Gett, a ride-hail company that operates in Israel, parts of Europe and New York, just announced that the Volkswagen Group has invested $300 million in the Uber and Lyft competitor. The strategic investment signals that the consortium of auto brands, which includes Volkswagen, Audi, Bentley, Porsche and Lamborghini, is looking to expand its business to include mobility services.
The Volkswagen Group joins other automakers looking to fend off an expected decline in personal car ownership as ride-hail services and driverless cars gain in popularity. With partnerships and acquisitions of companies like Lyft and RideScout, companies like General Motors and BMW have already begun forays into the car-share business.
For Gett, which is profitable in some of its early markets and has $500 million in revenue, the cash infusion will help maintain a business model that some would argue is otherwise unsustainable. In Manhattan, the company typically charges riders a flat $10 fee but pays drivers based on a per-minute and per-mile equation. On fares that are more than $10 based on the equation, Gett loses money.
But the company has no plans to change the way it operates, Gett CEO Shahar Waiser told Recode. For one, the fare paid out to drivers doesn't always end up being more than $10. Waiser also hopes to differentiate its service from Lyft's and Uber's by its treatment and payment of its drivers.
For now, Gett's bread and butter is its corporate service, which makes up 30 percent of the company's revenue. With 4,000 corporate clients, the service fits in well with the Volkswagen Group's brands, which are typically seen as high-end or luxury vehicles.
But the company may also have to grapple with Volkswagen's recent emissions scandal. Uber and Lyft often tout their car pool services as a solution to pollution from congestion. While the data proving that theory is lacking, a partnership between a ride-hail service and a company that cheated on emissions tests in the U.S. is certainly not a way to convince regulators that ride-sharing is an efficient means to reduce congestion-related pollution.
This article originally appeared on Recode.net.