What motivates automakers to invest in car-sharing and taxi apps image

It only took seven days for the biggest carmakers out there to invest in companies that would typically be considered rivals. BMW is now a shareholder of the carpool-platform Scoop, Volkswagen decided to buy Gett shares, while Toyota chose Uber for its investment.

It all started when GM became a shareholder of the ride-hailing service Lyft a few months ago.

According to the New York Times “automakers have become increasingly concerned about those technologies, and their potential to help people travel easily and cheaply without owning a car — or even without knowing how to drive.”

What is the reason behind these collaborations? The basic ingredient for these businesses to work out: the car. All these apps and car-sharing services would not function if we took the vehicles out of the equation. This way, the before mentioned carmakers become the premier providers for these services to continue existing. The Toyota partnership gives Uber drivers cars at an attractive price, and GM is doing the same thing for Lyft. And we can expect the same to happen for Volkswagen with the Gett service and BMW with Scoop.

Because the term of “ride-sharing” brings to mind the repetitive use of the same vehicle, automakers had to find a way to increase their sales even if it meant accepting they cannot stop the trend of taxis and ride-hailing. That, however, did not guarantee them success. Avis turned the car sharing pioneer Zipcar into a car-rental offering, while Daimler, BMW and Volkswagen launched their own car sharing ventures, but without too much success. As a matter of fact, Volkswagen left its Quicar car sharing services a number of months ago.

Car sales in America are doing well at the moment and so is Uber, and drivers are still looking to buy their own cars. And with Uber asking their drivers to have their own cars, automakers are there to cater for their needs and their own financial growth.