Volkswagen invests $300m in taxi app

Volkswagen has put $300m into Israeli taxi start-up Gett on the same day Toyota announced an undisclosed investment in US ride-hailing app Uber, in the latest sign of carmakers placing bets on the future of personal transport.

VW’s investment, which more than doubles the amount of funding raised by Europe’s biggest taxi-hailing app, comes months after General Motors injected $500m into US ride-hailing app Lyft.

Toyota’s investment in Uber came as the two groups agreed to provide leasing arrangements for Uber drivers. Toyota’s Prius hybrid has long been a popular choice for Uber drivers because of its fuel efficiency, the Financial Times reports.

Under the VW deal, the German carmaker and Gett will form a “strategic partnership” to share data and work on future projects. VW will offer on-demand ride services to business customers, while Gett drivers will be offered discounts on VW cars to use as taxis.


Carmakers are grappling with the rise of “mobility service” providers such as Uber, which some in the industry fear will lead to a long-term decline in personal car ownership.

A number of car companies have launched or are testing ride-sharing schemes, while GM, VW and Toyota have now made investments directly into ride hailing technology start-ups.

VW said it wanted “to generate a substantial share of its future sales revenue from new business models focused on mobility services”.

Matthias Muller, chief executive, said the partnership “marks the first milestone for VW on the road to providing integrated mobility solutions”.

He added: “We aim to become one of the world’s leading mobility providers by 2025.”

The carmaker is grappling with the fallout from the emissions scandal, where it admitted to installing cheating software on 11m cars worldwide.

In the US it has offered to buy back almost 500,000 cars and, on Tuesday, said it was “on track” to offer a technical solution for the vehicles by the deadline of June 21.

Toyota did not disclose the size of its investment in Uber, which was valued at $62.5bn in its most recent fundraising round last December. Uber has raised more than $10bn from investors including Google Ventures, Letter One and Fidelity Investments.

Uber’s other carmaker investors include Guangzhou Auto, which has backed Uber China, and Tata, whose Tata Opportunity Fund put money into Uber global.

“We look forward to collaborating with Toyota in multiple ways going forward, starting with the expansion of our vehicle financing efforts,” said Emil Michael, Uber’s chief business officer.

Gett has signed up about 100,000 cars globally with more than 11,000 in London. Unlike Uber and Lyft, its uses only established fleets and drivers, such as black cabs in London.

Its technology also extends to logistics and deliveries.

Shahar Waiser, Gett’s founder and chief executive, told the Financial Times that the VW investment would allow the company to expand its business in New York and move into more cities.

The investment brings the total funds raised by the company to more than $520m but Gett declined to comment on its valuation.

Mr Waiser set up the business as GetTaxi in 2011 but changed its name in 2014 as it moved into delivery services. Gett customers can use the service to order everything from pizza to flowers or champagne.
 

Almost a third of the company’s revenues come from corporate customers.

Gett faces stiff competition from the likes of Uber, which has raised $10bn, allowing it to expand quickly worldwide, while offering price cuts that have attracted millions of customers.