People don’t want cars, they want rides. Just months after GM poured money into Lyft (the one with the pink mustache), Toyota and Volkswagen both said today they were joining up with other ride-hailing rivals. In VW’s case, it’s investing $300 million in Israeli ride-hail startup Gett. Toyota, meanwhile, is partnering with UBER.
Clearly Automakers have Silicon Valley envy. Startups are transforming the way people move around cities. In order to stay relevant, car companies are trying to show they understand that on-demand services have changed consumer behavior. Driving yourself around in a car you own, it turns out, isn’t the only way to get around anymore. A trend that’s likely to become only more pronounced when the cars start driving themselves.
To be sure, the actual details provided by the companies about how these joint efforts will work have been scant. Toyota did not disclose how much money it invested in UBER. The two companies merely said they had entered into a “memorandum of understanding” to explore a collaboration. The one concrete detail is that Toyota will create new leasing options that allow drivers to cover their payments through their UBER earnings.
But for car companies, the on-demand ride market is just a first step toward a more radically altered future dominated by autonomous vehicles—vehicles whose brains are powered by Silicon Valley tech under development by the likes of Google, Tesla, and UBER itself.
But how will people actually use self-driving cars on the road? Though one likely scenario is they’ll use their phones to summon them for a ride. Volkswagen says Gett’s big-data technology and predictive algorithms could serve as a foundation for a viable on-demand autonomous car operation. Toyota and UBER are vaguer, saying only that the partnership would accelerate their research efforts. But it’s not hard to see where this is going, especially in light of Toyota’s own move to hire an artificial intelligence and robotics research team late last year.
Maybe on-demand rides are it. Ride-hailing still has a long way to go before people stop buying cars in favor of just summoning rides. But that future could come, and automakers know it