NAGOYA/FRANKFURT -- Global automakers are increasingly teaming up with ride-hailing services in a bid to secure revenue as consumers' buying habits are changing in an app-fueled, ride-booking world.
On Wednesday, Toyota Motor said it will partner with Uber Technologies, the leading American ride-hailing app provider, through capital and business alliances. Germany's Volkswagen plans to invest $300 million in Gett, an Israeli startup that operates a similar taxi service in the U.S. and Europe.
The tie-ups between long-established car giants and emerging players in the industry will likely foster the development of new technologies, such as autonomous driving, and new services.
Toyota will make the investment through its financial arm, Toyota Financial Services. It will be partly financed by a fund Toyota set up in 2015 jointly with others including Sumitomo Mitsui Banking Corp. The investment is expected to be a few billion yen, which will be less than 1% of Uber's estimated market value of 7 trillion yen (63.6 billion). Uber is privately owned.
The Japanese carmaker hopes to explore areas where it can cooperate with Uber, such as providing its vehicles on lease to drivers in the U.S.
The competition over ride-hailing services has been intensifying. In addition to Toyota, Uber has already secured large investments from Guangzhou Automobile Group of China, Microsoft of the U.S. and some prominent venture capitals. With the support of Volkswagen, Gett hopes to expand its business to better compete with its rival.
In January, General Motors of the U.S. decided to invest $500 million in Lyft, an American ride-hailing app operator, and send officials to the company. With Volkswagen and Toyota now entering the game, the stage is set for a battle over ride-hailing services between the world's big three automakers.
Behind these moves is a growing number of consumers who prefer ride sharing to owning a car. In addition, Uber has been working on the research and development of driverless cars. Such a future may sap overall demand for vehicles, so carmakers are looking for other means of earning money, such as leasing.