Toyota Motor Corp said on Tuesday 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.
Toyota and Uber will create new leasing options in which Uber drivers can lease vehicles with flexible terms from Toyota Financial Services and cover their payments through their Uber earnings, the companies said in a joint statement.
Toyota and Uber did not disclose the size of the investment, but the alliance will go beyond just vehicle sales.
The companies said they would be “sharing knowledge and accelerating their respective research efforts.” Both Toyota and Uber are researching self-driving cars and other technology that connects travelers to different modes of transportation.
Traditional automakers are racing to ally with ride-sharing partners 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.
Technology companies such as Apple, Alphabet’s Google and startups such as Uber have attracted significant investments, and in Uber’s case, a valuation estimated to be higher than General Motors Co’s, by positioning themselves as a threat to the vehicle market status quo.
Moreover, both carmakers and mobility upstarts are investing in autonomous vehicle technology which they believe will power fleets of self-driving cars in future.
Uber is investing in autonomous technology, including mapping, while Toyota has been opening research labs in the United States, spending $1 billion through 2020 in research and develop for artificial intelligence and robotics to help develop self-driving cars.
Earlier on Tuesday, German automaker Volkswagen announced a $300 million investment in Gett, a smaller ride-sharing company.
Earlier this year, GM invested $500 million in Lyft, Uber’s main U.S. rival, to develop an on-demand network of self-driving cars. GM executives have 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.
Uber’s alliance with Toyota also follows hard on the heels of Apple’s $1 billion investment in Chinese ride-hailing service Didi Chuxing, which was 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.
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 $16 million in extra funding to help develop self-driving taxis in Singapore.
Toyota is making the Uber investment through its unit Toyota Financial Services Corporation and Mirai Creation Investment Limited Partnership.