Who ever thought that a simple concept like Uber and Lyft would become a global phenomenon and be in demand by even the major car manufacturers? What is even more fascinating is the fact that both Uber and Lyft are working on going from cars with drivers to driverless cars. To make this happen faster, car manufacturers are getting in on the action – but it is hardly a ‘free ride.’ Earlier today, German automaker Volkswagen said they would invest $300 million in Gett – a smaller ride-sharing company. Four months ago, General Motors invested $500 million into Lyft, Uber’s chief rival, to develop an “on-demand network of self-driving cars.” Toyota said today that they would partner with Uber to explore ride-sharing services – not only in the possibility of driverless cars but also set up new leasing options where Uber drivers can lease their vehicles from Toyota. This deal will involve Toyota Financial Services in a setup that would allow the lease payments to be paid back with the earnings the drivers generate driving their Uber passengers.
GM also bought up Sidecar – they were Uber before Uber, but just could not compete – for $30 million to get into the ridesharing business. This collaboration seems to be a trend as Ford is also looking to partner up and expand beyond just building and selling cars. Ford’s Chairman Bill Ford said, “you’ll hear more from us” later in the year. Toyota moves marks a way for them to invest heavily into Uber by using its Financial Services arm and Mirai Creation Investment Limited Partnership. This way, Toyota has both invested in Uber’s service, but they can also sell vehicles to help Uber expand their driving pool, and aid driver wannabees in financing a car.
Not to be left out of a great business opportunity, Apple is investing $1 billion in the Chinese ride-hailing service Didi Chuxing. This investment is certainly a political move as Apple continues to build its presence in the ever-growing Chinese smartphone market – nicely played, Apple. Google, on the other hand, is still proceeding with their driverless cars, as are Ford and Mercedes-Benz. The car companies realize that if more people start to rely on ridesharing, those people have no reason to buy a car. This scenario could save a lot of money for the consumer in payments, maintenance, paying for gas and insurance. With fewer cars on the road, this could also help with the environment and make driving more pleasurable. The future is wide open - who would have ever thought that Uber would be worth $60 billion dollars? It will be interesting to see just where ridesharing goes in the next 5 to 10 years.