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Ford Motor Co. and its partner Argo AI will launch a self-driving ride-hailing service with Lyft Inc. in Miami and Austin, Texas later this year. It will be the largest commercial launch of robot rides.

The deal, announced on July 21, brings together the three elements essential to the use of robo-taxis – a major automaker, an autonomous technology developer, and a major ride-hailing company. The initiative is slated to expand significantly in 2023, with the ultimate goal of distributing 1,000 self-driving vehicles in the six U.S. cities where Argo was tested, including Washington.

As part of the transaction, Lyft will acquire a 2.5 percent stake in Argo, which Ford and Volkswagen AG jointly supported $ 3.6 billion. Lyft does not make a cash investment, but does provide Argo with access to fleet and security data that provides a detailed roadmap for building a large-scale robo-taxi service.

The partnership will raise Argo’s valuation to $ 12.4 billion, from a previous value of just over $ 7 billion, according to individuals familiar with the deal who were not authorized to discuss the details and have not been identified to become.

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The robo-taxi service will begin with fewer than 100 self-driving hybrid Ford Escape sport utility vehicles in Miami and Austin, each accompanied by two human attendants – a backup driver at the wheel who is ready when needed, along with a worker who oversees the technology that drives the operation. Vehicles are not limited to pre-approved routes, and passengers have the option to choose an autonomous vehicle from the Lyft app on their phone at no extra charge.

“You can go from address to address, there will be no fixed routes,” said Bryan Salesky, CEO of Argo, in an interview. “It will be like a vehicle that you would say hello to today, except that a robot drives.”

Its widespread use in a popular ride-sharing app will help “normalize” self-driving technology for consumers who are reluctant to trust the technology, said Jody Kelman, head of Lyft’s autonomous unit, in an interview.

“We really want to help consumers make this transition to self-driving technology as a transportation option,” said Kelman. “We think the easiest way for consumers to think about it is when the price is the same. It’s like any other ride on Lyft. “

Waymo, cruise

Ford, Argo and Lyft follow Alphabet Inc.’s Waymo, which operates self-driving minivans for a ride-sharing company in Chandler, Arizona, near Phoenix. General Motors Co.’s cruise unit is also testing an autonomous ride-hailing business in San Francisco, but has not disclosed when it will be in commercial use.

Salesky says his company’s initiative with Ford and Lyft is more complex than the current one.

“We’re in much more difficult areas,” Salesky said. “We’re in cities where there is a significant demand for ridesharing and delivery of goods, which makes for great businesses.”

In addition to ride-hailing, the self-propelled Ford Escapes are also used to deliver groceries and other small items in partnerships with other companies Salesky has not identified.

The detailed market data that Lyft provides will help expedite the rollout, Salesky said.

“It helps us figure out where to park these vehicles,” said Salesky. “They really understand what the movement patterns are in cities to make sure we’re mapping and testing the right areas. And the safety data will help us understand human driving performance. “

Lyft sees the deal as a merger of all the necessary players to build a robo-taxi business.

“This collaboration marks the first time all pieces of the autonomous vehicle puzzle have come together,” Lyft co-founder and CEO Logan Green said in a statement. “Every company brings the size, the knowledge and the skills in its area of ​​expertise that are necessary to make autonomous ride-hailing a business reality.”

Ford has been partnering with Lyft since 2017, though the driving services company also received a $ 500 million investment from GM in 2016. Kelman said GM is no longer on Lyft’s board of directors and the automaker is not currently pursuing a robo-taxi deal with Lyft.

Deployment comes a little earlier than expected. Ford previously said the debut would be postponed to 2022 due to delays caused by the pandemic.

“Decisive step”

“This new agreement is a critical step towards full commercial operation,” said Scott Griffith, CEO of Ford’s Autonomous Vehicle and Mobility Unit, in a statement citing Lyft’s “world-class transportation network.” He said it was the beginning of “an important relationship between three dynamic companies”.

As Argo ramps up to full commercialization, it plans to go public this year and is running a separate private fundraising round this summer. Argo was founded in 2016 by Salesky, who co-founded the Google self-driving car project that became Waymo, and Peter Rander, who previously ran the autonomous unit of Uber Technologies Inc.

Salesky realizes that convincing cautious commuters to try self-driving cars is one of the biggest challenges, but he believes they will realize that it is actually safer.

“We all had human drivers who we would love to never drive again,” said Salesky. “We think you will really enjoy it after experiencing it and you want to ride ours.”

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