April 27, 2021 at 12:39AM

Lyft is selling its self-driving division, Level 5, to Woven Planet Holdings, according to a press release. The deal is expected to close in the third quarter of this year.

Woven Planet is a subsidiary of Toyota, and the transaction will also come with multi-year, non-exclusive commercial agreements with Lyft and Woven Planet to boost the development of automated driving technology, the release stated.

Lyft will see around $550 million in cash from the transaction, with $200 million paid upfront, and $350 million to be paid over a five-year period, according to the release. In addition, the transaction will be expected to remove $100 million annualized non-GAAP operating expenses on a net basis, which will come from a reduced research and development (R&D) spend. That will then speed up the Lyft path toward adjusted EBITDA profitability.

“Not only will this transaction allow Lyft to focus on advancing our leading autonomous platform and transportation network, this partnership will help pull in our profitability timeline,” Lyft Co-Founder and President John Zimmer said in the release. “Assuming the transaction closes within the expected timeframe and the COVID recovery continues, we are confident that we can achieve adjusted EBITDA profitability in the third quarter of this year.”

The Level 5 team will join Woven Planet in order to help with autonomous driving and other mobility tech, the release stated. Lyft’s Open Platform team works in deployment and scaling of third-party self-driving technology, and it will become the new Lyft Autonomous team.

In addition to the buying of Level 5, Woven Planet will also sign commercial agreements with Lyft to use Lyft system and fleet data in order to expedite the safety and commercialization of the automated driving vehicles to be developed by Woven Planet, according to the release.

In February, Lyft was still playing it safe with the pandemic continuing to cut down on travel and mobility at that time, PYMNTS reported. The company’s fourth-quarter revenues were a total of $570 million.

Lyft To Sell Self-Driving Division To Woven Planet …

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