BMW AG and Daimler AG have agreed to form a joint venture that combines several of their existing mobility start-ups in a combination ride-hailing, parking, and electric-car charging business. The venture, into which the two automakers will invest a €1 billion ($1.13 billion), will combine Daimler’s Car2Go car-sharing business with BMW’s DriveNow, ParkNow, and ChargeNow businesses.
Each automaker will hold a 50% share of the new business. The joint venture was initially announced almost a year ago, but details of the final outline for the project required European regulatory approval.
Both partners also reserved some of their mobility ventures from the new project: Daimler still plans to introduce a robot-taxi service in San Jose, Calif., later this year (in partnership with Bosch); and BMW is still developing its own self-driving electric car. It also is part of a venture with Fiat Chrysler and Intel developing semi-autonomous and autonomous technologies for production vehicles.
Specifically, the venture will operate five individual companies: Reach Now, offering multimodal services; Charge Now, for EV charging; Free Now, for taxi ride-hailing; Park Now, for parking; and Share Now, for vehicle sharing. Each business will have its own CEO, and Daimler and BMW will be the shareholders directing strategy but not interfering with the business operations.
"Our mobility services have developed a strong customer base and we are now taking the next strategic step," stated Daimler chairman Dieter Zetsche. "Further cooperation with other providers, including stakes in startups and established players, are also a possible option."
Zetsche emphasized that customers’ data would be held securely, and that Daimler’s and BMW’s record of product quality would give them a sense of confidence in their services.
"These five services will merge ever more closely to form a single mobility service portfolio," stated BMW CEO Harald Krüger. "The cooperation is the perfect way for us to maximize our chances in a growing market, while sharing the investments."
In their unveiling press conference the partners were clear that the joint venture represents a strategy to offset the progress of competitors like Uber and Lyft, which dominate ride sharing, but also to anticipate the role of new technologies and the markets these will shape.
At the same time, combining their efforts reduces their separate risks, an approach that has been taken by Daimler and BMW rivals.
Ford and Volkswagen are planning to build electric vehicles together, and have other combinations under negotiation. VW also has a project underway with an Intel business called Mobileye, to introduce a self-driving, ride-hailing service later this year. General Motors and Honda are collaborating to develop fuel-cell technologies.