Why Lyft’s sale of their autonomous driving division doesn’t mean they’re out of the AV game

Lyft began their foray into autonomous driving in 2017 with the launch of Lyft Level 5, a division focused on developing self-driving systems. With an aggressive target to deploy self-driving cars, Lyft employed 400+ engineers to work on self-driving platforms and software (2019). Over the next several years, Lyft Level 5 developed relationships to progress self driving cars, most notably with Ford (2017), Aptiv (2018), and Magna (2018).

So why did Lyft sell this division to Toyota in 2021?

It’s not that Lyft is no longer interested in pursuing autonomous vehicles. Instead, our relationship maps show that Lyft is just pursuing autonomous vehicles from a different route — one that relies more heavily on partnerships than on developing the technology in-house.

How Lyft might benefit from taking a partnership approach to autonomous driving

As OEMs also pursue the autonomous driving space, a partnership approach may allow Lyft to make better use of the connections available to them in their immediate and broader network without expensive development costs and the risk of being perceived as a competitor.

These network connections include:

  • Investment relationships with General Motors and Jaguar Land Rover
  • Project partnerships with Ford via Argo AI (2021) and Shared Streets (2018) or leveraging Argo AI’s relationship with VW
  • Hyundai as a 2nd degree partner through work with Motional, a joint venture between Aptiv and Hyundai
  • 80+ members of the Partners for Automated Vehicle Education (PAVE) Coalition, e.g. OEMs like Daimler, Audi and autonomous driving subsidiaries of tech companies, like Zoox and Waymo (full list here).

Even after the sale of Level 5 in April 2021, Lyft has expanded its work with Motional through 2023, indicating continued interest in the autonomous driving space. The divestment also frees up $100 million in operating expenses for Lyft. (The relationship with Magna was also shut down in 2020.)

Where Lyft might grow their partnerships in the autonomous driving space

One adjacent area we would watch for growing partnerships is with insurance companies. So far, Lyft has announced partnerships with Allstate (2020) and Mobilitas (2021). However, these partnerships are focused more on driver coverage for current ride-share models, and aren’t covered in all 50 US states.

As autonomous driving changes the insurance landscape by moving liability from drivers to manufacturers, we expect partnerships between OEMs, network providers like Lyft, and insurance companies to expand. Reasonable targets for Lyft’s partnerships in this space could be other members of the PAVE Coalition, which include AAA, Insurance Office of America, and Liberty Mutual. An interesting precursor for this type of work could be Lyft’s relationship with BlueCross BlueShield in 2017. While this work was focused on providing access to doctor’s appointments, it could establish a precedent for Lyft partnering with large national insurance companies.

A second area to watch would be increased partnerships with augmented reality (AR) companies, who would enable to the transition to autonomous driving. In 2018, Lyft acquired Blue Vision Labs, an AR company. Beyond a patent announced in 2019, they have not announced further work in this space. This might be because they can still access technology partners like Microsoft within a few degrees of their network, without needing to invest heavily in AR technology themselves.

In summary

What could have appeared as a signal that Lyft was moving away from autonomous driving was actually a move in the market to change their approach. Centrly’s unique relationship mapping can help you keep a finger on the pulse of dynamic markets like this one. We’re excited to see where the future of autonomous driving goes, and how the ecosystems develop around this new space. If you’re interested in exploring a new market space, drop us a line to see how we can help.

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