Features

Self- Driving Force of the Future

Reading Time: 3 minutes -

 

By Maimun Ur Rashid Mustafa

Uber Advanced Technologies Group Receives $1 Billion Investment

In the 1993 movie Demolition Man I watched Sylvester Stallone’s character, a man from the past stranded in a dystopian future, struggle to navigate a self-driving car. When we fast forward to 2019 that science fiction has become fact years ahead of Hollywood’s prediction. Global transportation network company, Uber Technologies is striding forward with its autonomous ride sharing services with the support of market leaders to change driving experiences as we know today.

A Billion Dollar Business Deal
Uber announced in mid April that it had secured a $1 billion investment from automobile giant Toyota, car parts manufacturer DENSO and the SoftBank Vision Fund. Uber CEO Dara Khosrowshahi announced via twitter the details of the investment stating that the concerned are collaborating toward ‘the future of mobility’. The funds will go in Uber’s newly formed Advanced Technologies Group (ATG) entity. The terms of the agreement will have, Toyota and DENSO investing $666 million and SoftBank Vision Fund contributing another $333 million, according to the Uber press release. The fund will provide a valuation for Uber ATG amounting to $7.25 billion on a post-money basis. Toyota also plans to contribute an additional $300 million over the next three years to help cover the costs of the activities.

US firm Debevoise & Plimpton LLP is advising the concerned parties in Uber’s ATG deal, a legal agreement that will affect the global market significantly.

Raising the Stakes
The investment is targeted to furthering the work amongst the companies to market next-generation autonomous vehicle hardware. It will prepare the companies and the industry for mass production and commercialization of automated ridesharing vehicles and services This strategic partnership can be seen as a vertical integration strategy for Uber to benefit from the financial backup as well as technical manufacturing know how of the invested parties.

Uber Opportunities
The Uber CEO highlighted the prospects of this monumental deal, ‘The development of automated driving technology will transform transportation as we know it, making our streets safer and our cities more livable. Today’s announcement, along with our ongoing OEM and supplier relationships, will help maintain Uber’s position at the forefront of that transformation’.

In reality this show of faith was essential to Uber’s growth. The company posted a $1.85 billion loss last year, but R&D efforts on products like autonomous cars and flying vehicles pulled the numbers down by accounting for more than $450 million in expenditure. Moving those particularly capital-intensive R&D plays into a new entity will help bring the core of Uber more towards realistic targets. Nevertheless this partnership will boost confidence and may greatly raise the valuation of the company in the upcoming Uber IPO to almost $90-100 billion given they raise $10 billion as anticipated by industry experts. In the past Toyota and SoftBank have also backed Asian TNP Grab, a company where Uber owns 23% of equity. Toyota and Uber are working to bring autonomous Sienna vehicles to Uber’s service by 2021. This collaboration may be seen as a precursor to bringing this technology to Asia via Grab.

Toyota’s Take
Toyota being the second largest car manufacturer in the world as well the sixth largest company by revenue has much to benefit from investing in innovations for tomorrow. With the vision of their subsidiary Connected Company to re-imagine the use of data and technology and deliver ‘effortless services that make life easier and driving safer, more convenient and fun’, this partnership greatly aligns with that objective. Toyota has also been developing the two-pronged approach to self-driving cars where their Chauffeur system takes charge but their Guardian program allows humans being to be in control most of the time. This may greatly reduce worries of ride sharing users who may fear accidents due to the technical complexities of technology while human drivers still retain jobs.

Shigeki Tomoyama, Toyota executive Vice President and President of Toyota’s in-house Connected Company commented in the same press release that, ‘Toyota is dedicated to realizing a safe and secure future mobility society. Leveraging the strengths of Uber ATG’s autonomous vehicle technology and service network and the Toyota Group’s vehicle control system technology, mass-production capability, and advanced safety support systems such as Toyota Guardian™ will enable us to commercialize safer, lower cost automated ridesharing vehicles and services.’ He added, ‘We believe that the combined work of Toyota, DENSO, and Uber ATG on developing next-generation autonomous vehicle hardware will accelerate the timeline for an early success of automated ridesharing services.”

To Infinity and Beyond
In the age of rapid ICT evolution, autonomous vehicles are not dreams but demands of the day. With global industry leaders like Uber, Toyota and DENSO leading the path for such change the future is indeed bright. Then we can only hope if the Demolition Man did wake up in 2021 then maybe even he would also have found it difficult to cause accidents as he would experience seamless self-driving.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

ICE Business Times is the leading premier business monthly in Bangladesh today, that is brought out by ICE Media Ltd. Establishing its credential as a forerunner among English language-based magazines of Bangladesh, ICE Business Times has set a benchmark of excellence for existing or future competition in the field.

Copyright © 2018 ICE Business Times

To Top