'COVID-19 Impact' Lyft Sells Autonomous Driving Division to Toyota

Full-Scale Business Restructuring to Strengthen Profitability

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The U.S. ride-sharing company Lyft is selling its autonomous vehicle business to Toyota. Following Uber, Lyft's sale of its autonomous driving division has led to observations that ride-sharing companies, which suffered revenue losses due to COVID-19, are restructuring their businesses to strengthen profitability.

According to Bloomberg on the 26th (local time), Lyft is selling its autonomous driving technology division, Level 5, to Woven Planet Holdings, a subsidiary of Toyota. The sale is valued at $550 million (approximately 610 billion KRW). John Zimmer, co-founder and CEO of Lyft, stated, "This deal is expected to enable us to achieve operating profitability by the third quarter, which is our stated goal."

Toyota plans to take over all 300 employees of Lyft's autonomous driving division. As a result, the number of employees at Toyota's Woven Planet Holdings will increase to a total of 1,200. Additionally, Toyota will receive various autonomous driving map data accumulated by Lyft over time.

A representative from Woven Planet said, "This acquisition will contribute to our company leading autonomous driving technology."

This restructuring by Lyft comes amid a significant decline in profitability for ride-sharing companies due to reduced foot traffic caused by social distancing measures following the COVID-19 pandemic last year. In particular, unlike competitor Uber, which also operates a food delivery service, Lyft only runs a ride-sharing business, making its revenue impact from COVID-19 relatively greater.

In fact, Lyft's annual revenue last year was $2.4 billion, down more than 30% from the previous year's $3.6 billion, and it recorded a total loss of $1.8 billion.

As costs for autonomous vehicle technology research continued to rise under these circumstances, Lyft appears to have ultimately sold off the related business division. Earlier, Uber also sold its autonomous driving division to the U.S. autonomous driving software startup Aurora Innovation in December last year. At that time, Uber's decision to sell its autonomous driving division was also reportedly driven by the goal of improving profitability.

Meanwhile, since 2018, Lyft has been conducting pilot autonomous taxi operations in Las Vegas in cooperation with Motional, a joint venture between Hyundai Motor Company and U.S. company Aptiv specializing in autonomous driving technology. It is reported that over 100,000 customers have used this service to date. According to Lyft, the partnership with Motional will continue with the goal of commercializing autonomous taxi services in major U.S. regions by 2023.

This content was produced with the assistance of AI translation services.