28 Mar 18

BMW and Daimler merge mobility services

BMW Group and Daimler AG have announced they will merge their mobility services business units. The aim is not merely to offer customers a single source for sustainable urban mobility, but to strategically develop and expand the services – especially with regard to car-sharing, ride-hailing, parking, charging and multimodality.

For months, rumours had been circulating about a partnership of some sort between DriveNow and Car2Go, respectively BMW's and Daimler's car-sharing subsidiaries. The recent buyouts of their respective partners – Sixt for DriveNow and Europcar for Car2go – was widely seen as a preparation for the merger. The deal signed today merges both car-sharing providers but also goes much further, creating a 50/50 joint venture that combines the entire range of mobility services offered by both companies – who will remain competitors in their core business. Adding up all constituent services, the new joint venture will have close to 40 million customers, mainly in Europe. Scale is crucial when it comes to generating profit from mobility services.

Leading provider
The joint venture's stated goal is to become a leading provider of innovative mobility services, by offering unique experiences to their customers and comprehensive support to cities, local governments and other partners on the road to sustainable urban mobility. 

Working in partnership, both companies will enable rapid global scaling of those services to address the challenges of urban mobility and the changing demands of their customers. The future, as envisioned by both BMW and Daimler, is a holistic ecosystem of intelligent, seamlessly connected mobility services, available at the tap of a finger. 

Strong focus
“This alliance will make it easier for our customers to discover the emission-free mobility of the future”, said Harald Krüger, Chairman of the Board of Management of BMW AG. “We will not leave the task of shaping future urban mobility to others”, added Dieter Zetsche, Chairman of the Board of Management of Daimler AG. 

The joint venture is strongly focused on developing sustainable, flexible and connected urban mobility, which both companies see as the key to the future. Specifically, the new company will work in the following five areas:

  1. Multimodal and on-demand mobility: Developing intelligent and seamless connectivity between various mobility offerings, including booking and payment, as currently done by ReachNow (BMW) and moovel (Daimler). This will also offer possible solutions for the challenges of urban private transport.
  2. Car-sharing: Improving the utilisation of vehicles to help reduce the total number of vehicles in cities. Together, DriveNow (BMW) and Car2Go (Daimler) currently operate a total of 20,000 vehicles in 31 major international cities, with a combined usership of 4 million customers.  Watch out, Uber!
  3. Ride-hailing: In total, 13 million customers and some 140,000 drivers already use the modern, practical and fast way of ride-hailing via the apps mytaxi, Clever Taxi and Beat, or the private-hire vehicle service Chauffeur Privé (all Daimler subsidiaries). Innovative offers such as mytaximatch, in which random customers share a taxi at a fingertip, help eliminate single-user trips in inner cities, thus reducing traffic.
  4. Parking: Building on the expertise of ParkNow and Parkmobile (both BMW), the aim here is to deliver ticketless, cashless on-street parking or offer help in finding, reserving and paying for off-street parking in a garage. The aim is to reduce time spent looking for the 'right spot' – cars searching for parking spaces constitute up to 30% of urban traffic. 
  5. EV charging: Via ChargeNow and Digital Charging Solutions (both BMW subsidiaries), the joint venture will offer easy access to the world's largest network of public EV charging stations (more than 143,000 charging points worldwide). 

If the as yet unnamed joint venture is approved by the relevant competition authorities later this year, both BMW and Daimler expect it will have a positive effect on their respective overall valuation and annual earnings. 

Authored by: Frank Jacobs