"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 that includes Toyota vehicles and technologies", Shigeki Tomoyama, president of Toyota Connected Company, said in a statement.
It will feature both Uber's autonomous driving system and the Toyota Guardian automated safety support system.
Uber and Toyota are partnering to develop driverless cars, The Wall Street Journal reported Monday.
The deal is evidence that Uber no longer wants to go it alone in autonomous cars. If Uber manages to pull that off, it could cut its costs significantly, making Toyota's investment all the more valuable. However, this partnership is unique as the vehicles won't be owned or operated by either company. Toyota has also had a partnership earlier with Uber.
Toyota also has a research arm, the Toyota Research Institute that is based in California.
Uber leads the world in ridesharing, which gives it an edge in finding an audience for autonomous vehicles.
By expanding into autonomous vehicles, Uber also hopes to ward off a looming competitive threat from another early investor, Google and its self-driving auto spin-off Waymo, which is poised to launch its own ride-hailing service in Arizona before the end of this year. Uber plans to retrofit Toyota Sienna minivans with its autonomous technology and begin real-world testing in 2021. Uber co-founder and former CEO Travis Kalanick had insisted on developing a proprietary self-driving system and called autonomous cars "existential" to Uber. These services include being able to monitor whether a vehicle is being properly maintained or driven too aggressively. Uber shuttered its research and development efforts in Arizona in May, and only recently returned to the streets of Pittsburgh, Pennsylvania. The self-driving unit is a significant contributor to Uber's losses, which in the second quarter were $891 million. Over that time, the company's share price has seen more ups and downs than a typical privately held company. Uber had deactivated Volvo's automatic braking system in that vehicle, which raised questions about safety.