The ride-hailing market worldwide can be pretty cutthroat. Much has been said of the travails suffered in Southeast Asia by Uber, the ride-hailing giant. Nigh-invincible on its stateside turf, it found itself outperformed by similar, local companies. These days Southeast Asian ride-hailers tend to rely on Grab, a tech company based in Singapore. They were the ones that finally put Uber SEA out of its misery by acquiring their assets for a multi-billion amount. Remarkably, Grab is about to make that investment back, in a way, by getting invested on in turn by one of the top automakers in Japan.
CNN Philippines reports that Toyota has just put an investment this week amounting to $1 billion on Singapore’s GrabTaxi Holdings Pte. Ltd. It was immediately recorded as the biggest investment ever made by an automobile manufacturing giant on a ride-hailing service. And this is not actually the first time; Toyota’s trading division already invested an amount never publicly disclosed on Grab the year before, so a relationship is already established. The two companies revealed the latest deal between them this Wednesday, June 13. Interestingly, Toyota also made a 2016 investment on Uber, though this is dwarfed by the Grab one.
In Toyota’s announcement, Executive Vice President Shigeki Tomoyama remarked, “I am delighted that we are strengthening our collaboration, which utilizes Toyota’s connected technologies.” This is because there are other arrangements attached to the deal. For starters, a Toyota executive now joins the board of directors for Grab, followed by another man joining the ride-hailing startup as a full executive. Next, the Japanese automaker will commence tech-sharing with Grab, making the service’s vehicles a test-bed for car software that is “smart” enough to alert drivers when their automobiles are due for maintenance checks. Grab for its part will use this round of investment for further developing two features of their platform: mobile payment and food delivery.
Singapore’s Grab is well on its way to dominance over all other ride-hailers operating in Southeast Asia, with its app good for getting transport not just in its home country but in Malaysia, Indonesia, the Philippines, Thailand and most of Indochina. This was bolstered by their buying up all local assets left by Uber in their failed bid to establish a foothold in the region. Other carmakers have already invested in Grab before Toyota, but none near as much: Honda and Hyundai, for undisclosed amounts.
Photo edit courtesy of Fintech News Singapore