Toyota Motor Corp to invest in on-demand ride-hailing company Uber

United States: In lieu of the move by automakers entering in alliance with potential upstart rivals as partners, customers and sources of valuable data, Toyota Motor Corp plans to invest in on-demand ride-hailing company Uber.

However, the size of the investment has not been disclosed by Uber and Toyota, yet they would be sharing knowledge and accelerating their respective research efforts.

Toyota and Uber are currently working on self-driving cars and other technologies to connect travellers with various modes of transport. Uber is investing in autonomous technology, including mapping; while Toyota has been opening research labs in the United States, thereby, investing around USD1 billion through 2020 for research and development of artificial intelligence and robotics to aid the development of self-driving cars.

Toyota is investing in Uber through its financial services division Toyota Financial Services Corporation and Mirai Creation Investment Limited Partnership.

German car giant Volkswagen has already announced an investment of USD300 million in Gett, a smaller ride-sharing company; while, General Motors has invested USD500 million in Uber's rival, Lyft, to develop an on-demand network of self-driving cars. Moreover, in order to strengthen its presence in Chinese market, Apple has invested USD1 billion in Chinese ride-hailing service Didi Chuxing

According to a recent report published by TechSci Research, “United States Radio Taxi Services Market Forecast and Opportunities, 2021” The United States radio taxi services market has an organized industry structure comprising of traditional medallion taxis and For-Hire Vehicles (FHVs). Due to high cost involved in procuring medallions and operating taxi services under medallion based taxi model, taxi drivers find it easy and economical to join private radio taxi service providers, thereby increasing the market share of For-Hire Vehicles (FHVs) in the radio taxi fleet of the country.

TechSci Research is of the view that this move by Toyota and various other car manufacturers would help the radio taxi services market to grow at an unprecedented rate. Also, high cost of purchasing a medallion and easy vehicle financing by Toyota would increase the market share of For-Hire Vehicles (FHVs) in the country, thereby aiding the ride-hailing service companies to capitalise on the rising demand for radio taxis in the country.