On-demand taxis as a permanent alternative to buying cars is a rising phenomenon across the world. The transition of an automobile from being an emotional buy to a white good is worrying a lot of ‘passionate’ carmakers. With the advent of autonomous driving and electric power, we are moving towards a world where the arousing, thrilling aspect of being behind the wheel of a car is increasingly considered as a nuisance or waste of time. It’s only fair then, that some of the largest global car makers look at this boom industry of on-demand cabs as the new order and invest their money in it rather than wish it away. Toyota Motor Corporation, the world’s largest car making business has done just that, showing a keen interest in investing its money in the ride-hailing company Uber, the crown jewel of all startup stories worldwide. The Japanese car maker has invested in Uber through its unit Toyota Financial Services Corporation and Mirai Creation Investment Limited Partnership.
Under the investment agreement, the two companies will create a leasing option for the participating drivers, who would be able to lease cars on convenient terms with Toyota. They would have the flexibility of paying the money back through their earnings from Uber. The two companies have released a joint statement about the development, though the specific details about the size of the investment are still unknown. Toyota’s investment in Uber goes well beyond just providing leasing facility to the drivers, but nothing specific towards that end has been spelled out.
The alliance between Toyota and Uber isn’t something unique to the industry though. JVs between established auto makers, tech giants and promising start-ups are fast becoming the order of the day. Very recently, Apple, which is reported to be developing a car by itself, invested $1billion in Chinese taxi service named Didi Chuxing to consolidate its position in the Chinese market. Another auto giant, Ford is looking at expanding beyond the auto domain, even as new-age car makers like Tesla continue to re-define the industry for the new age.
Is the auto-industry witnessing a churn it has never seen before? Would the change in consumer behaviour wipe some car companies clean? Do share your thoughts on how you see the car industry transforming. We’re always listening to your opinion.