Toyota Agrees To Lease Vehicles To Uber Drivers With Flexible Terms

Japan’s Toyota Motor announced that it is making ‘strategic investment’ in on-demand ride-hailing Uber. This looks a win-win deal for the both companies.

This announcement seems to have a good positive impact on investors, as the company’s shares closed up 1.08% to $100.63 on Tuesday. The value of the carmakers’ stock has dropped by over 18% since the start of this year.

As part of the partnership, Toyota will allow Uber drivers to get vehicles on lease with flexible terms. Under new leasing options, buyers can lease their vehicles from Toyota Financial Services and cover their payments through earnings generated as Uber drivers.

The leasing period will be flexible and based on driver needs, the companies said in a joint statement.

Toyota and Uber did not disclose the size of the investment. But the companies say they work together in a variety of other areas, aside from cars sales. The partners may collaborate on self-driving cars technology, on which they are already researching.

The companies also did not disclose countries where they will offer this leasing option. They noted that the leasing will be offered in countries where ridesharing and car sharing business is expanding.

“Ridesharing has huge potential in terms of shaping the future of mobility. Through this collaboration with Uber, we would like to explore new ways of delivering secure, convenient and attractive mobility services to customers,” stated Shigeki Tomoyama, senior managing officer of Toyota Motor and president of the Connected Company, Toyota’s new in-house unit.

Toyota and Uber said they would work together in a variety of other areas, such as developing in-car apps to support Uber drivers, sharing research, as well as establishing a special fleet program to sell Toyota and Lexus vehicles to Uber.

Reuters reported that Uber is making investment in autonomous technology, while Toyota is planning to spend $1 billion through 2020 in research and development of artificial intelligence (AI) and robotics to help develop self-driving cars. Toyota is also a new research labs in the United States.

Ride-Sharing Business Attracting Big Companies

German automaker Volkswagen on Tuesday also announced investing $300 million in Gett, a smaller but fast growing ride-sharing company in Europe.

Earlier this year, General Motors (GM) invested $500 million in Lyft, which is Uber’s rival in the U.S. Working with Lyft, GM plans to develop an on-demand network of self-driving cars.

The U.S. tech giant, Apple, recently announced that it is making $1 billion investment in Chinese ride-hailing service Didi Chuxing. This was seen as a political move by the tech company to its cement its presence in China, where it has been dealing with a lot of problems.

Ford Motor did not jump into the ridesharing business. But it seems that the company is looking at partnerships to expand beyond manufacturing and selling cars.

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