Toyota Motor Corp. and Volkswagen Group are jumping into the rideshare game with strategic investments, the companies announced today. Through a collaboration with Uber, Toyota Financial Services will launch a new leasing program as part of a broader initiative to boost its mobility efforts. Volkswagen, meanwhile, will invest $300 million in global ride-hailing provider Gett.
As part of its partnership with Uber, Toyota will create new flexible leasing options for car purchasers to cover their lease payments through earnings generated as Uber drivers. The alliance builds on Uber’s Vehicle Solutions program, which provides Uber drivers with exclusive discounts and financing options.
Toyota entered into a memorandum of understanding with Uber to include trials in countries where ridesharing is expanding, according to a company release. Toyota and Uber will also look to develop in-car apps and establish a fleet program to sell Lexus and Toyota vehicles to Uber drivers.
The partnership comes on the heels of TFS’s announcement at the inaugural Auto Finance Innovation 2016 earlier this month that TFS is “closely” watching mobility trends in the auto finance space. Chris Ballinger, the captive’s chief financial officer and global chief officer of strategic innovation, told attendees that TFS expects to announce “soon” its plans in the mobility space, likely with flexible leasing “either through partnerships or by trying to build that ourselves.”
Consumers’ ability to monetize their vehicles to create added income streams is a “huge” opportunity for the industry, Ballinger added, noting that the income can potentially qualify consumers for a loan because it becomes an alternative to a traditional credit score. At AFI, Ballinger also hinted at plans to allow borrowers to work off past-due accounts by driving for rideshare companies, like Uber.
TFS is not the first lender to partner with Uber. Last year, nonprime lender Westlake Financial Services inked a similar deal, in which a portion of a driver’s income was automatically debited toward his auto loan if financed by Westlake. In recent weeks, though, the partnership has begun to phase out as a result of a volume slowdown caused by the launch of Uber’s own leasing company, Casey Harmon, Westlake’s senior vice president of corporate development, told AFN last month.
Meanwhile, VW has placed its bets on Gett, a rideshare business that operates in 60 cities and is popular in Europe. Gett provides on-demand rides in cars with licensed drivers and no surge pricing.