Not wanting to be left out of the alternative revenue streams party, Toyota Motor Corporation has invested $1 billion into a Singapore-based ride-hailing and ride sharing company you’ve probably never heard of.
Grab Holdings Inc., known to consumers simply as Grab, offers numerous car-based transportation options and services in Southeast Asia. Don’t have a car? Borrow one from Grab. Hail one operated by Grab.
In the future, it seems likely that car will be a Toyota.
The investment is the clearest signal so far that Toyota president Akio Toyoda is serious about transforming the automaker into a “mobility” company, though a one-time cash drop on another mobility company is a drop in the bucket, considering Toyota’s status as the world’s number one seller of cars and trucks. Still, it’s the largest such investment from the company to date.
In the U.S., General Motors and Fiat Chrysler have much stronger ties to the mobility market. GM invested in ride-hailing company Lyft two years ago, and now owns its own autonomous mobility firm, Cruise. FCA’s partnership with Google-owned Waymo recently saw the tech arm request 62,000 Chrysler Pacifica Hybrids for future ride-hailing duties.
These partnerships also lead to technology sharing, benefitting automakers looking to get a leg up on their rivals. Grab certainly knows a lot about app-based services — besides its preexisting services, the company recently took over Uber’s operations in Southeast Asia.
While Toyota hasn’t described the size of the stake it purchased in Grab, one of its executives will sit on the company’s board.
“A board seat almost guarantees that Grab will buy cars from Toyota,” said Steve Man, a Bloomberg Intelligence analyst. “The $1 billion that Toyota is paying for a stake is not a high price for selling more cars and whatever other self-driving technologies.”
Grab opened an engineering center in Seattle in 2016, bolstering work performed at its other R&D centers in Singapore and China.