Lyft & Magna Team Up on Self-Driving Systems

Lyft and Canadian auto parts supplier Magna will jointly develop and manufacture self-driving systems for use throughout the auto industry in a partnership that includes a $200 million investment in Lyft by Magna.

The companies will develop the technologies at Lyft’s Level 5 Engineering Center in Palo Alto, Calif., combining Magna’s hardware expertise and manufacturing capacity with Lyft’s software and its insights from millions of ride-hailing trips.

The self-driving technology should hit the market over the next few years, the companies noted in a press release. They plan to create joint intellectual property, use it in Lyft’s network, and sell it to others across the automotive industry. The deal is subject to regulatory approval.

Driverless cars are only beginning to hit the road in small numbers in limited areas. Before they go mainstream, the software that controls them must be refined and parts such as radar and Lidar systems need to get smaller and cheaper.

The need to tackle these jobs has brought together automakers, component manufacturers, tech giants and transportation companies in sometimes overlapping partnerships. Google parent company Alphabet led a $1 billion investment in Lyft last October after a tentative partnership between Google and Uber went sour. Then Alphabet’s Waymo division got a $249 million stake in Uber by settling a fierce legal battle last month.

Lyft and Magna come at autonomous cars from different sides, apparently with complementary strengths.

Magna, based in Aurora, Ontario, is one of the largest suppliers of components to car manufacturers, alongside companies like Bosch, Denso and Continental, which have their own self-driving projects and partnerships. Magna has 335 manufacturing operations around the world. Lyft, in Silicon Valley, is already aggressively pursuing and testing autonomous technology.

When it founded the Level 5 center last year, the company said 10% of its engineers were working on self-driving systems.

Lyft has taken a more open approach than Uber has to self-driving development. Last year it launched what it called an open platform for software, hardware and vehicle developers to put their technologies on Lyft’s ride network.

Partners can learn from the tens of millions of miles per day that Lyft cars cover, encountering different driving scenarios and gaining insights into things like traffic patterns, Lyft says. Eventually, three-dimensional map data will be part of the project. Meanwhile, Lyft can bring partners’ cars into its ride-hailing fleet. Carmakers including General Motors, Ford and Jaguar have partnered with the company.

Lyft is gaining on arch-rival, Uber, which recently has been rocked by scandals and its court battle with Waymo. Lyft reported earlier this week its revenue grew by 168% in the fourth quarter of last year. That was nearly three times Uber’s growth rate of 61% — though Uber revenue grew from a much larger base.

Lyft brought in $1 billion in revenue for all of 2017, while its larger rival collected $2.2 billion in the fourth quarter alone.

Magna CEO Don Walker said recently the company had billions in cash and would invest in electric and autonomous car technology, possibly through acquisitions. Last month, Magna announced a high-definition radar system it said could track and identify nearly 100 times as many objects as other car radars.

— Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia.

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