Automotive manufacturers are competing to invest in ride-hailing startups or online taxi and motorcycle taxi transportation.
tirto.id – Toyota Motor Corporation (TMC) recently announced a new service called “Total-care Service” on Tuesday (18/12). The service, is a set of treatments that work using special platform-based telematics data installed in vehicles. Maintenance services include fleet management, insurance, and care packages.
Total-care Service works by collecting data on vehicles using technology in-vehicle data-transmission devices called TransLog. The collected data is sent simultaneously using another technology called Mobility Service Platform (MSPF).
Both technologies are specifically designed by Toyota. The Total-care Service is not intended for the general public, but for vehicles used for ride-hailing or ride-sharing. The reason, the vehicles used for ride-hailing glide five times farther than private vehicles.
The plan, around 1,500 fleets contained in GrabRentals, vehicle rental services from Grab, which specifically operate in Singapore, will taste Toyota’s Total-care Service for the first time. In 2020, 25 percent of the total Toyota-branded GrabRentals fleet throughout Southeast Asia will be fitted with this service.
Ming Maa, President of Grab, said “combining analytical data with vehicle maintenance will make our rental fleet safer for our driver partners, and help Grab succeed in improving transportation safety standards.
“Toyota-Grab cooperation is not surprising. Toyota is one of Grab’s investors, who have twice buried funds into the only decacorn – worth 10 billion US dollars of startup – in Southeast Asia. In 2017, Toyota invested $ 2 billion in Grab. Then, investment is continued by adding funds of $ 1 billion in 2018.
In automotive, it’s not only Toyota that supports Grab. Honda is the first automotive manufacturer to invest in Grab. In 2016, Honda deposited $ 750 million. After Honda and Toyota, Hyundai became another automotive manufacturer following funding for a startup founded by Anthony Tan. Right in November 2018, Hyundai paid $ 250 million.
The last automotive manufacturer to join Grab is Yamaha. This December they deposited $ 150 million in cash with Grab.
Grab’s formidable opponent in Southeast Asia, Go-Jek, did not escape the splash of the automotive company. Through Astra International, Go-Jek received funding worth $ 150 million. Astra has become the only automotive company supporting Go-Jek.
Securing the Future
Investment from automotive manufacturers for ride-hailing startups has several objectives. One of them is securing their business, at least as experienced by Hyundai and Yamaha. Youngcho Chi, Hyundai’s Chief Innovation Officer, said one reason why Hyundai invested in Grab was because of the mighty Grab in Southeast Asia, and Hyundai, implicitly, wanted to “ride” Grab to accelerate the adoption of their electric vehicles in the region.
Meanwhile, Yamaha, according to Takuya Kinoshita, Chief General Manager of Motorcycle Business Operation Yamaha, in collaboration with Grab to make ride-hailing, was able to implement Yamaha’s latest technology in a new type of transportation system involving user participation. In addition to that, the Japanese motorbike maker promised to facilitate the purchase of motorbikes for those who work as ride-hailing drivers, for the Grab case, the GrabBike driver.
Looking at automotive manufacturers’ financial reports, working with the startup ride-hailing is one of the best steps to save the automotive business in the future. Moreover, the presence of ride-hailing makes the community think again about the demands of having a private vehicle.
In the context of Jakarta, there is a simple simulation about choosing between spending Rp1.12 million per month, if using ride-sharing, or Rp1.02 million per month, if you use a private motorcycle vehicle. In the United States, a study says if a person travels less than 16 thousand kilometers per year, using ride-sharing services such as Uber is a wise choice rather than buying a private vehicle.
Toyota’s annual financial statements implicitly reveal that the company’s performance, in three consecutive years (2015-2017), is mediocre. In 2017, Toyota sold 8.9 million vehicles. That number, slightly up compared to the previous year’s sales of 8.6 million vehicles. And the figure of 8.9 million units in 2017 is the same as the total sales in 2015.
For the mediocre sales performance, Return on Assets (ROA), the ratio used to measure how efficient the company is in managing its assets to generate profits, down. In 2017, Toyota’s ROA stood at 10.6 percent, down compared to the previous two years’ ROA of 13.8 percent and 13.9 percent respectively.
The decrease in ROA, if viewed further, is more due to sales performance. This is because one aspect of company expenditure, namely Research and Development, is not too different compared to previous years. Toyota costs Research and Development of 10.3 trillion Yen.
That number, no different from the costs incurred in 2016 (10.5 trillion Yen) and 2015 (10 trillion Yen). In the end, Return on Equity (ROE), the ratio to measure a company’s ability to generate profits from shareholder investment, dropped. The higher the ROE rate, the more profitable it is for investors. In 2017, Toyota ROE was 10.6 percent, slowing down compared to 2016 (13.8 percent) and 2015 (13.9 percent).
Yamaha’s performance is not different from Toyota. In 2017 they sell motorbikes worth 1 trillion Yen, the same number as in 2015. Meanwhile, the value of sales in 2016 is at 930 billion Yen. Unfortunately, in the financial statements, Yamaha did not specify how many units of motorcycle were sold. The increase in the value of 2016 sales to 2017 could occur because of the increase in sales of high-priced motorcycles in the Southeast Asia region, as they call themselves.
The increase in 2016 sales to 2017 could occur due to the sweet results of the sale of Yamaha’s “Industrial machinery and robots” unit. In 2017, the unit generated sales value of 67 billion Yen. Up 44.2 percent compared to the previous year which was 46 billion yen. In addition to the two reasons above, according to Yamaha claims, in the past three years they have successfully reduced production costs to 60 billion Yen.
Investment in a ride-hailing startup is a step that can be done by automotive manufacturers to save their core business, namely selling vehicle units especially for ride hailing drivers. The number of ride-hailing drivers is quite significant.
Go-Jek claims that they have more than 1 million Go-Ride drivers. While in Singapore, there are more than 23 thousand certified ride-hailing drivers. By working with ride-hailing startups, automotive manufacturers have a big chance of embracing the drivers to buy vehicles from them, especially with special offers including maintenance.