Lyft Inc. has struck a multimillion-dollar partnership with North America’s biggest automotive supplier to together fund and develop the systems needed to make self-driving vehicles a reality.
Magna International Inc. and Lyft will share the intellectual property from co-developing autonomous vehicles, and Magna will be free to sell the technology to car companies. In addition to helping fund the partnership, Magna has made a $200 million equity investment in Lyft, extending the ride-hailing company’s most recent financing round to $1.7 billion.
“This industry is at an early stage; it’s like when the first smartphone appeared on the market,” said Raj Kapoor, Lyft’s chief strategy officer. “Autonomous software and hardware is important, but it should be in everybody’s hands, and what we have to be great at is being a great network.”
Lyft has already struck a number of tie-ups aimed at someday bringing self-driving cars to its platform. It has agreements with Alphabet Inc.’s self-driving car unit Waymo and with Ford Motor Co. General Motors Co. is a major investor in the San Francisco-based ride-hailing company.
Lyft’s deal with Magna isn’t expected to scuttle those partnerships. While Magna will have an exclusive agreement to outfit Lyft’s fleet with autonomous driving equipment, Lyft still plans to grant other autonomous vehicle companies access to its ride-sharing platform.
“The idea here is definitely outfitting a current production vehicle,” said Swamy Kotagiri, Magna’s chief technology officer. “The big differentiator here is the co-development of the software, joint ownership of the IP, but Magna is the exclusive partner to outfit the Lyft fleet with the autonomous kits.”
When self-driving cars will actually arrive is an open question. Companies are running small pilot programs, mostly still overseen by human drivers. Autonomous vehicles aren’t yet ready to replace human drivers, and parcel delivery may go driverless long before taxis. Still, ride-hailing companies, including Lyft’s chief rival, Uber Technologies Inc., see autonomy as essential to the industry’s future.
While Uber has assembled a massive internal team of engineers building self-driving vehicles, Lyft got off to a slower start. More recently, Lyft has struck a number of high-profile partnerships and opened its own self-driving car research center, called Level 5 in Palo Alto, California. Magna will locate some of its employees in those offices.