May 27, 2016 Automakers Befriend Start-Ups Like Uber, Girding Against a Changing Car Culture Posted in BLOG, by GetTaxi team

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SAN FRANCISCO — Automakers are looking toward a technology-driven future, one where they increasingly acknowledge that getting around may not require owning a car.

On Tuesday, two of the world’s largest automakers, Toyota and Volkswagen, said they were stepping up to invest in technology start-ups that are working to change the way people travel by car. Toyota said it had formed a partnership with and invested an undisclosed amount in Uber, the biggest ride-hailing company. Gett, the app popular in Europe, said it was working with Volkswagen, and the automaker was investing $300 million in the start-up.

The alliances are the latest in a string of pairings between technology companies and traditional automakers that are scrambling to reposition themselves. For decades, automakers had abided by the well-worn formula of making bigger and more powerful cars to fuel their growth.

But start-ups like Uber and Lyft and technology companies like Google and Tesla have disrupted that cadence. These companies, mostly located in Silicon Valley, have in the last few years sped the development of self-driving cars, electric vehicles and ride services.

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.

In some American cities, small groups of people are already choosing not to own cars by relying on ride-hailing services like Uber, through which consumers can order a ride through their smartphone, and car-sharing companies like Zipcar, where they essentially pick up a car whenever they need to drive one. Eventually, self-driving cars will be a reality, which would let Uber and others field fleets of driverless vehicles that can operate around the clock and further cut the cost of ride services.

“Ride-sharing has huge potential in terms of shaping the future of mobility,” Shigeki Tomoyama, senior managing officer of Toyota, said in astatement about partnering with Uber. “We would like to explore new ways of delivering secure, convenient and attractive mobility services to customers.”

Karl Brauer, an analyst at the research firm Kelley Blue Book, said there was no sign that car-sharing or ride-sharing — sometimes called “mobility services” — was slowing auto sales today. Auto sales in the United States hit a record high in 2015 and are on the rise this year, and China and other international markets will ensure the global auto market continues to grow.

Nevertheless, auto companies are investing in companies like Uber “to be ahead of the curve” if they do shake up car ownership down the road, Mr. Brauer said. “History has shown that if you wait for the market to decide, you’re dead,” he said.

In January, General Motors invested $500 million in Lyft, the ride-hailing app popular with American users, with a focus on developing networks of autonomous vehicles. Ford Motor is making over its Dearborn, Mich., headquarters into a Silicon Valley-like campus of green buildings connected by self-driving shuttles.

And a few weeks ago, Fiat Chrysler and Google agreed to produce a test fleet of driverless minivans. Both BMW and Mercedes-Benz have started to pilot ride services.

Even other technology companies only tangentially related to automobiles are becoming more involved in ride services. Apple, which is working on its own autos project, said this month it had invested $1 billion in Didi Chuxing, a Chinese ride-hailing company that competes fiercely with Uber.

The scale of ride-hailing as a phenomenon is encapsulated in China. Uber operates in more than 30 Chinese cities with plans to expand to 100 by the end of the year. Didi is in well over 300 cities and towns throughout the country.

Last June, Uber said it had approximately 20,000 regular drivers in the Chinese city of Chengdu alone, on par with the approximately 22,000 drivers in San Francisco and 26,000 in New York at the time.

But global expansion requires capital — lots of it. Companies like Uber have tapped venture capitalists, strategic partners and large institutional investors at the rate of about once every six months to amass enough money to keep introducing operations in new cities. In total, Uber has raised more than $10 billion from several firms to wage its land war across multiple continents.

With the Toyota partnership, Uber gets other perks apart from money. The company, based in San Francisco, which was valued at $62.5 billion in December, plans to expand its vehicle financing program with Toyota, whose cars are among the most popular with Uber drivers. Customers can lease Toyota vehicles through the program and are able to pay down the cost by driving for Uber.

Toyota said that in its work with Uber, the companies would also cooperate on trials in countries where ride-hailing is growing.

The companies also plan to develop in-car apps that support Uber drivers, and to share their knowledge and research, they said.

Volkswagen has been slower to jump on the mobility bandwagon, partly because it has been consumed by an emission-cheating scandal involving its diesel models. After those revelations, Volkswagen replaced its chief executive, about a dozen top managers departed, its VW-brand sales skidded in the United States and it set aside $18 billion to cover scandal-related costs.

Next month, Volkswagen is supposed to detail a plan to buy back or repair about 500,000 diesel models that had the cheating software and were sold in the United States.

About the same time, Volkswagen is also planning to unveil a “Strategy 2025” in which mobility initiatives will play major roles. In April, Volkswagen said it intended to set up a separate mobility company to oversee investments and initiatives on this front.

“We aim to become a world leading mobility provider by 2025,” Matthias Müller, chief executive of Volkswagen, said in a statement.

Shahar Waiser, Gett’s chief executive, stressed the synchronicity his company had with Volkswagen’s European sales, and how the companies were focused on both consumer and business clients. Mr. Waiser said Gett had $500 million in revenue, 30 percent of which came from the company’s 4,000 corporate and business clients, and that it was profitable in some markets.

Gett, which is popular in more than 60 European cities, as well as Moscow and New York, said it planned to use the capital to continue expanding its European operations.

“By now, people realize that the landscape is so big — and every market is so different — there will be more than a monopoly or a duopoly,” Mr. Waiser said. “You will always see two, maybe three major players in this space, wherever you go.”

