uber's losses, which hit US$891 million in the second quarter. Uber has a deal to buy cars from Volvo, outfit them with Uber's technology and maintain them, a more labour-intensive project than the Toyota plans.
Mr Khosrowshahi's partnership strategy is a shift. Uber co-founder and former CEO Travis Kalanick had insisted on developing a proprietary self-driving system and called autonomous cars "existential" to Uber. REUTERS