Toyota pours $1 billion into ride-hailing firm Grab

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Grab said it plans to work with its new investor "to create a more efficient transport network that will ease traffic congestion in Southeast Asia's megacities" and help its drivers increase their income.

The investment by Toyota is the largest-ever by an automaker in the global ride-hailing sector, the six-year-old start-up said in a statement on Wednesday.

"Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", Shigeki Tomoyama, Toyota executive vice-president, said in the release.

A Toyota executive will be appointed to Grab's board and another Toyota representative is being tapped to be an executive officer at Grab, the company said. It has also backed Japan Taxi, an Uber rival run by the chairman of Tokyo's biggest taxi operator.

Both companies have already begun collaboration in the field of connected vehicles by, for example, providing driving-data-based automotive insurance for Grab's rental fleet in Singapore through local insurance companies.

Grab will collaborate with Toyota on how connected vehicle services on the Toyota Mobility Service Platform (MSPF) - such as user-based insurance, financing program and predictive maintenance - could enrich the Grab experience for drivers on the Grab platform.

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Grab says that this investment allows it to further expand its range of O2O services, such as GrabFood and GrabPay, deeper into the region.

Other carmakers such as Daimler, BMW and Ford have dabbled in investing and developing their own ride-hailing services.

Toyota, the world's most valuable carmaker with a market capitalization of about $221 billion, has sought partnerships with a pantheon of tech companies including Amazon Inc. and Apple Inc.in a bet that data will be a key part of its future.

There has been speculation for several years about a potential IPO for Grab, but in April, CEO Anthony Tan told CNBC it was just one of "many options" for the company.

From its beginnings as a taxi-booking app - its original name is GrabTaxi - the company is morphing into an online platform for connecting users and offline services, and is venturing into financial services and venture capital.

"I am delighted that we are strengthening our collaboration, which utilises Toyota's connected technologies, with Grab". In particular, that will involve close collaboration with the Toyota Mobility Service Platform (MSPF), which is working on areas such as user-based insurance, new types of financial packages and predictive auto maintenance. But Grab still faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia. The company's app has been downloaded onto over 100 million mobile devices and the firm logs over 6 million rides per day.

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