Toyota subsidiary Woven Planet has acquired the self-driving division of Lyft, Level 5. The acquisition includes commercial agreements between Lyft and Woven Planet to accelerate development and safety of self-driving technology.

The Level 5 team will join Woven Planet, a Toyota subsidiary focussed on development of autonomous driving and other mobility technologies. As part of agreements between the two firms, Lyft systems and fleet data will be used by Woven Planet in its development of self driving technology.

Lyft’s Open Platform team, which focuses on deployment and scaling of third-party self-driving technology on the Lyft network, will become the new Lyft Autonomous team. 

Lyft will receive, in total, approximately $550 million in cash, with $200 million paid upfront subject to certain closing adjustments and $350 million of payments over a five-year period. The transaction is expected to remove $100 million of annualized non-GAAP operating expenses on a net basis – primarily from reduced R&D spend – accelerating Lyft’s path to Adjusted EBITDA profitability.

“Today’s announcement launches Lyft into the next phase of an incredible journey to bring our mission to life,” Lyft Co-Founder and CEO Logan Green said. “Lyft has spent nine years building a transportation network that is uniquely capable of scaling AVs. This partnership between Woven Planet and Lyft represents a major step forward for autonomous vehicle technology.”

“This acquisition assembles a dream team of world-class engineers and scientists to deliver safe mobility technology for the world,” James Kuffner, CEO of Woven Planet said. “The Woven Planet team, alongside the team of researchers at Toyota Research Institute, have already established a centre of excellence for software development, automated driving, and advanced safety technology within the Toyota Group. I am absolutely thrilled to welcome Level 5’s world-class engineers and experts into our company, which will greatly strengthen our efforts.”

“We are excited about the transformative impact AVs will have on our world as we drive toward a future that is electric, autonomous and shared,” Green said. “With Lyft Autonomous, we can combine the power of Lyft’s hybrid network, marketplace engine and fleet management capabilities to help our AV partners scale deployment with the highest revenue per mile at the lowest cost per mile. We look forward to continuing to partner with the best autonomous vehicle companies to bring this technology to market.”

“Not only will this transaction allow Lyft to focus on advancing our leading Autonomous platform and transportation network, this partnership will help pull in our profitability timeline,” Lyft Co-Founder and President John Zimmer said. “Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve Adjusted EBITDA profitability in the third quarter of this year.”