Lyft will sell its self-driving car unit to Woven Planet, a subsidiary of Toyota, for $ 550 million in cash, the companies said on Monday.
Lyft shares rose more than 2% after hours.
As part of the deal, Lyft and Woven Planet will work together to improve the safety of automated driving technology, according to a statement.
“Not only will this transaction allow Lyft to focus on advancing our autonomous platform and leading transportation network, this partnership will help improve our time frame for profitability,” said the co-founder and president of Lyft, John Zimmer, in a statement.
The company expects the deal to remove $ 100 million in annualized non-GAAP operating expenses on a net basis, the statement said. Because of this, Zimmer added that if the deal goes through as planned in the third quarter and the pandemic resumes, Lyft expects to become profitable on an adjusted EBITDA basis in the third quarter.
The announcement comes just months after Lyft rival Uber sold its own autonomous driving unit to start-up Aurora, backed by companies such as Hyundai and Amazon. The deal valued the unit at around $ 4 billion and included a $ 400 million investment by Uber in Aurora.
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