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The consolidation of the capital-intensive autonomous vehicle industry continued today. While Lyft is the latest company to abandon the development of autonomous vehicles, it won’t be the last.

Lyft sold its self-driving unit, Level 5, to Toyota subsidiary Woven Planet Holdings for $550 million in cash. Lyft will receive $200 million upfront and $350 million of payments over a five-year period. Lyft, one of the world’s largest ride-hailing companies, said the sale better positions it to make a profit. It will see an annual savings of $100 million of non-GAAP expenses. Lyft’s business was hit hard by the COVID-19 pandemic. For example, revenue declined 61% to $339 million for the quarter that ended in June 2020.

The sale of Level 5 also allows Lyft to focus on partnerships with self-driving companies that want to deploy their technology on its platform, rather than develop costly technology itself. Uber made the same move when it sold its self-driving unit to Aurora in December 2020.

Woven Planet, which Toyota set up in January, will take over all of the more than 300 employees of Level 5. The combined company will have approximately 1,200 employees.

“This acquisition advances our mission to develop the safest mobility in the world at scale. The Woven Planet team, alongside the team of researchers at [Toyota Research Institute], have already established a center of excellence for software development and technology in the Toyota Group,” said James Kuffner, CEO, Woven Planet. “Bringing Level 5’s world-class engineers and experts into the fold – as well as additional technology resources – will allow us to have even 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.”

Lyft already allows consumers to book rides in self-driving vehicles in select cities in partnerships with Waymo and Motional. Lyft co-Founder and president John Zimmer said the company fielded interest from “a number” of autonomous vehicle companies before selecting Toyota’s Woven Planet. He said a key in deciding to sell the unit was recognizing Lyft no longer needed to develop its own autonomous vehicle technology. “It’s important, at this point, not to get into an exclusive relationship,” Zimmer said.

Lyft launched Level 5 in 2017 and said that by 2021 “a majority” of its rides would take place in autonomous vehicles. Like predictions made by other autonomous vehicle companies, Lyft’s never came to fruition.

The deal marks Toyota’s latest foray into ride-hailing. It already owns a stake in China’s top ride-hailing firm Didi Chuxing and Southeast Asia’s Grab.

Toyota also recently invested $400 million in Pony.ai, a self-driving startup based in the U.S. and China. But much of Toyota’s autonomous vehicle work has been kept quiet. Toyota Research Institute has been conducting tests at its Ottawa Lake, Michigan, closed-course facility for a number of years. It also invested $500 million into Uber’s self-driving unit, but transferred the stake when Uber sold the unit to Aurora. Aurora is developing a fleet of autonomous Toyota Sienna minivans that could be deployed by the end of 2021. The vehicles will then “some time after that” be deployed in ride-hailing fleets for Uber and other companies.

Developing autonomous vehicles, in particular self-driving cars, has taken more time and more money than originally thought. This has caused many companies to hop off the bandwagon, and Lyft is just the latest. The table below summarizes the most notable mergers and acquisitions in the autonomous vehicle space. As you can see, GM investment into Lyft and acquisition of Cruise in early 2016 seems to have started the craze. In 2017, Intel paid $15 billion for Mobileye and Ford announced a $1 billion investment into Argo AI.