Volkswagen Invests $300 Million in Ride Hailing Service

Volkswagen AG has announced that it has invested $300 million in Gett, a popular ride hailing service in Europe, Russia, and Israel (where it was founded), and which recently broke into New York. Forbes reports that the company claims revenues of $500 million and that they are profitable in their earliest markets.

The company is similar to Uber and  Lyft in that customers can hail a ride at the touch of a button, although they currently promise no surge pricing and their operations are wider ranging than just giving rides. Gett also provides delivery and logistics services.

“The Volkswagen Group and Gett is a great strategic partnership,” says Shahar Waiser, Gett’s founder and CEO. “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,”

Volkswagen AG chairman Matthias Muller adds that the company aims to become a “world leading mobility provider by 2025.”

The move comes among a flurry of investments from major companies in similar services. Toyota recently invested in Uber, while GM invested in Lyft, and Apple invested Didi Kuaidi.

Despite the large investments, what these new partnerships will look like remains to be seen. For General Motors, though, the investment came as a way of selling more cars in urban areas, reports Automotive News. The American giant’s sales have long been bolstered by pick-up and SUV sales in rural areas, while their smaller cars have traditionally done poorly. GM hopes to remedy that with the help of Lyft, which does well in urban areas.

Automotive News also reports that short term leasing plans, designed to appeal to ride-hailing-app-drivers could become a way to generate sales faster than through traditional leases.

Whatever the case is with the partnership between Gett and Volkswagen, more details will come over time.