The two companies have announced they are extending their collaboration with an aim of bringing autonomous ride-sharing vehicles to market.

By Daniel Herborn

Posted on August 28, 2018

The collaboration will also see purpose-built Toyota cars for Uber’s extensive ride-sharing network. The US $500 million investment is separate to the development of these vehicles.

The deal values Uber at more than US$70 billion despite some recent setbacks.

“Combining efforts with Uber, one of the predominant global ride-sharing and automated driving R&D companies, could further advance future mobility,” said Shigeki Tomoyama, Executive Vice-President, TMC and President of Toyota Connected Company in a statement released on 27 August local time.

“This 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 that includes Toyota vehicles and technologies.”

Uber CEO Dara Khosrowshahi on the partnership

The two companies aim to leverage economies of scale in mass-production of the vehicles with Toyota Sienna Minivans being the first to be produced. The two companies intend for the vehicles to be owned and operated by a third party. The new fleet will incorporate Uber’s Autonomous Driving System and the Toyota Guardian safety system with the latter carrying out real-time monitoring of the environment for safety purposes.

The partnership will also draw on Toyota’s Mobility Services Platform (MSPF), a proprietary system which allows for connected vehicle applications.

The pilot version of the program is expected to be rolled out by 2021.

“The deal is the first of its kind for Uber, and signals our commitment to bringing world-class technologies to the Uber network,” said Uber CEO Dara Khosrowshahi.

“Our goal is to deploy the world’s safest self-driving cars on the Uber network, and this agreement is another significant step towards making that a reality. Uber’s advanced technology and Toyota’s commitment to safety and its renowned manufacturing prowess make this partnership a natural fit. I look forward to seeing what our teams accomplish together.”

Uber trailing Waymo in the autonomous car sector

The partnership will be crucial for both companies to make up ground on autonomous cars after the Alphabet-owned competitor Waymo powered ahead. Uber’s plans to introduce self-driving cars hit a snag in March 2018 when one of its autonomous cars ran over a woman in Arizona.

Anthony Foxx, who had served as Secretary of Transportation under Obama, said the fatality was a “wake up call” for the industry.

Uber also had to pay US$245 million in a settlement with Waymo after the latter accused Uber of stealing its technology.

In allowing the two companies to share R&D costs, the partnership could allow them to gain a foothold in a market projected to include some 33 million vehicles by 2040. Industry analysts have predicted autonomous ride-sharing will seriously erode private ownership of vehicles.

Another major automobile manufacturer, General Motors, previously acquired a share of ride-sharing service and Uber competitor Lyft with a view to moving into the automated ride-hailing market.

Photo credit: Toyota UK