Who knew making self-driving cars would be so hard?

On Wednesday, Lyft — the US’s second-largest labour arbitrage business — announced it was selling its autonomous taxi unit for $550m to Toyota’s Woven Planet division. The news follows Uber’s cashing out of its robotaxi division in December, that time to Aurora — a company that both Toyota and VW have sizeable equity stakes in.

Lyft will be paid the first $200m upfront for the division, with the rest of the balance to be settled over the next five years.

So what’s the rationale here? Well, on the ensuing conference call, it seemed a mixture of cost and increasing competition were the focus. Here’s chief financial officer Bryan Roberts on the call (transcript via Sentieo):

So that’s $100m of savings. You might expect that to move the needle on Lyft’s profitability, until you remember the company lost $1.75bn in the 12 months through to December, according to S&P Global data.

There are many moving parts to consider in the world of self-driving vehicles at the moment, but the big one for the next few years will be the increasing recognition that not only is the technology still at least half a decade away from having full commercial application, but that the cost needed to get there could easily run into the billions. In practice, that means we’re due for more consolidation in the space, as those with the deepest pockets — whether that be Amazon, Toyota, or perhaps even Google — continue to pick off the smaller names.

But even if we do eventually enter to a robotaxi future of wonderment, will it make any economic sense? That’s a question for now that still remains unanswered. It’s easy to imagine Waymo licensing its self-driving technology to, say, BMW. It’s harder to imagine who will clean, maintain, manage, regulate and assume liability for a fleet of AI robotaxis.