German car giants BMW and Daimler have announced a €1 billion investment in a joint ride-hailing and car-sharing business. The automakers say they want to "establish a new player" to rival services from firms like Uber.
In Berlin on Friday, BMW and Daimler unveiled a new ride-hailing and mobility services platform designed to compete with Uber, Lyft and other tech companies.
Daimler CEO Dieter Zetsche and BMW chair Harald Krüger said they would invest €1 billion ($1.1 billion) into the joint venture, which will also offer carpooling, parking, trip planning and charging services for electric cars in big cities.
"We are ... investing more than €1 billion to establish a new player in the fast-growing market for urban mobility," Zetsche said.
The German carmakers' goal is to improve their market position and bring their combined customer base of 60 million to the new platform. They added that the business would be based in Berlin and create "up to 1,000" jobs worldwide.
Shift to mobile services
The venture has five different operations: Reach Now, offering journeys across multiple modes of transport; ride-hailing through Free Now; ticketless parking under Park Now; charging services under Charge Now; and car-sharing under Share Now.
"These five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously," Krüger said.
The two companies already operate separate car-sharing services in 30 cities — DriveNow and Car2go — which allow people to find and rent a vehicle for a specified period of time via a smartphone. Those apps will eventually be merged under the Share Now brand.
Efforts to reduce congestion in cities and curb greenhouse gas emissions have led automakers to look beyond manufacturing and embrace new technologies and business models.
Mobility and digital economy expert Steven Hill told DW that creating the new platform was "a smart but desperate move" by Daimler and BMW, but one that wouldn't necessarily solve traffic problems.
"The car-sharing business is losing money and slowly dying, beaten by 'ride-renting' companies like Uber," he said, adding that public transport rather than ride-sharing was the best way to ease congestion in the long run.
"These companies are all big money losers in a race to the bottom," he said. "Who survives is anyone's guess."
nm/sms (Reuters, AP, AFP, dpa)