May 25, 2016

Hot Trend: Partnership with Ride-Hailing Services

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By HV

Apple and Didi ChuxingToyota and Uber. Volkswagen and Gett. General Motors and Lyft. What do the couples have in common? Firstly, one is a tech company or an automaker, and the other is a ride-sharing company. Secondly, they are partnering to reshape the global auto industry.

Toyota and Uber enter a new leasing program, which will take place in the U.S. and other markets, except for Japan. Starting in the second half of 2016, Toyota will offer vehicles to Uber drivers in order to get more drivers on the service. All in all, Toyota is investing less than $100 million in Uber.

toyota

Not content with being left behind, Volkswagen, a familiar face with the press since the Dieselgate, announced its own partnership with Uber rival Gett in the form of a $300 million investment. Gett operates in more than 60 countries worldwide, a quality the German automaker deems a great market potential in on-demand mobility. Gett will provide Volkswagen with “technology to expand beyond car ownership to on-demand mobility for consumers and businesses.”

volkswagen

The ride-sharing industry has a unique strength. It holds the key to the future’s mobility business models. And the traditional automakers as well as the tech giants do realize that, and their realization is manifesting a rush in partnership with the ride-sharing companies.

Recently, Apple made a $1 billion investment in Didi Chuxing, Uber’s chief rival in ride-hailing service in China. Not too long ago, General Motors invested $500 million in Lyft, resulting in a car rental service for drivers.

Ford Motor is also eager to join the fray. It is openly looking for partnerships to grow its business beyond manufacturing and selling cars.

It’s interesting to see the destination these companies are heading for. At the end, there will be disruption to take place, changes to come, and surprises to get. Why is that?

uber 2

An Uber user is hailing a ride using the app. Uber is partnering with Toyota to rent cars for drivers.

 

Well, the current ride-sharing industry is doing something no other industry has ever done before. It is disrupting the automobile industry. It makes people, whose routines include owning a car at the age of 18, not wanting to own a car anymore. Why would they want to pay thousands of dollars to purchase a car, and shell out hundreds of dollars every month for gas and insurances? A simple yet effective ride-hailing add makes car ownership obsolete.

And it is indisputably going to make the traditional automakers obsolete as well. These partnerships can be boiled down to an act on survival instinct. By planting a root in the ride-hailing industry, they ensure when the next big innovation from Uber or Lyft rolls out, they will still be around.

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