Toyota, SoftBank team up to develop self-driving car services

Deal comes as both companies envision a future in which fewer people drive their own vehicles

Photo: EPA SoftBank Corp. Chief Executive Officer Masayoshi Son (L) and Toyota Motor Corp President Akio Toyoda (R) shake hands during a joint announcement

Japanese automaker Toyota and tech giant SoftBank announced Thursday that they are forming a joint venture by April 2019 that will use data to optimize supply and demand in the transportation space. SoftBank has already invested in Uber  and a range of other ride-hailing startups like Didi in China and Grab in Southeast Asia, but this initiative with Toyota is not related to those deals. Instead, it is designed to combine SoftBank’s focus on Internet-of-Things technology and Toyota’s connected vehicle services platform to enable new types of services that run on autonomous vehicle tech.

Called MONET — after ‘mobility network’ — the joint venture will essentially assign autonomous vehicles to various different 'just in time' services, which essentially means more than on-demand. It will also start at 2bn yen ($17.49m), and will be increased to 10bn yen in future, with SoftBank owning 50.25 percent of the joint venture while Toyota will take 49.75 percent.

In the first phase, MONET plans to roll out just-in-time vehicle dispatch services for Japanese public agencies and private companies to meet user demand. Those services include on-demand transportation and corporate shuttles. By the second half of the 2020s, the joint venture will roll out an on-demand mobility service that will use Toyota's self-driving, battery-operated electric vehicle called e-Palette for various purposes. They include meal deliveries, where the food is being prepared inside the vehicle, hospital shuttles that can conduct medical examinations on board and mobile offices. SoftBank said that the business will be focused on the Japanese market with “an eye to future expansion on the global market.”

The announcement adds to a slew of deals and discussions aimed at sharing costs and securing expertise that has resulted in myriad pairings between global automakers, ride-hailing companies as well as major tech firms. The deal is, for example, not Softbank's only bet on automated driving. The company's $100bn Vision Fund, its tech-focused investment arm, committed $2.3bn to General Motors' self-driving car unit GM Cruise earlier this year. Among the other autonomous vehicle projects is also the development of a self-driving bus in partnership with China’s Baidu.

Toyota has also made strong progress on self-driving vehicles, having debuted its 3.0 self-driving research car earlier this year and then, in March, creating a new $2.8bn business that’s focused on developing requisite software systems. That latter program is designed to work alongside the Toyota Research Institute which, fueled by a $1bn grant, is pushing the firm’s autonomous tech strategy. Toyota is also aligned with Uber on ride-hailing. The firm invested $500m in Uber and $1bn in Grab via deals this year. Meanwhile, back in January at CES, Toyota also announced  it is working with Amazon, Uber, Didi, Mazda and Pizza Hut to develop an electric autonomous shuttle that can be used to deliver people or packages. The business alliances were created to focus on the development of the e-Palette.

Automakers around the world are making multibillion-dollar investments and creating long-range plans for rolling out autonomous vehicles. Many of them are teaming up with other companies to share risks, technologies and expenses associated with building self-driving cars since it will take time before those vehicles can be mass-produced and sold for a profit.

Many analysts think the widespread adoption of self-driving cars will start to pick up in 2021 or 2022. Yet, such partnerships show that even big well-funded players already fear being left behind in the race to develop autonomous and connected cars.

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