Toyota Motor Corp. is expanding an alliance with Uber Technologies Inc. through a new investment and a plan to get self-driving cars on the road, a person familiar with the matter said.
The Japanese automaker will invest about $500 million in a deal that will value the ride-hailing company at $72 billion, said the person, who asked not to be identified because the details are supposed to be private. As part of the pact, Toyota will manufacture Sienna minivans equipped with Uber’s self-driving technology, and another company will operate the fleet, the person said. They have yet to identify the third partner.
Spokesmen for Uber and Toyota declined to comment. The Wall Street Journal reported the investment earlier Monday, and details of the driverless-car partnership haven’t been previously reported.
Dara Khosrowshahi, Uber’s chief executive, 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’s share price has seen more ups and downs than that of a typical privately held company.
The deal with Toyota raises Uber’s paper valuation by 15% from the last investment and matches the value of shares given to Alphabet Inc.’s Waymo after Uber settled a lawsuit over self-driving cars. A group of investors valued Uber at $62 billion earlier this year.
Uber has developed a three-pronged self-driving strategy. For one, Uber bought 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’s network. And the deal with Toyota becomes a third pillar, with Uber licensing its technology.
Public road testing with Uber’s self-driving Volvos is still on hold after one of its vehicles killed a pedestrian in Tempe, Ariz., in March. Uber had deactivated Volvo’s automatic braking system in that vehicle, which raised questions about safety. The incident tainted the company’s expensive self-driving car program, giving automakers another reason to worry about working with Uber.
Nonetheless, Toyota has stuck with Uber since its initial investment in 2016. Toyota Financial Services Corp. has been providing incentives to Uber drivers to buy Toyota vehicles. As with traditional rental companies such as Avis Budget Group Inc., Toyota is also trying to sell Uber fleet-management services based on the rapidly expanding volume of data it’s collecting from connected cars. These services include being able to monitor whether a car is being properly maintained or driven too aggressively.