Lyft Inc. is joining the growing number of tech firms that are working to develop autonomous vehicles. 

At a press conference today, the ride-sharing giant announced the formation of a new research group tasked with turning its platform into a “hybrid system” that will enable users to hail cars driven by both humans and artificial intelligence. The division operates out of a 50,000-square-foot lab in Palo Alto, California, that is set to employ several hundred engineers by the end of 2018. Their work will focus on developing the technological building blocks needed to equip with a vehicle with driverless navigation capabilities.

Lyft didn’t go into too much detail, but the fact that the new lab is called “Level 5” may provide a clue as to its end-goal. The name is a reference to the highest of the five tiers that the U.S. Department of Transportation uses to classify autonomous vehicles. A car that meets the Level 5 criterion would possess the ability to navigate roads at least as well as a human in all driving conditions.

Such vehicles are a still long way off, which is why Lyft plans to concentrate its efforts on the basics at first. The Verge quoted Vice President of Engineering Luc Vincent as saying that the new division will prioritize the development of a machine perception system for processing environmental data.

As for where this information will come from, the executive hinted that Lyft plans to use off-the-shelf LIDAR equipment at first. But he left open the possibility that the company may seek to develop homegrown sensors further down the road.

Such a project would add new challenges to what is already shaping up as a complex undertaking. Besides the many technical difficulties involved in developing autonomous driving technology, Lyft will also have to overcome its late entry into the race. Uber Technologies Inc. has been testing a fleet of self-driving cars since late 2016, while Google’s rival project dates back more than seven years.

Yet despite being an uphill battle for Lyft, the potential reward of the effort is more than worth the risk. A homegrown navigation system could enable the company to avoid dependence on outside providers and reap the cost benefits of having an in-house supply chain.

With that said, Lyft understandably plans to leave the auto manufacturing part of the equation to partners. The company teamed up with General Motors Corp. earlier this year to put several thousand self-driving cars at the disposal of its users starting from 2018. It has also accepted a $25 million investment from Jaguar Land Rover Automotive PLC to support autonomous vehicle development efforts.

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