Abu Dhabi, UAESunday 18 August 2019

Daimler and BMW to invest €1bn to take on mobility tech rivals

Venture will create as many as 1,000 new jobs across five units comprising car sharing, ride hailing, electric-vehicle charging and parking services

BMW chief executive Harald Krueger, left, with Daimler chief executive Dieter Zetsche. The firms aim to take on the likes of Uber and Lyft. Bloomberg
BMW chief executive Harald Krueger, left, with Daimler chief executive Dieter Zetsche. The firms aim to take on the likes of Uber and Lyft. Bloomberg

Daimler and BMW will invest more than €1 billion (Dh4.16bn) to expand their merged car-sharing and ride-hailing operations to take on the likes of Uber Technologies and Lyft.

The investment by the two biggest luxury car makers, who agreed to join their mobility offerings nearly a year ago, will create as many as 1,000 new jobs across five units comprising car sharing, ride hailing, electric-vehicle charging and parking services.

BMW and Daimler are working to develop autonomous cars, vehicles which could enable them to up-end the market for taxi and ride-hailing services, according to Reuters.

The division will also consider cooperating with or buying startups and established players, Daimler chief executive Dieter Zetsche said at the weekend.

“The five services will melt together more and more into a mobility offering with fully electric and self-driving fleets,” Mr Krueger said. “This will be a central pillar of our strategy as a mobility provider.”

The new venture will combine Daimler’s Car2go and BMW’s DriveNow to create the world’s biggest car-sharing operator by users, called Share Now, according to Bloomberg. The companies set up their respective car-sharing businesses years ago but have struggled to turn a profit.

The venture's other strands are Reach Now, a smartphone-based route management and booking service, Charge Now for electric car charging, Free Now for taxi ride-hailing and Park Now for parking services .

“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,” said BMW chief executive Harald Krueger.

Keeping up with technology competitors such as Uber is critical for car makers as new modes of on-demand transport proliferate to undermine private car ownership.

Consultancy PwC has said car makers face marginalisation by cash-rich technology firms unless they develop services based on vehicle usage.

Established ride-hailing firms have been expanding. China’s Didi Chuxing aims to build its business in Latin America and Uber is gaining a stranglehold on its US market.

In Berlin, technology platform Trafi has started cooperating with municipal transport provider BVG to integrate mobility offerings across public and private sectors in one app. The service is similar to Daimler’s moovel app.

BMW and Daimler pushing to grow their mobility unit comes as both Uber and Lyft confidentially filed for initial public offerings late last year. Uber’s offering could be the largest IPO in 2019 and one the five biggest of all time with bankers telling the US company it could be worth $120bn on the public market.

Updated: February 24, 2019 10:58 AM

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