Autos

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Ride-sharing startups tend to be run by young, smart people with utopian ambitions and access to unfathomable pools of venture capital. So we might assume they have esoteric knowledge about the future of transportation that the Louie DePalmas and Thelma Dickinsons in the regular auto industry can't discern.

Sharing services "defy the very notion of a car as a personal, autonomous machine,'' the McKinsey consultancy wrote in 2014. Uber is ushering in a era when "car ownership goes away,'' its Chief Executive Officer Travis Kalanick told a tech conference the same year.

Back to the Future
Toyota research and development expenditure, quarterly
Source: Bloomberg data

So the news that Toyota is investing an unspecified amount in Uber, and that Volkswagen is stumping up $300 million for a stake in the Israeli ride-sharing startup Gett, provokes the question: What secrets do the old-industry dinosaurs hope these travelers from the future will teach them?

In fact, the truth is closer to the opposite. Uber's scale and rapid growth certainly are impressive -- it has more than a million active drivers globally, and 450,000-plus in the U.S. alone, according to the company -- but it looks more modest when you put it in the context of a world with more than 1 billion registered vehicles.

In the U.S., Uber drivers account for only 0.17 percent of the country's 265 million registered vehicles. Toyota alone sells about 2.5 million new cars in the U.S. every year, according to data compiled by Bloomberg.

Uber doesn't even have the biggest fleet in the U.S., which probably belongs to Hertz. Avis Budget has more than 350,000 vehicles on its lots around the Americas, and the federal government has another 204,000. Last year, the top nine car manufacturers sold another 630,000-odd vehicles to government and corporate fleet-buying programs.

Like Uber for Cars
Uber's network of active drivers is on a par with the biggest fleets in the U.S. transport industry. Hertz is still bigger
Sources: Automotive Fleet, company reports, Uber, BLS, GSA, Fleet Central
Note: Avis Budget fleet is for Americas region, not solely U.S. All figures latest available.

If you think that these are all dumb hunks of metal compared with Uber's web of connected iPhones, you'd be mistaken. Thanks to the GPS navigation and safety reporting devices that are rapidly becoming as standard in automobiles as airbags and ABS brakes, carmakers have access to a vastly richer pool of data on our driving habits than ride-sharing apps could hope to draw on.

There were 26 million connected cars in 2014 that collected about 480 million terabytes of data over the course of the year, according to IBM. That number will rise to 11.1 petabytes by 2020 -- enough to house the digital collections of the British Library twice over. In 2025, as much as 88 percent of cars sold in the U.S. will have embedded telematics such as GPS and safety reporting devices, according to EY.

Toyota itself is investing $1 billion in a research institute to develop autonomous-driving and new safety technologies, and last month announced a partnership with Microsoft on telematics.

The most important part of the latest announcement is not Toyota's investment in Uber, but its simultaneous decision to offer lease finance to Uber drivers. That highlights the real rival here: General Motors, which in March announced a comparable short-term rental program with Lyft, the Uber arch-enemy in which it made a $500 million investment in January.

Big automakers aren't ignoring the way that ride-sharing apps are changing the transport world, but neither are they overestimating it. If Uber, and Lyft, and Gett, and Didi Chuxing become more dominant fixtures in urban transport, the world won't have changed radically. But carmakers may have acquired some important new customers, and like good salespeople, they're building their relationships early.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net