Toyota to buy Lyft self-driving unit for $550 mln

Toyota is stepping up its automation ambitions.

It's to buy Lyft's self-driving technology unit for $550 million.

The U.S. ride-hailing firm will acquire the Level 5 team, which works on essentially completely autonomous driving.

The move will also give Toyota a direct presence in Silicon Valley and London.

For Lyft, the deal will allow it to become profitable sooner, and takes away the risk of developing a costly technology that has yet to enter the mainstream.

Toyota currently offers level 2 automation, featuring advanced driver assistance technology.

And has other self-driving projects in the works, including a joint venture with SoftBank.

The auto giant has been working closely with ride-hailing firms and owns a stake in top Chinese firm Didi Chuxing and Southeast Asia's Grab.

It had a stake in the self-driving unit of Lyft's larger rival Uber, but transferred its holding when Uber sold the unit last year.

Analysts expect Toyota to do more deals too, in order to gather software and people who have knowledge of relevant technology.

Lyft's sale allows it to offload cash-burning side businesses and focus on reviving core divisions following a bruising year through the global health crisis.

It already allows people to book rides in self-driving vehicles in select cities in partnerships with Alphabet's Waymo and Motional, a joint venture between Hyundai and tech firm Aptiv.

But Lyft also believes human drivers will remain important.

Particularly during peak demand periods, bad weather, or in areas that self-driving cars are unable to navigate.