Toyota, Volkswagen partner ride-hailing companies

The investments by the automakers could lead to car sales and the joint development of technology

Toyota and  Volkswagen are the latest automakers to forge alliances with ride-hailing companies, deals that could see the car makers not only sell cars to drivers of the app companies but also develop jointly on-demand mobility technologies.

On Wednesday, Toyota said it was making a strategic investment in Uber Technologies as part of a bigger partnership that would include leasing of its cars to Uber drivers. Car purchasers can lease their vehicles from Toyota Financial Services and cover their payments through earnings generated as Uber drivers, the Japanese car giant said in a statement.

Toyota said it will also explore collaboration in a variety of other areas, such as developing in-car apps that support Uber drivers, sharing knowledge and accelerating research efforts. Uber already has an autonomous car project, though it isn't clear whether the collaboration between Toyota and Uber will include the development of these types of vehicles. Toyota said last year it was testing the Highway Teammate, an automated vehicle, and expects to launch self-driving cars based on the technology by 2020.

Car makers are responding to two challenges in their business environment. On the one hand, tech outfits like Alphabet's Google Self-Driving Car Project and Uber are developing autonomous technologies, and the car companies have to choose between collaboration or competition. Fiat Chrysler Automobiles seemed to have chosen the former option when it decided to collaborate with Google on self-driving minivans.

A deal announced recently between Lyft and General Motors, which involved a US$500 million investment by GM in the ride-hailing company, also involves  the joint development of an integrated network of on-demand autonomous cars, combining technology for self-driving cars from GM with software to automate ride matching, routing and payments from Lyft.

The car makers are also realizing that if ride-hailing and other mobility options take off, there could be fewer people buying cars. So the best opportunity is to sell or lease cars to drivers of the ride-hailing companies and work on technologies that will better integrate ride-hailing apps with their cars. 

A proposed US$300 million investment by Volkswagen in Gett, an European ride hailing provider, also announced Tuesday, is linked to the company’s stated objective of generating a substantial share of sales revenue from new business models like mobility-on-demand by 2025. Volkswagen announced last month a new company for the development of mobility services.

Gett and Volkswagen will now focus on “collaborative development and market expansion of on-demand mobility services in Europe and beyond.” Gett will provide Volkswagen with the technology to expand beyond car ownership to on-demand mobility for consumers and businesses, said Gett's founder and CEO Shahar Waiser in a statement.

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