Lyft announced Monday that it's sold off Level 5, its self-driving car division, to Toyota subsidiary Woven Planet in a deal valued at $550 million. Woven Planet says the acquisition will expand the number of people it has working on self-driving technology to approximately 1,200 and expand the company's footprint beyond its Tokyo headquarters to Palo Alto and London.
The deal is structured so that $200 million is paid up front, with the remaining $350 million paid over the course of a five-year period. The end result for Lyft is a removal of $100 million in annualized non-GAAP operating expenses on a net basis as the ride-hailing company continues its trek toward profitability, which the company said could happen by Q3 of 2021 during an earnings call in February 2021. The deal also includes non-exclusive commercial arrangements between Lyft and Woven Planet aimed at improving safety and commercialization of autonomous vehicles via data-sharing.
Lyft says the that the transaction is expected to close in the third quarter of 2021, pending regulatory approvals.