Toyota subsidiary Woven Planet is to buy Level 5, the self-driving division of Lyft, one of the largest ride-hailing companies in the world.

Lyft will receive approximately $550 million in cash, with $200 million paid upfront subject to certain closing adjustments and $350 million of payments over a five-year period.

The deal mirrors Lyft-rival Uber’s decision last December to sell its autonomous driving division to Aurora.

And while the agreement for Lyft means it is off-loading an expensive programme with no prospect of immediate return on investment, it marks the first major deal for the newly established Woven Planet Holdings and its aspirations for Woven City. Based at a former Toyota factory in Japan, this is conceived as a “prototype city of the future” where it can test autonomous vehicles, innovative street designs, smart home technology, robotics, and new mobility products developed by teams of engineers and scientists who will live there full time.

Commenting on the deal James Kuffner, CEO of Woven Planet said, “This acquisition advances our mission to develop the safest mobility in the world at scale. The Woven Planet team, alongside researchers at Toyota Research Institute, are already an established centre of excellence for software development and technology. Bringing Level 5’s world-class engineers and experts into the fold will allow us greater speed and impact. This deal will be key in weaving together the people, resources, and infrastructure that will help us to transform the world we live in through mobility technologies that can bring about a happier, safer future for us all.”

Logan Green, CEO of Lyft added, “Lyft has spent nine years building a transportation network that is uniquely capable of scaling autonomous vehicles. This deal brings together the vision, talent, resources and commitment to advance clean, autonomous mobility on a global scale.”

George Kellerman, Woven Planet’s Head of Investments & Acquisitions, Woven Planet commented further, “We aim to become the centre of interconnected mobility systems, weaving together a variety of technologies and partnerships extending far beyond the automotive industry. This acquisition marks the first in a coordinated strategy to consolidate leading technologies and talent to help realise this vision.”