Volkswagen and Toyota are investing in ride-sharing companies in the latest in a wave of high-profile moves by automakers to embrace their potential upstart rivals as partners, customers and sources of valuable data.
Toyota will invest in on-demand ride-hailing company Uber, while VW has made a $300 million strategic investment in Gett, a taxi-ordering application that competes with Uber.
VW's investment in Gett as part of a push to boost digital offerings and move beyond its diesel-engine manipulation scandal. The automaker said it aims to generate a "substantial" share of sales revenue from new business models by 2025.
The ride-hailing market represents the "greatest market potential in on-demand mobility, while creating the technological platform for developing tomorrow's mobility business models," VW said in a statement.
Expanding digital services in connected cars is a cornerstone of VW's new business strategy, which will be presented in mid-June. More than 250 employees are developing the plan, which will comprise eight key initiatives across the group, CEO Matthias Mueller said last week at an internal management meeting at the carmaker's headquarters in Wolfsburg, Germany.
Gett, which is based in Tel Aviv, Israel, is available in more than 60 cities worldwide, including London, Moscow and New York. Last month, it completed its bid to buy London's Radio Taxis in a move that brought Gett's car fleet in the city to 11,500, a number the company says amounts to half of all licensed taxis in the city.
VW's investment will help Gett fund its growth in Europe and New York. Gett has offered rides for as low as $1 and expanded its services to include deliveries of goods. VW's contribution brings total funds raised by Gett to more than $520 million, the taxi service said Tuesday.
Gett's revenue grew 300 percent in 2015 and is projected to reach $500 million globally this year, the company has said, while Uber generates about $1 billion annually.
Toyota and Uber did not disclose the size of Toyota's investment, but said their alliance will go beyond just vehicle sales. The companies will create new leasing options in which Uber drivers can lease vehicles with flexible terms from Toyota Financial Services and cover their payments through their Uber earnings, they said in a joint statement.
GM, Ford moves
VW and Toyota are not the first automakers to get involved in the ride-hailing business. General Motors has bought a 9 percent stake in Lyft for $500 million. Ford Motor is looking at partnerships to expand beyond manufacturing and selling cars, with Chairman Bill Ford saying on Monday that "you'll hear more from us" as the year progresses.
On Tuesday, startup NuTonomy, backed by Bill Ford's venture capital arm Fontinalis Partners, raised $16 million in extra funding to help develop self-driving taxis in Singapore.
Automakers and mobility upstarts are investing in autonomous vehicle technology which they believe will power fleets of self-driving cars in future.
Apple has invested $1 billion in Chinese ride-hailing service Didi Chuxing, which was seen as a political move by the technology giant to cement its presence in the crucial Chinese market. Apple is also believed to be studying the development of a self-driving car.
Bloomberg and Reuters contributed to this report
