CRUISING

Automakers have chosen sides in the ride-hailing wars

Obsession
Getting There
Obsession
Getting There

The strategic investments were flowing on Tuesday (May 24), with two automakers announcing they’d taken stakes in ride-hailing companies. First was Volkswagen, which committed $300 million to Gett (formerly GetTaxi), a ride-hailing and black cab company whose biggest markets include London, Israel, and Moscow. Next was Toyota, which invested an undisclosed amount in Uber and announced a “memorandum of understanding” to “explore collaboration … in the world of ridesharing in countries where ridesharing is expanding.”

Tally that with General Motor’s $500 million investment in Lyft, and you’ll see that sides are quickly being chosen as traditional car companies place their bets on the on-demand and autonomous future.

Right now, the most concrete aspects of Toyota’s partnership with Uber are the products the two plan to market to drivers: leasing options, and apps that offer on-trip support. Toyota also says it will set up a “special fleet program” to sell vehicles to Uber. Then there are vaguer goals: “sharing knowledge,” “accelerating … research efforts,” and “collaboration in a variety of other areas.”

Meanwhile, Gett CEO Shahar Waiser says the company will use Volkswagen’s investment to “accelerate its expansion to the rest of Europe, and strengthen its position in New York City.” VW is looking to Gett to help it provide “integrated mobility solutions.”

Mobility is very much the new buzzword for automakers, who are positioning themselves for a future where people simply don’t buy cars the way they used to. The transition has already begun. Millennials, burdened by debt and lingering effects of the Great Recession, are significantly less likely to purchase cars than members of GenX. When GM threw half a million dollars at Lyft and launched its Zipcar-esque service Maven in January, the automaker declared itself “at the forefront of redefining the future of personal mobility.”

That shift will only be accelerated by driverless technologies, which automakers and ride-hailing companies alike are rushing toward. Uber last week released a photo of one of the self-driving cars it’s testing in Pittsburgh, Pennsylvania. Volvo has designated 100 autonomous cars for testing in China. General Motors and Lyft say their driverless taxis will be on the road within a year (albeit with a human initially behind the wheel).

Volkswagen and Toyota are making similar strides. In March, VW’s Müller said the company would “be making a massive effort to promote piloted driving … investing with the aim of bringing these technologies to market faster than the opposition.” Toyota has committed to spending at least $1 billion on a driverless research facility in Silicon Valley, and aims to have autonomous vehicles cruising highways by 2020.

In short, both the Uber-Toyota and Gett-VW partnerships are a familiar story: ride-hailing companies have the on-demand networks but could use a hand with vehicle technology. Automakers are working on those technologies, but worried about finding the consumers who will pay for them. Even Uber, which has so far taken an adamantly go-it-alone stance, apparently sees the benefits of teaming up.

home our picks popular latest obsessions search