Tuesday, May 24, was a good day for ride-hailing companies, as two car manufacturers announced they’d bought stakes in this business.
One of them was Volkswagen, which invested $300 million to Gett (ex-GetTaxi), a black cab and ride-hailing company whose largest markets are in Israel, London, and Moscow.
Then there was Toyota, which committed an undisclosed sum in Uber and revealed a “memorandum of understanding” to “explore collaboration […] in the world of ridesharing in countries where ridesharing is expanding.”
When you tally that with the $500 million that General Motors invested in Lyft, you see that sides are clearly being chosen by car companies as they place their bets on the autonomous and on-demand business.
Currently, the most concrete plans for Toyota’s deal with Uber have resulted in the products they want to market to drivers: apps that offer on-trip support and leasing options.
Toyota also revealed it will set up a “special fleet program” to sell vehicles to Uber. Then there are vaguer goals of the partnership, such as “accelerating research efforts,” “sharing knowledge,” and “collaboration in a variety of other areas.”
Meanwhile, Volkswagen’s investment in Gett will be used to “accelerate its expansion to the rest of Europe, and strengthen its position in New York City,” according to the Gett CEO Shahar Waiser.
At the same time, VW says it wants to help Gett provide “integrated mobility solutions,” which is one of the newest buzzwords for automakers. Traditional car manufacturers are aware they need to adapt to a world where people don’t buy cars the way they used to.
Unlike members of GenX, millennials are too burdened by debt and side effects of the Great Recession to purchase cars. So the solution is to invest in ride-hailing services.
As it was throwing half a million dollars at Lyft back in January, GM declared itself “at the forefront of redefining the future of personal mobility.” That might soon change if more automakers invest in the field.
This commitment to on-demand services will only be accelerated by driverless technologies, which is the ultimate goal of both the automakers and the ride-hailing companies. Uber and Volvo are already testing their autonomous cars while General Motors and Lyft say their driverless taxis will be on the road within a year.
Image Source: CNET