Toyota will invest $500 million in Uber in a deal that values the ride-hail giant at $72 billion, according to The Wall Street Journal. As part of the agreement, the two companies will work jointly on developing self-driving cars. That’s a slightly higher valuation for Uber than what it got last December when Japan’s Softbank acquired a 20 percent stake in the ride-hailing business.
The news comes as Uber has been scaling back its in-house self-driving car project in the wake of a fatal crash last March in Tempe, Arizona. A self-driving Uber vehicle struck and killed a 49-year-old woman as she was crossing the street. Spokespersons for Uber and Toyota did not immediately respond to a request for comment.
This isn’t the first time Toyota has invested in Uber. Back in 2016, the Japanese automaker announced it was forming a “strategic partnership” with the San Francisco-based company, in which Uber drivers can lease their vehicles from Toyota and cover their payments through earnings generated as Uber drivers. The deal also included an investment of an undisclosed amount.
Toyota, which is the world’s largest car manufacturer, is taking self-driving technology very seriously. It recently established the Toyota Research Institute to develop AI technologies in two main areas: autonomous cars and robot helpers for around the home. Earlier this year, the automaker announced plans to build a gigantic, 60-acre facility in Michigan to test “edge case” driving scenarios with its autonomous vehicles that are too dangerous to perform on public roads. Toyota also plans to invest $2.8 billion in a new software company it created in order to develop software systems that can power fully self-driving vehicles.
Uber has another partnership with Volvo to use the Swedish automaker’s SUVs for its self-driving technology. Following the crash in Tempe, it was revealed that Uber had disabled the automatic emergency braking in the vehicle. Federal investigators determined that had it been engaged, the feature likely would have prevented the crash.
Update August 28th, 9:01AM ET: Uber CEO Dara Khosrowshahi tweeted about the deal late Monday evening.
The ride-hailing company also released details about the agreement, most of which had been previously reported. Uber says it will retrofit a fleet of Toyota Sienna minivans with its proprietary self-driving technology, but the vehicles won’t be owned and operated by either company. Rather an unidentified third-party will take on the laborious task of managing the fleet of self-driving vehicles, said Eric Meyhofer, head of Uber’s self-driving unit, in a statement.
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.
Today, we’re taking our relationship with Toyota Motor Corporation to new heights—and while this isn’t our first automotive partnership, we’re taking a new approach. As part of this partnership, we’ll supply our proprietary self-driving system to Toyota Sienna Minivans. Rather than owning and operating the fleet of self-driving vehicles, these minivans will be owned and operated by an agreed upon third party, a new business model for Uber.
Our expanded partnership with Toyota signals our commitment to deploying self-driving technology at scale for our riders around the globe. We look forward to making progress in the years ahead with another strong parter by our side.