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BMW & Daimler Invest $1 Billion in a New Mobility Venture, Will Challenge Uber

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【Summary】German automakers BMW and Daimler AG, announced today they are joining forces with a $1 billion euros ($US1.1 billion) investment in a new joint venture to provide seamless urban mobility options to customers. The service is called “Your Now”. The two automakers are combining five separate joint ventures together under one mobility brand which will be accessible using a single smartphone app.

Eric Walz    Feb 22, 2019 1:55 PM PT
BMW & Daimler Invest $1 Billion in a New Mobility Venture, Will Challenge Uber

Although Uber still dominates in the growing list of ride-hailing companies, the ride-hailing giant is facing growing competition from other startups that copied Uber's business model. Among Uber's growing list of challengers in markets around the world are U.S.-rival Lyft, Singapore's Grab, China's Didi Chuxing and Brazil's Easy Taxi.

Now global automakers are getting involved, by partnering with mobility startups and entering the growing "mobility as a service" (MaaS) space. Plans include operating their own mobility businesses using fleets of their own vehicles and eventually including driverless cars that can be summoned with an app.

German automakers BMW and Daimler AG, announced today they are joining forces with a $1 billion euros ($US1.1 billion) investment in a new joint venture to provide seamless urban mobility options to customers. The service is called "Your Now". The automakers are looking to participate in and shape the future of urban mobility.

The two automakers will work together on the new service by combining five separate joint ventures together under one brand. With the new joint venture, BMW and Daimler are combining REACH NOW for local car-sharing, CHARGE NOW to find and pay for EV charging, FREE NOW for on-demand ride-hailing like Uber, PARK NOW to find, reserve and pay for parking and SHARE NOW for car-sharing, which will be rolled out later.

"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 and interconnect with the other modes of transport," said Harald Krüger, Management Board Chairman of BMW AG. "This service portfolio will be a key cornerstone in our strategy as a mobility provider. The cooperation is the perfect way for us to maximize our chances in a growing market, while sharing the investments."

The combined users for each of these individual services is 60 million people and all of the services will be accessible from a single smartphone app, creating a single mobility platform.

"Our mobility services have developed a strong customer base and we are now taking the next strategic step. We are pooling the strength and expertise of 14 successful brands and investing more than €1 billion to establish a new player in the fast-growing market for urban mobility," said Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.

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All of the services from each joint venture will be accessible from a single platform.

SHARE NOW will become the world's largest car-sharing provider with the combined global fleets of both car2go and BMW's mobility service DriveNow. In the future when the fleet expands, there will be more carsharing cities around the world and a wider range of premium vehicles from BMW and Mercedes Benz available on-demand.

The new joint venture is geared towards future urban mobility. Customers will to able to get around using a seamlessly connected mobility ecosystem that combines car-sharing, ride-hailing, parking, EV charging and mass-transit options from a single source and is available with just a few taps. The idea was to create the most attractive, most comprehensive mobility solution for customers.

Uber is exploring a similar revenue streams as competition heats up from automakers and other startups offering MaaS. The ride-hailing company launched a pilot last month in Denver that allows users to search and pay for mass-transit tickets without ever leaving the Uber app.

The idea is too encourage the use of mass-transit options in urban areas to reduce congestion, something that Uber has been blamed for as thousands of Uber drivers clog city streets.

Uber is also investing in e-bikes and electric scooter sharing for last mile trips as it looks to fend off new rivals offering inexpensive electric scooter and bike-sharing services.

As personal car ownership is expected to decline, BMW and Daimler are working to secure new revenue streams and BMW and Daimler are not alone. General Motors is working with Cruise on a robotaxi service using autonomous vehicles. Toyota invested $500 million in Uber last summer to work together on self-driving technology.

In addition, Alphabet's self-driving division Waymo is launching a commercial ride-hailing service of its own, using a fleet of Chrysler Pacifica minivans outfitted for autonomous driving.

With their new joint venture, BMW and Daimler are hoping to make carsharing the new urban norm instead of personal ownership. In the future, BMW and MINI vehicles will join the fleet of Mercedes-Benz vehicles. Some cities will have enough variety of models that a user can drive a different car every day of the week.

"By creating an intelligent network of joint ventures, we will be able to shape current and future urban mobility and draw maximum benefit from the opportunities opened up by digitalization, shared services and the increasing mobility needs of our customers." Zetsche said in a statement.


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