Toyota has invested in car-sharing startup Getaround, expanding its reach into the mobility marketplace.
Toyota Motors Corp. is making an investment in a West Coast start-up company that allows car owners to lend their vehicle to others for a fee.
The Japanese financial press reports that Toyota has invested in U.S. car-sharing company Getaround, which launched its app-enabled, “peer-to-peer” car sharing service in 2013. The move follows upsurge in investment by carmakers in sharing services around the world.
Toyota also has a stake in Uber. Unlike Uber, which acts much like a taxi service with part-time drivers who use their own vehicles, Getaround’s users actually borrow and drive a vehicle from a specific vehicle owner who has agreed to make a vehicle they own available for lease. Getaround insures the leased vehicle and takes a cut of the fee charged for the transaction.
Getaround is now available in cities in California’s Bay Area such as San Francisco, Berkeley and Oakland as well as Portland, Chicago and Washington D.C.
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Toyota will apparently make a $10 million investment through Mirai Creation Investment Limited Partnership, one of its venture capital funds, which will help to shore up their presence in new technology sectors amid growing competition from transport startups.
The automaker created the fund last year with the Sumitomo Mitsui Banking Corp. as an investor. The fund also invests in artificial intelligence and robotics. The growth of the car-sharing business has followed the development of apps for smart phones, which are a key part of the sharing model.
Getaround’s sales pitch is that most of the 250 million cars in the U.S. sit idle for 22 hours per day and putting them into service can enable the owner to make money instead of their vehicle sitting idle.
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The pitch also notes that with the cost of operating a vehicle, averaging $8,000, vehicle owners are able to offset a substantial part of the cost as well depreciation by renting out their vehicle by the hour or the day.
The Getaround website says it already has more than 200,000 vehicles and its other investors also include a number of Silicon Valley venture capitalists.
Automakers believe that the industry is on the verge of a major transition that will include a decline in vehicle ownership but not necessarily the usage of vehicles. They are now looking for strategies that will help meet the demand for car use even as ownership drops.
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Toyota’s investment follows similar moves this year by other automakers who have partnered with car sharing service providers, including General Motors Co and Lyft Inc., and Volkswagen AG and Israel’s Gett.