Uber tapped into the transportation zeitgeist and made billions providing a rideshare service. Actually, that’s not entirely accurate. Uber generated $50 billion in revenue last year, but still couldn’t turn a profit. Despite consistently running in the red, Uber plans to go public with an IPO in May. Pundits predict the valuation to be $75 billion plus.
Toyota isn’t bothered by Uber’s balance sheet. In fact, they’re betting on the company. Big time. Right before Uber plans to go public, the Japanese automaker announced a billion dollar investment into Uber Advanced Technologies Group(ATG), specifically to “accelerate the development and commercialization of automated ridesharing services.” The money actually breaks down this way: $667 million from Toyota and its supplier Denso with SoftBank Vision Fund kicking in $333 million. Toyota also has $300 million set aside over the next three years to cover costs related to the project.
This isn’t Toyota and Uber’s first dance. Last year Toyota ponied up $500 million with the plan to build self-driving Toyota Sienna minivans to put into commercial use for ride-sharing by 2021. The idea was to leverage Uber ATG’s self-driving tech with Toyota’s Guardian active-safety technology.
With this new cash injection from Toyota, Uber intends to research and develop the hardware needed for autonomous cars while starting mass production and commercialization of self-driving rideshare vehicles. The irony bears pointing out that Uber started out in 2009 as a rideshare company in San Francisco, providing jobs to people by essentially allowing them to turn their own cars into taxis. Moving forward Uber has made no bones about its intention to take driver’s out of the equation with autonomous vehicles.
It’s The Technology
In a short time, Uber has made the smart pivot into a technology company. Toyota has recognized Uber’s strong position with its public name recognition and technological know how in smoothly operating an interconnected network through an app. With its automotive expertise, Toyota not only brings a nice fistfull of cash to the table, but a wealth of knowledge to help Uber in reaching the goal of making autonomous ridesharing a reality.