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With $500M Toyota Deal, Uber Sheds Go-It-Alone Driverless Car Goal

When an autonomous Uber car being tested in Arizona collided with a pedestrian last March, it resulted in the first known fatality caused by a driverless vehicle.

The accident had a jarring effect on the entire mobility industry, but Toyota was one of the few players that took direct action in the wake of the accident. The Japanese automaker announced that it would stop, at least temporarily, testing autonomous systems on public roads in the United States.

This week, Toyota announced it will invest $500 million in Uber, according to a joint statement by the two companies Tuesday that also heralded a new partnership in autonomous mobility. A fleet of purpose-built Toyota Sienna Minivans will be equipped with Uber’s self-driving technology, combined with Toyota’s Guardian driving safety software. Toyota is making another technology contribution to the partnership, whose goal is to make it possible to bring autonomous ride-sharing to market as a mobility service at scale. The self-driving minivans will link to Toyota’s Mobility Services Platform (MSPF), a technology and data hub for connected vehicles. Passengers will summon the minivans via Uber’s ride-hailing network in a joint pilot program slated for 2021.

At least under the Toyota deal, Uber won’t be operating its own fleet of autonomous vehicles—a departure from the do-it-all direction the company had been pursuing. Once the pilot program lays the groundwork for scaled-up vehicle manufacturing, “Uber and Toyota anticipate that the mass-produced autonomous vehicles will be owned and operated by mutually agreed upon third party autonomous fleet operators,” the companies said in their announcement.

“The deal is the first of its kind for Uber, and signals our commitment to bringing world-class technologies to the Uber network,” Uber CEO Dara Khosrowshahi said in a statement. “Our goal is to deploy the world’s safest self-driving cars on the Uber network, and this agreement is another significant step towards making that a reality.”

While this is yet another big-money partnership typical of the mobility industry, it’s an interesting pairing because each company has had a very different approach to AV safety. Uber comes from the “go fast and break things” model popular with Silicon Valley tech startups, which prize innovation and iteration. Toyota, also no slouch when it comes to innovation, says its primary focus with AVs is safety.

Earlier this year, we interviewed Ryan Eustice, who heads up the Toyota Research Institute’s autonomous vehicle team in Ann Arbor, MI. TRI, a separate business unit within Toyota, was established in 2016 to advance the development of AV technologies, with a focus on A.I. and machine learning, robotics, materials, and user experience.

One of the products Eustice is helping to develop is Toyota’s Guardian system, which he said allows humans to drive while A.I. monitors everything closely in the background. The car only intervenes and overrides the driver when it’s necessary to prevent the car from crashing—a tool that might possibly have prevented Uber’s fatal collision earlier this year. Toyota has been testing Guardian at sites in Michigan, California, and Massachusetts.

“With Guardian … we’re not taking humans out of the driving task, but making them better,” Eustice explained. “Our view is unique to the industry—Guardian is a way different stance than anyone else I know is taking. Guardian doesn’t even fit SAE’s 0-5 autonomy scale, which is all about removing human drivers and offering convenience. With Guardian, we’re focused on safety and creating a non-crashable car that works with you.”

Eustice maintained that Toyota’s approach to safety was unique among its competitors, and felt the company had an opportunity to lead the industry in this area. While Toyota’s new partnership with Uber testifies to a level of trust in Uber’s self-driving technology, one imagines that being associated with Toyota’s safety gravitas would appeal to Uber, a company that has often faced safety challenges, as detailed by CNN.

Thus far, Uber’s approach to bringing AVs to market has been to develop driverless technologies in-house while operating its own fleet. Jason Miller, Uber’s head of business development for strategic operations, told the New York Times that while the company still sees a multi-billion-dollar business opportunity in fleet operations, that market “is not where Uber has a long-term interest in participating.”

Instead, Miller said he expects his company to transition to a model in which it serves as a technology partner to auto manufacturers. No word yet on whether the new Toyota deal will affect Uber’s plans to take the company public next year, but the valuation set by the Toyota deal is reportedly $72 billion, according to the New York Times.

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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