Lyft Inc. is selling its self-driving division to a unit of Toyota Motor Corp. for $550 million, a move the ride-hailing behemoth stated that it will support it in turning a profit sooner than previously anticipated.
Woven Planet Holdings, a Toyota subsidiary focused on autonomous technology, will pay $200 million up front as part of the deal, Lyft stated on Monday. The remaining $350 million will be paid in cash over a five-year period.
Lyft’s departure from building self-driving cars follows rival Uber Technologies Inc.’s decision to shed its autonomous-driving division late last year. The money-losing companies maintained their business during the coronavirus pandemic and pledged to cut back on expensive ventures as the health crisis suppressed their core rides operations.
Lyft stated that the sale would help it save $100 million in operating expenses, accelerating its path to gainfulness. The company stated that it now expects to become profitable on a fixed basis before interest, taxes, depreciation and amortization in the third quarter. Previously, it expected to reach that milestone in the fourth quarter, alongside Uber.