Toyota (TYO: 7203) has announced plans to invest $500 million (£387 million) in Uber.
Both firms view the deal as an opportunity to work on the “mass-production” of autonomous vehicles and catch up with rivals in the market.
“This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing,” said Shigeki Tomoyama, the executive vice president of Toyota.
“Uber’s advanced technology and Toyota’s commitment to safety and its renowned manufacturing prowess make this partnership a natural fit,” said Uber CEO Dara Khosrowshahi. “I look forward to seeing what our teams accomplish together.”
Uber, which will be valued at $72 billion despite the increaing losses, has scaled back on its ambitious autonomous vehicle driving tests following the fatal crash that killed a pedestrian.
Alphabet’s (NASDAQ: GOOG) Waymo has continued to develop their driverless car and appears to be steaming ahead.
The deal between Uber and the Japanese vehicle manufacturer will ease pressure off of Uber, who is reportedly spending between $1-2 million into its autonomy work every single day.
The deal will appease Uber’s investors as the group prepares to go into public next year.
Gill Pratt, Toyota Research Institute CEO, said: “Uber’s automated driving system and Toyota’s guardian system will independently monitor the vehicle environment and real-time situation, enhancing overall vehicle safety for both the automated driver and the vehicle.”
On Monday, Uber announced plans to focus more on its electric scooter and bike business and less on cars, despite the fact it would hurt short-term profits.
Shares in Toyota spiked at the news. They are currently trading up 0.86 percent at 7.026 (0821GMT).
