Driverless car wars: Toyota injects $500m into Uber – The Wall Street Journal

JOHANNESBURG — The driverless car market is starting to heat up. Toyota is investing $500m into Uber but is seen as a laggard according to the Wall Street Journal article below. The ride haling company has been cutting investment in the driverless car division following the death of a pedestrian earlier this year. But following the investment Toyota has targeted 2020 to launch its first autonomous car. And with General Motors, Alphabet, Ford and others already playing in this market, it's sure to heat up. – Stuart Lowman ___STEADY_PAYWALL___.Toyota Investing $500 Million in Uber in Driverless-Car Pact.By Greg Bensinger and Chester Dawson(The Wall Street Journal) Toyota Motor Corp. TM 2.96% is investing about $500 million in Uber Technologies Inc. as part of an agreement by the companies to work jointly on autonomous vehicles aimed at improving safety and lowering transportation costs.Toyota's investment values Uber at about $72 billion, slightly higher than where SoftBank Group Corp. valued the ride-hailing company earlier this year with its funding, according to people familiar with the matter.Under terms of the tie-up, Uber will integrate self-driving technology into Toyota Sienna minivans for use in Uber's ride-hailing network, the companies said. The vehicles later could be owned and operated by third-party fleet managers, they added.Uber has been seeking ways to lower development costs and losses in its autonomous-vehicle unit following a fatal crash involving one of its cars earlier this year in Arizona. Last year, the Uber division spent about $750 million on self-driving car development before making cuts this year, according to people familiar with the matter. . In recent months, Uber has closed its Arizona autonomous-vehicle operations and laid off about 400 test drivers, some of whom it will rehire after undergoing new training. Uber also has taken its self-driving vehicles off the roads in the San Francisco Bay Area, Pittsburgh and Toronto while investigators look into the circumstances of the Arizona crash.For ride-sharing concerns like Uber and Lyft Inc., autonomous vehicles could cut their biggest expense: paying human drivers. For auto makers such as Toyota, the potential of self-driving cars to power car-sharing services represents a major challenge to an industry dominated by individual car ownership.Toyota's investment is reminiscent of General Motors Co.'s $500 million bet on Lyft in early 2016 as part of a plan to jointly develop autonomous vehicles. That deal marked the first time a major car maker joined forces with a ride-hailing company, and accelerated a confusing array of alliances between Detroit and Silicon Valley in a race to seize a stake in the future of personal transportation.A few months later, GM acquired startup Cruise Automation Inc., a maker of a system for retrofitting existing vehicles with autonomous-driving technology. That acquisition enabled GM to go its own way and become an able competitor to Uber, Alphabet Inc.'s Waymo and others in the effort to get driverless cars on the road.Read also: Uber says it will start testing flying taxis by 2020 – but others are already testing themAround the time of GM's Cruise acquisition, Toyota made a small investment in Uber with plans to help create a car-leasing program for potential Uber drivers as well as jointly explore other ride-hailing services, including in-car apps.SoftBank's Vision Fund, a big backer of Uber, in June bought a nearly 20% stake in GM's Cruise as the auto maker plans to launch a robot ride-hailing service next year. Months earlier, SoftBank invested $1.25 billion in Uber at a roughly $68 billion valuation, and bought shares from investors at a valuation of $48 billion, making it the largest Uber investor with a 15% stake at the time.Last month, Ford Motor Co. carved out its self-driving car program into a subsidiary known as Ford Autonomous Vehicles LLC to make it easier to attract third-party investors.Meanwhile, Fiat Chrysler Automobiles NV is providing some vehicles used by Waymo's autonomous car program and has joined with BMW Group and Intel Corp. to develop technology for a self-driving car by 2021. It expects to launch its own autonomous vehicles early next decade.Read also: Is Uber finally turning into a real business?Toyota hasn't been as quick to embrace autonomy as rivals such as GM, but moved recently to bolster its research into self-driving capabilities. It has a goal of launching an autonomous car by 2020. Earlier this year, Toyota and two affiliates earmarked nearly $3 billion to build software for such vehicles.Toyota in June said it would invest $1 billion in Southeast Asian ride-hailing company Grab Inc., valuing that startup at $10 billion. Uber had already sold its Southeast Asia business to Grab in exchange for shares to end a costly fight for market share.Toyota's Uber investment indicates how serious it has become about autonomous vehicles, said Glen De Vos, chief technology officer at automotive software supplier Aptiv PLC. "It clearly shows they recognise they've got to do something a bit different from the traditional model where you do everything in house with your established partners," he said.Read also: What will cities look like when we have driverless cars? – The Wall Street JournalShoring up Uber's costs is a priority of Chief Executive Dara Khosrowshahi, who took over the top job from Travis Kalanick nearly a year ago after months of scandal and legal setbacks. He is aiming to take Uber public next year while trying to maintain the company's growth and stem losses.In the second quarter, Uber's revenue rose 63% to $2.8 billion from a year earlier, while its loss narrowed by 16% to $891 million.Among Mr. Khosrowshahi's first big moves was to end a year-old lawsuit by Waymo over claims that Uber stole and inappropriately used trade secrets for self-driving vehicles. As part of a February agreement, Uber promised not to use Waymo's technology, while Waymo received 0.34% of Uber's equity calculated at a corporate valuation of $72 billion.Mr. Khosrowshahi also has been selling off unprofitable operations and putting a new focus on rentable bikes and scooters. Uber closed its self-driving big-rig truck unit in July that was meant to eventually feed into its shipping division, Uber Freight. The company hasn't said yet when it will return fully-autonomous passenger cars to city streets for more testing.Write to Greg Bensinger at greg.bensinger@wsj.com and Chester Dawson at chester.dawson@wsj.com

Driverless car wars: Toyota injects $500m into Uber – The Wall Street Journal

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