Published on : Mar 15, 2018
The market landscape of autonomous driving is multifaceted and complex dotted by alliances among a wide spectrum of stakeholders. In particular, the industry is marked by numerous ride hailing companies entering into collaborations with various automakers, original equipment manufacturers (OEMs), automotive parts suppliers, and technology startups. The players have been harping on bolstering the access to self-driving technology for consumers. To this end, Lyft, on-demand transportation company, is collaborating with Magna International Inc., a globally prominent automotive supplier, to build on autonomous vehicle technology. In addition, they will be teaming up to develop and deploy level 4 autonomous driving technology in self-driving cars, and at scale.
Under the multi-year partnership, the Canadian behemoth producing Tier 1 automotive parts, looks to invest US$200Mn into Lyft in exchange for equity, valuing the latter at $11.7bn, which includes the new funds raised. Of note, the investment forms a part of the $1 billion round of financing round spearheaded by CapitalG, financed by Alphabet Inc.
Partnership to Increase Consumers Access to Autonomous Driving Via Ride-Hailing Network
Lyft is already been active in the autonomous driving space fueled by its efforts to partner with Waymo, Ford, and General Motors. The deal will enable the Canadian-based company to further the vision of democratizing autonomous driving through go-to ride-hailing network. Furthermore, the collaboration will help bring increased autonomy into production vehicles world over. Last year in July, the company has an engineering facility in Palo Alto, a Level 5 autonomous driving tech facility, to develop its own range of self-driving technology. Magna will bring autonomous technology expertise to the facility through its engineers and will co-develop self-driving modules that can fit into cars from a wide array of automakers. The company with vast expertise in in-car technology has several multinational firms as its customers, notably BMW, Toyota, Volkswagen AG, and Tesla, Inc.
Lyft through Collaboration intends to move from Ownership to Subscriptions Model
Lyft will leverage the potential of the partnership to move from ownership to subscriptions model in the transportation industry. For instance, Lyft believes that passengers will be able to pay a fixed subscription fee instead of paying by ride time and distance.
The partnering companies haven’t disclosed a timeline by which the technologies will be market-ready. However, Magna has publicly revealed that if all goes as planned, the partnership will show results within the next few years.