Uber and Toyota Motor Corp (ADR) have formed a partnership to create new flexible leasing options for the ridesharing company’s drivers. Following the announcement, Toyota shares are trading in the green on Wednesday.
Leasing Program On Trial
The Uber and Toyota will offer the program on a trial basis in countries where ride-sharing is growing. The partnership will take various factors into account such as regulations, business conditions, and customer needs.
Drivers will be to purchase vehicles on lease from Toyota Financial Services. For the repayment for the loan, they can use earnings generated from the Uber network. “The leasing period will be flexible and based on driver needs,” Toyota said in a statement.
The partnership hopes to provide new leasing options by the second half of 2016, Automotive News reported, citing a spokesman.
“Ridesharing has huge potential in terms of shaping the future of mobility. Through this collaboration with Uber, we would like to explore new ways of delivering secure, convenient and attractive mobility services to customers,” stated Shigeki Tomoyama, senior managing officer of Toyota Motor and president of the Connected Company.
Toyota Motor Corp (ADR) and Uber plan to collaborate on developing in-car apps and sharing their research. The partners will also cooperate in the establishing of a special fleet program to sell Toyota and Lexus vehicles to Uber drivers.
Uber Problem in China
The U.S.-based ride-sharing company seems optimistic about its business in China, which is a difficult market due to lack of rules for the ride-hailing sector. It is expected that China will give ride-hailing businesses a legal status this year. There are some reports that Chinese police are cracking down on taxi hailing drivers. Currently, it is against the law for a private car, such as one driven by an Uber driver, to be used for a paid-for ride in China, Motherboard reported.
Apple Inc. is also betting on the ride-sharing business. The tech giant announced a $1 billion investment in Didi Chuxing, a ride-hailing service similar to Uber operating in China. Alphabet Inc , mother to Google, is also looking to get a foothold in the ride-sharing business. The firm recently unveiled the pilot program of its ride-sharing app with a pilot program for folks in the San Francisco area. The new program will see several thousand workers pooling a ride to and from work using the Waze navigation app.
In other Uber news, Keith Chen of the company’s research team revealed that users are more likely to pay surge pricing if their phone battery is low. When the demand for Uber rides surpasses the supply of vehicles, surge pricing occurs at a certain multiplier such as 2x or 3x, Forbes reported.
Keith Chen, who leads economic research at Uber, recently said that the ride-sharing company’s users are more likely to pay for surge pricing if the battery is low on their phones.
Shares of Toyota Motor Corp (ADR) were trading up 1.98% as of 2:30PM EDT.