The Japanese car maker, Toyota is investing $500 million in Uber’s quest to develop self-driving cars for its ride sharing network.

Toyota will expand their partnership with Uber to jointly develop the self-driving cars which would involve the “mass-production” of autonomous vehicles.

Despite mounting losses, the deal values Uber at $72 billion, up 15% since its last investment in May.  The deal is being seen by both companies as a way to catch up with rivals in the competitive driverless car market.

A press release issued by the companies said that self-driving technologies used by both Toyota and Uber will be integrated into purpose built vehicles. In brief, Uber uses the ‘Uber Autonomous Driving System whilst Toyota’s system is called the ‘Toyota Guardian System.’

The cars themselves are to be based on Toyota’s Sienna Minivan model and pilot trails are due to start at the beginning of 2021

The fleet will be based on Toyota’s Sienna Minivan model with pilot trials beginning in 2021.

Executive vice president of Toyota Motor Corporation, Shigeki Tomoyama, said: “This agreement and investment marks an important milestone in our transformation to a mobility company as we help provide a path for safe and secure expansion of mobility services like ride-sharing.”

Reports say both companies are lagging behind firms such as Waymo, owned by Alphabet in the race to develop self-driving cars.

After a recent trial resulted in a fatal accident in Tempe, Arizona, which left a pedestrian dead, Uber has scaled back its trials.

Since then, the ride-hailing giant has removed its autonomous cars from the road and closed its Arizona operations.

Dave Lee, the BBC’s north American technology reporter based in San Francisco reported,

Uber’s troubled self-driving car efforts are in need of external help, and this deal with Toyota might provide that expertise. It’s of course a terrific opportunity for Toyota, too.

It was reported earlier this month that Uber was sinking around $1m-$2m into its autonomy work every single day. The results of that effort have not been something to be proud of – one fatal crash, one very expensive lawsuit, and not a lot of self-driving compared to the leader in this sector, Waymo.

Sharing the burden, and R&D cost, will delight Uber’s investors as it aims for its initial public offering next year.

Meanwhile, shares in Toyota spiked at reports of the deal. Not surprising. Many analysts think personal car ownership will drop dramatically when the self-driving, ride-sharing future is fully upon us – with major companies instead purchasing enormous fleets of vehicles. Toyota, then, may have just secured its biggest ever customer.

The deal extends an existing relationship with Toyota, and furthers Uber’s strategy of developing autonomous driving technology through partnerships.

The US firm has also teamed up with Daimler, which hopes to own and operate its own self-driving cars on Uber’s network.

On Monday, Uber said it planned to focus more on its electric scooter and bike business in future, and less on cars – despite the fact it could hurt profits.

Revenue from its taxi business is rising but the cost of expansion into new areas such as bike sharing and food delivery has meant losses have grown rapidly.”