Volkswagen, Toyota invest in digital mobility

May 25, 2016 // By Christoph Hammerschmidt
The world’s two largest car manufacturers, Volkswagen and Toyota have independently acquired major holdings in a promising business that however could negatively affect their business model: Online ride providing.

While Toyota has invested an undisclosed amount into passenger transport services market leader Uber Technologies, Volkswagen spent $300 million to buy what it calls a strategic stake into Uber competitor Gett who claims to be the European market leader in on-demand transportation. The German carmaker says he intends to generate “a substantial share of future sales revenue with new business models”. Such business models will be based on digitally integrated mobility services. According to Volkswagen, the ride-hailing market has the greatest potential in on-demand mobility and at the same time it will create the technological platform for developing tomorrow’s mobility business models. “Alongside our role in the automotive business, we aim to become a world-leading mobility provider by 2025”, said Volkswagen CEO Matthias Müller.

 

Gett is currently offering its mobility activities in more than 60 cities worldwide, including London, Moscow and New York. In London alone, half of all the taxis known as “black cabs” use Gett’s mobility platform. Much in contrast to Uber, Gett’s business model is based exclusively on licensed drivers holding a permit to carry passengers.

 

Gett’s app enables users to book on-demand rides instantly or pre-book rides for later. The underlying technology platform leverages big data, predictive algorithms and artificial Intelligence – something into which Volkswagen is currently investing massively. As recently as two weeks ago, the carmaker announced that it bought into the German Research Centre for Artificial Intelligence (DFKI) in Kaiserslautern, certainly one of the world’s most respected and largest AI research entities. Focus topics of the DFKI are autonomous driving, robotics, and digital manufacturing, and one of the first joint projects of DFKI and Volkswagen will be further developing the ROCK software framework aiming at close collaboration between humans and robots.

 

These investments are regarded to some extend as a reaction to the Volkswagen exhaust gas scandal (which in the meantime has spread to half of the European automotive industry