Make way for ‘AutonoMaaS’ transport, say Toyota and Uber, as they announce a $500 million tie-up. Should Tesla also go the partnership route? Chris Middleton reports.
Japanese car giant Toyota is investing $500 million in frictionless transport provider Uber, in a bid to accelerate the progress of autonomous ride-sharing, the companies announced last night.
The investment values Uber at $72 billion, up from $62 billion in May.
The companies also announced that they are extending their technology collaboration with the aim of bringing to market autonomous mobility as a service (‘AutonoMaaS’) at scale.
Technology from each company will be integrated into purpose-built Toyota vehicles, based on its Sienna minivans, deployed on Uber’s ride-sharing network. The companies plan to pilot the scheme in 2021.
Uber and Toyota anticipate that the mass-produced vehicles will be owned and operated by autonomous-fleet operators.
“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, Toyota executive VP, and president of the Toyota Connected Company.
“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.”
A new safety focus
The deal suggests that Uber plans to focus on safety in the run-up to IPO next year. Rival Lyft is also planning to go public next year.
“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,” said Uber CEO, Dara Khosrowshahi.
“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.”
One of the contributing causes of March’s fatal crash involving an autonomous Uber test car was that the safety features of the modified Volvo had been disengaged by Uber’s technology.
Uber’s Autonomous Driving System and the Toyota Guardian automated safety support system will both be integrated into the AutonoMaaS vehicles, said the companies last night. Toyota will also deploy its Mobility Services Platform (MSPF), its core information infrastructure for connected vehicles.
“Uber’s automated driving system and Toyota’s Guardian system will independently monitor the vehicle environment and real-time situation, enhancing overall vehicle safety for both the automated driver and the vehicle,” explained Toyota Research Institute CEO, Dr Gill Pratt.
“We look forward to this partnership accelerating both companies’ development and deployment of automated driving technology.”
Plus: Tesla stays public – Apple to step in?
In related news, Tesla’s embattled founder and CEO Elon Musk has announced that the company is staying public, suggesting that he has backed away from a financially advantageous, but brand-damaging deal with one of the world’s top two oil producers, Saudi Arabia, to take the company private.
At least one Wall Street analyst has suggested that Apple should take a sizeable investment stake in Tesla – a partnership that would make sense for both parties, given their shared commitment to integrated design and technology.
Apple would benefit in terms of its autonomous and connected car programme, which has lacked direction and presence, while Tesla would gain from a stable financial environment backed by trillion-dollar Apple, together with improvements in its core technology.
However, it would also be a tie-up between two of the world’s most single-minded operators. Long-term instability could result from one of the world’s most volatile CEOs finding his hands tied by one of its most controlling companies.
If such a deal went ahead, Musk could be kicked out of Tesla’s driving seat – or installed at the head of Apple’s driverless car programme.
Internet of Business says
The $500 million Toyota/Uber partnership reinforces the fact that the journey towards autonomous, on-demand transport is a shared one between sector experts, and that any company that attempts to go it alone may be over-stretching themselves – as Tesla’s struggles reveal.
In June, Toyota invested twice the amount, $1 billion, in Southeast Asian Uber-rival Grab – a company in which Uber has 27.5 percent stake, although that deal is currently under threat from the Singapore market regulator.
In recent weeks, Uber has been extending its presence in Africa, the Middle East, and South America. However, the company reported an adjusted EBITDA loss of $404 million last quarter on revenues that were nearly 50 percent up.
Sequential losses have persuaded some investors to call for Uber to sell off of its self-driving car unit, which has contributed 15-30 percent of the company’s total losses each quarter. The Toyota deal signals that Uber has no intention of doing that.
Uber announced in July that it was closing its driverless truck division to focus on cars.
Plus: Uber says get on your bike
In further related news, Uber CEO Khosrowshahi has been talking up electric bikes’ advantages over cars in crowded cities.
“During rush hour, it is very inefficient for a one-tonne hulk of metal to take one person 10 blocks,” he told the FT. “We’re able to shape behaviour in a way that’s a win for the user. It’s a win for the city. Short-term financially, maybe it’s not a win for us, but strategically long term we think that is exactly where we want to head.”
Uber acquired bike-sharing company JUMP in April.