Toyota Motor Corp. is investing $500 million more in Uber Technologies Inc, underscoring the Japanese automaker\u2019s efforts to catch up on self-driving technology as General Motors Co and Alphabet Inc\u2019s Waymo lead the race to upend transportation with autonomous vehicles.<\/p>\n
As part of the accord announced Tuesday, Toyota plans to manufacture Sienna minivans loaded with Uber\u2019s software, with testing slated to begin on Uber\u2019s ride-sharing network in 2021. Toyota\u2019s stake is set to value the ride-hailing company at $72 billion, according to a person familiar with the matter, who asked not to be identified because the details are private.<\/p>\n
The 81-year-old manufacturing giant is accelerating a push to transform into a mobility-services provider, with Chief Executive Officer Akio Toyoda warning that a once-a-century paradigm shift in the industry has become a life-or-death battle for traditional automakers.<\/p>\n
Uber isn\u2019t Toyota\u2019s only investment in a ride-sharing company – it poured $1 billion into Southeast Asia\u2019s Grab Holdings Inc earlier this year and has a partnership with China\u2019s Didi Chuxing Inc.<\/p>\n
Toyota is also a backer of Japan Taxi, an Uber rival run by the chairman of Tokyo\u2019s biggest taxi operator.<\/p>\n
Carmakers and technology companies alike are working toward a future where autonomous robo-taxis will lessen the need for car ownership. The Toyota City-based company, which initially bought a small stake in Uber in 2016, is spreading its bets far and wide for a shot at these nascent technologies, which are threatening to challenge the traditional model of making and selling cars to individuals.<\/p>\n
Who\u2019s Winning the Self-Driving Car Race?<\/strong><\/p>\n One of the major backers of the three big ride-hailing companies – Uber, Didi and Grab – is SoftBank Group Corp., the Japanese internet giant. SoftBank\u2019s founder, Masayoshi Son, has poured as much as $9.5 billion into Didi, led a $9.3 billion investment in Uber and also has stakes in Grab and India\u2019s Ola.<\/p>\n SoftBank\u2019s Vision Fund is also an investor in GM\u2019s Cruise autonomous-car unit and Manbang Group, China\u2019s Uber-like truck-rental company.<\/p>\n Technology companies need automakers to bring these disruptive ideas to fruition. Carmakers bring two advantages: knowledge of how to build a car and the factories to do it. What they lack is the legions of software engineers that technology companies possess.<\/p>\n Valuation Gains<\/strong><\/p>\n Uber and Didi are also partnering Toyota in the carmaker\u2019s vision for a fleet of autonomous, modular boxes on wheels that can be customized to transport anything from people to pizza. CEO Toyoda unveiled the concept, dubbed e-Palette, at CES in Las Vegas in January. Amazon.com Inc and Pizza Hut also signed on.<\/p>\n For Uber, the deal with Toyota raises its valuation and matches the value of shares given to Waymo after Uber settled a lawsuit over self-driving cars. A group of investors had valued Uber at $62 billion earlier this year.<\/p>\n \u201cSince 2015, we\u2019ve been working to bring safe, reliable self-driving technology to the Uber network,\u201d Eric Meyhofer, head of Uber\u2019s Advanced Technologies Group, wrote in a blog post Monday afternoon.<\/p>\n \u201cWe knew we couldn\u2019t do it alone, which is why we continue to partner with world-class vehicle manufacturers to make our vision a reality.\u201d<\/p>\n Uber and Toyota expect that the mass-produced autonomous vehicles will be owned and operated by a third-party company they mutually agree on, according to the carmaker. Toyota has continued to stick with Uber since its initial investment. Toyota Financial Services Corp has been providing incentives to Uber drivers to purchase the company\u2019s vehicles.<\/p>\n As with traditional rental companies like Avis Budget Group Inc, Toyota is also trying to sell Uber fleet-management services based on the rapidly expanding volume of data it\u2019s collecting from connected cars.<\/p>\n These services include being able to monitor whether a car is being properly maintained or driven too aggressively.<\/p>\n In a separate partnership around self-driving vehicle development outlined in January, a Toyota spokesman said Uber wouldn\u2019t turn off the automaker\u2019s built-in safety features, including radar and other sensors that help to anticipate what other vehicles and pedestrians are doing in a wide space around the vehicle.<\/p>\n Uber has developed a three-pronged self-driving strategy. For one, Uber purchased Volvos, retrofitted the cars with its self-driving technology and operates the fleet on its own. In another, Daimler AG will own and operate its own self-driving cars on Uber\u2019s network. And the deal with Toyota becomes a third pillar, where Uber licenses its technology.<\/p>\n Dara Khosrowshahi, Uber\u2019s chief executive officer, is looking to stabilize the company after a rocky year of corporate scandals and the death of a pedestrian struck by an Uber self-driving car. Over that time, the company\u2019s share price has seen more ups and downs than a typical privately held company.<\/p>\n Public road testing with Uber\u2019s self-driving Volvos is still on hold after one of its vehicles killed a pedestrian in Tempe, Arizona, in March. Uber had deactivated Volvo\u2019s automatic braking system in that vehicle, which raised questions about safety. The incident tainted the company\u2019s expensive self-driving car program, giving automakers another reason to worry about working with Uber.<\/p>\n
\nGiving Incentives<\/p>\n
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