Lyft to Build Its Own Self-Driving Technology, Open Lab in Palo Alto

Lyft said on Thursday it will develop its own autonomous driving technology and open a laboratory in the Silicon Valley city of Palo Alto to help build the hardware and software.

Lyft’s plan to build in-house self-driving technology is a pivot from what has been a strategy of primarily focusing on building partnerships with car manufacturers, like General Motors and Jaguar Land Rover, and self-driving car startups like nuTonomy.

The move comes as its main competitor, ride-hailing giant Uber, runs rudderless after its founder, Travis Kalanick, resigned last month. Uber began testing self-driving cars last year.

In a press-only event at the company’s San Francisco headquarters, Lyft executives said the firm remains committed to its partnerships while working on its own self-driving technology.

“I don’t think this is a zero-sum game,” said Taggert Matthisen, Lyft’s senior director of product. “It is so early in this industry right now.”

Lyft’s first major step in building its own technology will be the upcoming laboratory in Palo Alto, dubbed Level 5. Lyft says it will employ several hundred people by the end of 2018. The lab is expected to open “in a few weeks,” the company said.

“This is an unique time for Lyft to take the lead,” said Raj Kapoor, Lyft’s chief strategy officer. “Level 5 is the ultimate level in building autonomous vehicles. It’s going to be a center that’s going to open to working with partners.”

For both Uber and Lyft, self-driving cars are a frontier crucial to their success. The ride-hailing rivals have lost enormous amounts of money every year due to them subsidizing discounts for riders and bonuses for drivers. Lyft in 2016 lost $600 million despite a 250 percent jump in revenue; Uber lost $3 billion in the same year, according to Bloomberg.

Both hope to cut losses by replacing human drivers with autonomous vehicles. But on Thursday, Lyft preached a hybrid system in which human drivers will take over self-driving cars in locations and situations deemed too chaotic and difficult for machines.

“The hard reality is that every street, every route is not the same,” said Matthiesen. “If there is rain or a [major event] nearby, that’s not an ideal situation for autonomous vehicles early on.”

Lyft’s focus on finding a balance is also apparent in how it says it will work with its partners. Lyft said it has been sharing its application codes with its smart car-building partners so that they can plug Lyft into their future car models.

And Lyft said that if its in-house self-driving technology reaches maturity, it will rely on the automobile industry to build a car rather than building one themselves.

“Lyft is not getting into the business of manufacturing a car,” said Kapoor. “This isn’t about bring one car, two cars or 100 cars to San Francisco. The auto industry has done a fantastic job in safety and reliability for many, many years, and we respect that.”