Lyft self-driving vehicles are coming sooner rather than later.
The popular ride-hailing company announced on Wednesday a significant new partnership with Magna, one of the largest automotive parts supplier in North America, that will see the two businesses co-funding and co-developing Lyft’s own first self-driving system. The system will eventually be deployed in Lyft cars at an undisclosed date sometime in the future, and Magna can deploy the technologies it develops with Lyft it its own product lines as it sees fit.
As part of the partnership, Magna will also invest $200 million in Lyft in equity. To date, Lyft has raised more than $4 billion in capital from numerous backers, including Rakuten, CapitalG, UTA Ventures, and Janus Capital Group. The ride-hailing service recently disclosed drivers now give over 10 million rides a week, and 2017 revenues surpassed $1 billion for the first time.
Uber already has several self-driving related partnerships with automakers like Ford and GM, as well as software makers, including one with Aptiv, which involves deploying Aptiv’s self-driving technologies in select vehicles in select markets such as Las Vegas and Boston. At CES 2018 back in January, I took one self-driving Lyft for a spin. The result was decidedly anticlimactic — there were no hiccups or noticeable bugs — which is probably the best case scenario when it comes to self-driving technology.
While it’s unclear at this time what will happen to all of those Lyft partnerships, it’s not unreasonable to expect that most will eventually give way as Lyft prioritizes its own self-driving system efforts.
During Lyft’s press event on Wednesday, Lyft CEO and co-founder Logan Green emphasized the partnership with Magna will allow Lyft to enter the next chapter in its trajectory as a rapidly-growing ride-hailing company. Although Lyft still primarily relies on human drivers, the eventual transition to self-driving cars will unlock a slew of financial benefits in the longer-term even if research and develop costs will likely soar in the short-term.
Lyft is likely expecting cost-savings not just for its bottom line but also for passengers, who can expect cheaper rides, as a result. It’s unclear at this time, however, what exactly those cost savings for passengers will look like.
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