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Lyft Divests Autonomous Driving Unit

To save operating expenses in areas beyond its core ride-sharing business, Lyft has agreed to sell its autonomous-driving unit to Toyota.

The divestment will allow Lyft to partner with Toyota to develop vehicles for its autonomous ride-hailing networks.  The partnership will further the companies’ mission to advance mobility technologies on a global scale.

Video Spotlight: 

This post is based on the Industry Week article, Lyft to sell its autonomous-driving unit to Toyota for $550 million, by Agence France-Presse, April 27, 2021; the Forbes article, Lyft, Spotify And Snap: Three Stocks That Look More Dangerous Post 1Q21 Earnings, by David Trainer, May 24, 2021; and the YouTube video in the Spotlight. Image source: Shutterstock/chombosan

Discussion Questions:

1. What category of capacity constraint is being resolved by Lyft’s divestment decision?

Guidance: The divestment resolves a competency constraint for Lyft. The company is known for its ride-sharing services but not for making autonomous driving vehicles.

2.  In what ways is Lyft’s divestment decision a strategic partnership with Toyota from a supply chain perspective?

Guidance: Lyft’s divestment decision allows Lyft and Toyota to bring together people, resources, and infrastructure to configure a supply chain to advance autonomous mobility technologies globally.

Lyft will focus on its core ride-sharing operations at the downstream end of the supply chain while Toyota will develop vehicles for the autonomous ride-hailing network at the upstream end of the supply chain.

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