VOLKSWAGON (VW) has announced a $300 million investment in taxi-app Gett in a bid to achieve more sales to cab drivers and says it plans to work with the Israeli ride-hailing service on future projects.
The German company, which saw its reputation and profits take a hit after the diesel vehicle emission scandal last year, expects a “substantial share” of its long term business to come from software and app-based initiatives and as a result is ploughing significant sums into such projects.
With a possible decline in future vehicle sales to the general public, due to the accessibility and growth of on-demand passenger car services like Uber, car manufacturers are looking for different revenue streams and see linking up with ride-hailing apps as a way of targeting cab drivers who are in the market for a new vehicle.
Such amalgamations also offer vehicle manufacturers an outlet for the autonomous vehicles they are currently developing which, in the future, could be working alongside human cab drivers and maybe even one-day dispense with the need for them altogether.
VW is not the only vehicle manufacturer to adopt this approach, with Toyota also announcing last week that it had staked an undisclosed sum in Uber and General Motors investing $500 million in Lyft earlier this year.
The ride-hailing market doesn’t just promise high growth rates – for Volkswagen it also has a big strategic relevance. Ride hailing will be at the centre of our new ‘mobility on demand’ business, which we are building up as the second pillar alongside our classic automobile business
As part of the agreement with VW, plans are being made to launch Gett in Germany and Mr Mueller also suggested that they could challenge Uber Lux at the premium end of the ride-hailing market by introducing a high-end service utilising luxury marques under the VW umbrella – “What is to stop Gett drivers from chauffeuring their customers through the world’s megacities in a Porsche Panamera or an Audi A8 with a special premium version of the app?”