Daimler, BMW to invest 1 billion euros in venture to compete Uber

Daimler and BMW revealed a joint ride-hailing, parking and electric vehicle charging business on Friday to rival with mobility services offered by Uber and other tech companies.

The luxury car companies stated they would invest over 1 billion euros ($1.13 billion) to broaden the joint venture, moving beyond manufacturing and auto sales toward pay-per-minute or pay-per-mile systems.

Consultancy PwC has stated automakers face marginalization by cash-rich technology companies unless they develop services based on vehicle usage.

Established ride-hailing firms have been broadening. China’s Didi Chuxing aims to construct its business in Latin America and Uber is achieving a stranglehold on its U.S. market.

“Further cooperation with other providers, including stakes in startups and established players, are also a potential option,” Daimler’s Chief Executive Dieter Zetsche stated.

Daimler’s Car2Go car-sharing brand will be merged with BMW’s DriveNow, ParkNow and ChargeNow businesses, with both automakers owning 50 percent stake in the venture.

The venture has five strands: REACH NOW, a smartphone-based route management and booking service, CHARGE NOW for electric vehicle charging, FREE NOW for taxi ride-hailing, PARK NOW for parking services and SHARE NOW for vehicle sharing.

“These five services will merge ever more closely to establish a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously,” stated BMW Chief Executive Harald Krueger.

BMW and Daimler are collaborating to develop autonomous vehicles which could allow them to up-end the market for taxi and ride-hailing services.