Toyota Motor Corporation and Uber Technologies Inc. announced their new strategic alliance on Tuesday and partnership plans to expand the number of drivers available out there ready to pick up riders. The popularity of ride-hailing services has carmakers wanting to ensure their vehicles are the ones being driven and some, like Toyota, taking a financial interest.
The deal involves the Japanese auto manufacturer investing an unspecified amount in Uber, the largest ride-hailing service worldwide, and offering new, flexible leasing options for its drivers beyond its current program. The hope is that the car-leasing possibilities in various countries will encourage more people to sign up as Uber drivers and use the resulting fares to pay for the lease. While the car maker’s investment in Uber is not sizable or controlling, the plans unveiled today do ensure that both companies have a stake in their partnership’s success.
The car company and transportation app firm’s partnership is just the latest one being announced that pairs technology companies and the auto industry:
- General Motors invested $500 million in Lyft early in 2016, and that transportation service is testing a program that lets drivers rent GM autos reportedly for $99 per week and 20 cents per mile. They are also working on plans to test self-driving Chevrolet Bolts as a taxi service.
- Uber struck a deal with Enterprise Rent-a-Car that allows for rentals at $210 per week in select larger cities throughout the U.S.
- Apple Inc. invested $1 billion in Didi Chuxing Technology, which is China’s chief Uber competitor.
- Volkswagen invested $300 million in Gett, the Tel Aviv-headquartered service offering rides in cities across Europe.
- Daimler AG has also invested in start-ups developing transportation alternatives services a couple of years ago.
For the ride-sharing firms, the deals offer additional capital and, in most cases, cars. The programs help put more drivers on the roads.
For the auto industry, there is a realization that car usage and ownership patterns are changing. Clearly, the boom in people ride-sharing and convenience it offers is a potential threat to their sales long-term. It could mean fewer people buying cars in urban areas.
“Ridesharing has huge potential in terms of shaping the future of mobility,” commented Shigeki Tomoyama, who is the auto company’s senior managing officer, in the firm’s press release announcing the partnership. “Through this collaboration with Uber, we would like to explore new ways of delivering secure, convenient and attractive mobility services to customers,” he added.
Uber management also made a statement: “We’re excited that Toyota, the largest automobile manufacturer in the world, is making a strategic investment in Uber as part of a broader global partnership,” noted Uber’s chief business officer, Emil Michael. He acknowledged how popular their Japanese partner’s vehicles are with Uber drivers worldwide. Michael added, “We look forward to collaborating with Toyota in multiple ways going forward, starting with the expansion of our vehicle financing efforts.”
Through this partnership agreement, Toyota and Uber also announced that they plan to collaborate in other areas too, such as developing in-car applications for use by Uber drivers, sharing their respective research efforts, and inaugurating a Lexus and Toyota fleet program for Uber drivers.
Written and Edited by Dyanne Weiss
Toyota USA Newsroom: Toyota and Uber to Explore Ridesharing Collaboration
Wall Street Journal: Toyota and Uber Reach Investment, Lease Partnership
Bloomberg: Toyota Will Invest in Uber, Team Up on Auto-Leasing Program
Photo courtesy of Toyota Motor Corporation