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May 27, 2016 Volkswagen invests $300M in Gett Posted in BLOG, by GetTaxi team

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  • Volkswagen (OTCPK:VLKAY) and ride hailing firm Gett announce a new strategic partnership. Gett is best known for its presence in Manhattan ($10 Anywhere) and London where its fleet numbers over 10K cars.
  • The deal includes a $300M investment from Volkswagen in the Israeli startup which will be used to fund growth in the U.S. and Europe.
  • Volkswagen has increased its focus on self-driving and mobility technology since the emissions scandal unraveled last year.
  • Earlier today, Toyota and Uber announced a major partnership.
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May 27, 2016 Volkswagen Group invests $300 million in Gett, a ride-hailing startup Posted in BLOG, by GetTaxi team

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Gett, a ride-hailing startup, said Tuesday that it received a $300 million strategic investment from automotive company Volkswagen Group VLKAY, +0.99%Volkswagen is the latest car manufacturer, after General Motors GM, -1.14% to team up with a ride-hailing company. “The partnership with Gett marks the first milestone for the Volkswagen Group on the road to providing integrated mobility solutions that spotlight our customers and their mobility needs.” said Matthias Müller, Chairman of the Board of Management of Volkswagen, in the press release. The recent investment brings Gett’s total funding to more than $520 million, the company said. Gett is available in Russia, Great Britain, Israel and New York City.

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May 27, 2016 Volkswagen (VOW) Invests $300 Million In Gett Ride-Hailing Service Posted in BLOG, by GetTaxi team

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Volkswagen AG made a “strategic investment” of $300 million in ride-hailing service Gett, the German automaker announced Tuesday. The Israeli startup is available in more than 60 cities around the world and had previously raised $220 million in funding.

“Innovative, digitally integrated services covering all aspects of mobility promise very strong growth momentum and huge earnings opportunities in the coming years. The ride-hailing market represents the greatest market potential in on-demand mobility, while creating the technological platform for developing tomorrow’s mobility business models. The Volkswagen Group’s expressed goal is to generate a substantial share of sales revenue from such new business models by 2025,” the company said in a statement.

Volkswagen Chairman Matthias Müller said: “Within the framework of our future Strategy 2025, the partnership with Gett marks the first milestone for the Volkswagen Group on the road to providing integrated mobility solutions that spotlight our customers and their mobility needs.”

Under the deal, apart from sharing data and working on future projects, Volkswagen will offer its business customers on-demand ride services and Gett drivers would get discounts on using Volkswagen cars as taxis, the Financial Times reported.

Shahar Waiser, Gett founder and CEO, said in the statement: “The Volkswagen Group and Gett is a great strategic partnership. The pay-per-ride domain is growing rapidly. In that context, Gett provides VW with the technology to expand beyond car ownership to on-demand mobility for consumers and businesses.”

Gett, which operates in cities like London, Moscow, New York and Tel Aviv, has also diversified into deliveries. Based on its current monthly sales, the company projects an annual revenue of $500 million.

Also on Tuesday, Japanese carmaker Toyota announced an investment of an undisclosed value in Uber. Earlier in the year, General Motors invested $500 million inLyft for 9 percent stake in the company. This month, Apple announced a $1 billion investment in Chinese ride-hailing service Didi Chuxing.

Volkswagen shares closed 2.46 percent higher on the Frankfurt Stock Exchange Tuesday, slightly outperforming the automobile sector index, which rose 2.01 percent, and the broader DAX Index, which climbed 2.18 percent.


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May 27, 2016 Uber Rival Gett Receives $300M in Funding From Volkswagen Posted in BLOG, by GetTaxi team

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Gett Inc., a taxi-ordering application that competes with Uber Technologies Inc., raised $300 million in a strategic investment from German carmaker Volkswagen AG to fund its growth in Europe and New York City.

Gett, based in Tel Aviv, Israel, has offered rides for as low as $1 and expanded its services to include deliveries of goods. The company hired Wells Fargo & Co. to find investors for the round, people familiar with the matter said in February. Volkswagen’s contribution brings total funds raised by Gett to more than $520 million, the taxi service said Tuesday in an e-mailed statement.

Volkswagen made the investment as part of a push to boost digital offerings and move beyond its diesel-engine manipulation scandal. Mobility services promise strong growth prospects and earnings potential in coming years, VW said Tuesday in a statement.

“We aim to become a world leading mobility provider by 2025,” VW Chief Executive Officer Matthias Mueller said in the statement. “Within the framework of our future Strategy 2025, the partnership with Gett marks the first milestone for the Volkswagen Group on the road to providing integrated mobility solutions that spotlight our customers and their mobility needs.”

With operations in over 60 cities worldwide, including London, Moscow and New York, Gett is a major ride-hailing provider and services will be expanded further as part of the alliance with VW. Last month, it completed its bid to buy London’s Radio Taxis in a move that brought Gett’s car fleet in the city to 11,500, a number the company says amounts to half of all licensed taxis in the city.

“This is a terrific boost for us,” said Nahshon Davidai, Gett’s chief marketing officer. Gett’s revenue grew 300 percent in 2015 and is projected to reach $500 million globally this year, the company has said, while Uber generates about $1 billion annually. The partnership with Volkswagen gives Gett “access to geographies and markets in which we have strong overlap,” he added.

Expanding digital services in connected cars is a cornerstone of VW’s strategy through 2025, which will be presented in mid-June. More than 250 employees are developing the plan, which will comprise eight key initiatives across the group, Mueller said last week at an internal management meeting at the carmaker’s Wolfsburg, Germany, headquarters.

Volkswagen is not the first car manufacturer to get involved in the ride-hailing business. General Motors Co. bought a 9 percent stake in Lyft for $500 million in January and Apple Inc. made a $1 billion investment in China’s Didi this month.

Completion of the transaction is subject to merger control clearance by antitrust authorities.

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