Toyota Invests $500 Million in Uber to Get Self-Driving Cars

Enterprise Television- Toyota Invests $500 Million in Uber to Get Self-Driving Cars

Toyota Motors is investing $500 million more in Uber Technologies, underscoring the Japanese automaker’s efforts to catch up on self-driving technology as General Motors and Alphabet’s Waymo lead the race to overturn transportation with autonomous vehicles.

With this announcement made on Tuesday, Toyota plans to manufacture Sienna minivans loaded with Uber’s software, with testing slated to begin on Uber’s ride-sharing network in 2021.

According to a source familiar with the matter, Toyota’s stake is set to value the ride-hailing company at $72 billion.

The 81-year-old manufacturing giant is accelerating a push to transform into a mobility-services provider, with Chief Executive Officer Akio Toyoda warning that a once-a-century paradigm shift in the industry has become a life-or-death battle for traditional automakers.

Uber isn’t Toyota’s only investment in a ride-sharing company — it poured $1 billion into Southeast Asia’s Grab Holdings Inc. earlier this year and has a partnership with China’s Didi Chuxing Inc. Toyota is also a backer of Japan Taxi, an Uber rival run by the chairman of Tokyo’s biggest taxi operator.

Carmakers and technology companies alike are working toward a future where autonomous robo-taxis will lessen the need for car ownership.

The Toyota City-based company, which initially bought a small stake in Uber in 2016, is spreading its bets far and wide for a shot at these nascent technologies, which are threatening to challenge the traditional model of making and selling cars to individuals.

One of the major backers of the three big ride-hailing companies – Uber, Didi and Grab – is SoftBank Group Corp., the Japanese internet giant.

SoftBank’s founder, Masayoshi Son, has poured as much as $9.5 billion into Didi, led a $9.3 billion investment in Uber and also has stakes in Grab and India’s Ola. SoftBank’s Vision Fund is also an investor in GM’s Cruise autonomous-car unit and Manbang Group, China’s Uber-like truck-rental company.

Uber and Didi are also partnering Toyota in the carmaker’s vision for a fleet of autonomous, modular boxes on wheels that can be customised to transport anything from people to pizza.

CEO Eiji Toyoda unveiled the concept, dubbed e-Palette, at CES in Las Vegas in January. Amazon.com Inc. and Pizza Hut also signed on.

For Uber, the deal with Toyota raises its valuation and matches the value of shares given to Waymo after Uber settled a lawsuit over self-driving cars. A group of investors had valued Uber at $62 billion earlier this year.

Head of Uber’s Advanced Technologies Group, Eric Meyhofer noted “Since 2015, we’ve been working to bring safe, reliable self-driving technology to the Uber network. We knew we couldn’t do it alone, which is why we continue to partner with world-class vehicle manufacturers to make our vision a reality.”

In a separate partnership around self-driving vehicle development outlined in January, a Toyota spokesman said Uber wouldn’t turn off the automaker’s built-in safety features, including radar and other sensors that help to anticipate what other vehicles and pedestrians are doing in a wide space around the vehicle.

Uber has developed a three-pronged self-driving strategy. For one, Uber purchased Volvos, retrofitted the cars with its self-driving technology and operates the fleet on its own. In another, Daimler AG will own and operate its own self-driving cars on Uber’s network. And the deal with Toyota becomes a third pillar, where Uber licenses its technology.

Dara Khosrowshahi, Uber’s chief executive officer, is looking to stabilize the company after a rocky year of corporate scandals and the death of a pedestrian struck by an Uber self-driving car.

Over that time, the company’s share price has seen more ups and downs than a typical privately held company.

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