BMW and Daimler link up to rival Silicon Valley ride-sharing giants

30 Mar 2018388 Views

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BMW DriveNow car. Image: hanohiki/Shutterstock

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Former competitors Daimler and BMW join forces on car-sharing business.

German auto manufacturers BMW and Daimler are to merge their respective car-sharing businesses in an effort to boost their competitiveness against Silicon Valley innovators in the area.

Joining forces

Mercedes-Benz manufacturer Daimler and BMW have said they are funnelling their services into a joint venture in which both companies will own equal shares. According to Bloomberg, the two leading luxury vehicle manufacturers are collaborating to take on power players such as Uber and Lyft.

Daimler’s Car2Go and BMW’s DriveNow businesses will be integrated, as well as smartphone apps for hailing taxis, recharging electric vehicles and hunting down parking spots. In a statement, both firms said earnings are likely to see a boost if the deal can be tied up by the end of 2018, as opposed to previous predictions of flat figures.

Both companies would share the risk of operating in an industry that is constantly evolving and relatively new, and focused primarily on technological advances.

Mobility services growing fast

Daimler and BMW stated: “The aim of this transaction is to become a leading provider of innovative mobility services. Both automotive manufacturers aim to shape the mobility of the future to be able to offer their customers unique experiences and support their partners, such as cities and communes, in achieving sustainable urban mobility.”

They aim to offer a “holistic ecosystem of intelligent, seamlessly connected mobility services, available at the tap of a finger”. The statement also noted the companies’ aim to create a more environmentally friendly method of mobility service, focusing on electromobility “by offering electrified car-sharing vehicles, as well as easy access to charging and parking options. As a result, it will become even easier to experience and use sustainable mobility services.”

Peter Schwarzenbauer, member of the board of management of BMW AG, said: “The future of mobility lies in cities. The key to more liveable cities is in intelligent and seamless services that are easy to use and combine sustainable modes of transport and mobility services.”

Bodo Uebber, member of the board of management of Daimler AG and head of finance and controlling, echoed Schwarzenbauer’s sentiments: “Together, we can offer millions of customers highly attractive products and services to make their lives easier and their environment a better place to live. The options offered by the planned joint venture concept will complement mobility services offered by cities.”

Analyst at Independent Research, Sven Diermeier, said the combination is unlikely to pose antitrust issues, depending on how the market is classified.

The companies have not yet announced a name for the merged service, as they are waiting until regulators approve the deal to make anything public.

Car2Go offers smart city car model and smaller vehicle hire from Daimler’s Mercedes-Benz brand. DriveNow consists of Mini brand cars and BMW compacts, including the i3.

BMW DriveNow car. Image: hanohiki/Shutterstock

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com