Late on Monday, Lyft Inc., the San Francisco, California-based smaller ride-hailing rival of Uber Technologies, alongside the world’s second-largest carmaker by market valuation, Toyota Motor Corp., had issued a joint statement saying that the US-based ridesharing startup Lyft Inc., which had yet to report a profit, would sell off its autonomous driving technology unit to Japanese automotive giant Toyota Motor Corp for a stark upsum of $550 million, an unprecedented deal bolted out of the blues which might just enable Lyft Inc.
to report a profit a quarter earlier than previously forecasted. Nevertheless, Lyft Inc.’s latest divestiture of its autonomous driving technology unit, which might have helped the N. American ride-hailing service provider shrug off a risky burden which had yet to enter into the mainstream, would provide Toyota Motor Corp a full-fledged access to the US-based ridesharing company’s 300 employees who had been deployed on developing autonomous driving technology.
Japan’s Toyota acquires Lyft Inc.’s self-driving technology unit
Besides, under the financial terms of the deal, Lyft Inc. would receive an upfront payment of $200 million, while the Californian ride-sharing company would receive the remaining $350 million over a period of five years.
More importantly, although Lyft Inc. had not revealed how it would invest the fresh capital including a $200 million in upfront payment, several analysts were quoted saying that the divestiture would enable Lyft Inc. to report a third-quarter profit on an adjusted basis excluding taxation, interests, depreciation and amortization while cancelling out money-draining side businesses and assisting Lyft Inc.
to focus more on its core aspects. Meanwhile, since the deal would provide Toyota Motor Corp with an active presence in Silicon Valley and London with prospects of further expansion of its smart-city project “Woven City” being built at the base of Mount Fuji in Japan, Woven Plant Chief Executive James Kuffner said following the announcement, “This is the first step of establishing and bringing together the people.
Obviously building technology and product requires people, and that's much what this acquisition is about. ”