Toyota Motor Corp said it would invest in on-demand ride-hailing company Uber, 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.
The strategic alliance between the Japanese carmaker and Uber Technologies Inc will begin with flexible vehicle leasing terms for Uber drivers but the two also plan to exchange knowledge and work together to accelerate their research efforts.
Financial terms were not disclosed.
The deal is expected to help Toyota keep tabs on ride-hailing markets worldwide and has the potential to help it strengthen its position in China, where it lags Volkswagen and General Motors.
“Thinking of it in a China context is important because that’s probably the fastest growing ride hailing market in the world.
For Toyota to have a piece of that would be significant,” said James Chao, Asia Pacific head for IHS Automotive.
The recent flurry of deals also reflects the desire of automakers to avoid becoming bystanders if a significant number of consumers around the world choose to forego vehicle ownership and buy transportation by the mile or the minute.
Although Toyota and Uber did not offer much in the way of details on potential areas for research collaboration, both are researching self-driving cars as well as “mobility solutions” that allow travelers to seamlessly connect to different modes of transportation through apps.
In other deals, GM invested $500mn in Lyft, Uber’s main US rival, this year while Volkswagen also announced on Tuesday a $300mn investment in Gett, a smaller ride-sharing company.
This month Apple Inc got into the game, investing $1bn in China’s top ride-hailing service Didi Chuxing.
Although that has been mainly 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 car.
Uber is investing in autonomous technology, including mapping, while Toyota has been opening research labs in the United States, spending $1bn through 2020 in research and develop for artificial intelligence and robotics to help develop self-driving cars.
Doing away with drivers would greatly reduce the cost of ride-hailing services, and Toyota could be angling to be Uber’s preferred supplier of such cars in the future, Chao at IHS said.
GM has said its investment in Lyft was part of plans to develop an on-demand network of self-driving cars that they believe will first reach consumers as part of a ride-sharing service.
GM executives have also said Lyft could serve as a platform to launch the automaker’s Chevy Bolt, an electric car slated to hit the market late this year.
Ford Motor Co 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 $16mn in extra funding to help develop self-driving taxis in Singapore.
Toyota is making the Uber investment through its unit Toyota Financial Services Corp and Mirai Creation Investment Limited Partnership.