Toyota Investing $500 Million with Uber

Toyota is making a big bet on driverless vehicles. The Japanese automaker announced Monday it would invest $500 million in ride-hailing company Uber and would work closer with the company to speed up the development as well as deployment of autonomous vehicles.

Uber is planning to retrofit Sienna minivans from Toyota with autonomous technology and start real-world testing by 2021.

This deal will give Toyota an important partner in a segment that is expanding rapidly and comes on the same day that four of the suppliers of the automaker announced partnerships to develop some software that underpins autonomous vehicles.

The president of the Toyota Connected Company Shigeki Tomoyama said through a prepared statement that the agreement and investment marked a big milestone on the company’s transformation to a mobility enterprise.

Automakers as well as tech companies are trying to position themselves for a future that will see car ownership step aside to mobility as a form of service.

This has led to an increase in partnerships as businesses such as Toyota realize they have little knowledge about ridesharing, while companies such as Uber discover how difficult it is to build a car.

Other auto and tech companies have been forging arrangements of a similar nature. Waymo buys vehicles from Jaguar Land Rover and Chrysler.

Uber is leading the world in ridesharing giving it a big edge in finding an audience for driverless vehicles. Uber could establish a market for Toyota autonomous cars through the app it has, which millions of people use.

The announcement made Monday expands on a partnership already in existence. During the January International Consumer Electronics Show, the two businesses announced a self-driving vehicle concept known as e-Palette that could be used in everything from ridesharing to pizza delivery.

Toyota’s most recent cash injection provides Uber an unreserved endorsement of its self-driving plan that was hit by a Google lawsuit and the death in March of an Arizona pedestrian.

Uber closes its efforts in research and development in Arizona last May and just recently started in the Pittsburgh streets again. It has still not started the testing of cars again.

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