Ride-hailing startup Lyft Inc.is continuing its successful run of late, signing a new deal today with global automotive parts maker Magna worldwide Inc.to develop self-driving vehicle systems. It will look after outfitting vehicles from a variety of brands to enable them to operate on the Lyft network. As part of the deal, Magna will invest $200 million into Lyft, tagging on to the ride-hailing company's $1.7 billion recent funding round. The company opened a research facility in Palo Alto, California, and has aggressively recruited engineers.
Lyft just announced it's teaming up with Magna, a massive automotive parts supplier, to develop self-driving vehicle systems.
Teaming up with other technology companies and traditional automakers is critical to Lyft, whose business model, along with that of larger rival Uber, is compromised by needing to pay human drivers. Last summer, it opened a self-driving auto research lab in Palo Alto, California that included space for partners including Waymo; General Motors; nuTonomy; an autonomous vehicle startup out of MIT.
For its partnership with Magna, Lyft will take the lead on development and Magna will focus on manufacturing.More news: What the Insider Data Suggests About QUALCOMM Incorporated (QCOM)
Lyft and Magna are among numerous companies developing self-driving auto technology. Attendees could summon the vehicle with Lyft's app. It also builds entire vehicles for customers like Mercedes-Benz, BMW and Jaguar - a capability that has made the company a potential partner for a new entrant like Apple. In their press statement, they said they expected the system to be "market-ready" in "the next few years".
Magna has already been working on hardware for self-driving cars, including radar and lidar - an abbreviation for light detection and ranging - that help the vehicles see the world around them.
"There is a new mobility landscape emerging and partnerships like this put us at the forefront of this change", said Magna chief technology officer Swamy Kotagiri. The two companies would share the development costs and the resulting intellectual property.