European auto giants Daimler and BMW, whose car-sharing services compete in Seattle and other U.S. cities, have agreed to combine their “mobility services business units,” in a bid to dominate the new market of app-based shared transportation options.
As part of the deal, Daimler’s car2go will merge with BMW’s ReachNow in the U.S. and DriveNow in Europe, creating one combined car-sharing giant.
Car2go representatives said the deal will create a “true global mobility powerhouse.” Seattle is its biggest U.S. market, with more than 113,000 members. Car2go’s U.S. presence also includes Austin, Columbus, Denver, New York City, Portland and Washington D.C. Internationally, car2go vehicles roam the streets in locations in Canada, China, Germany, Italy, Austria, Spain and the Netherlands. Car2go has 3.1 million members and 14,000 cars globally, including 1 million members in North America.
ReachNow boasts more than 80,000 members and 1,300 cars in Seattle, Portland and Brooklyn. The company declined to comment further on the news and noted that customers won’t see any changes until the deal gets the sign-off from regulators.
Each company will take a 50 percent stake in the joint venture of their combined mobility services. In addition to car-sharing units like car2go and ReachNow, the deal will power expansion in ride-hailing, parking and electric vehicle charging services. The ride-hailing expansion could position the combined service as a more formidable competitor to the likes of Uber and Lyft.
The companies say the deal will lead to a “holistic ecosystem of intelligent, seamlessly connected mobility services, available at the tap of a finger.” That suggests that the companies may streamline apps to make it easier to find all these services in one place, though that has not been confirmed.
“As pioneers in automotive engineering, we will not leave the task of shaping future urban mobility to others,” Dieter Zetsche, chairman of the Board of Management of Daimler and head of Mercedes-Benz Cars, said in a statement. “There will be more people than ever before without a car who will still want to be extremely mobile. We want to combine our expertise and experience to develop a unique, sustainable ecosystem for urban mobility.”
The deal shows how bullish these automotive leaders are on the new trend of app-based transportation, in the form of driving shared cars parked around town or getting a ride from someone else. The combined car-sharing unit will have a stranglehold on that market.
