Frankfurt, Munich. Daimler AG and BMW AG will invest more than 1 billion euros ($1.13 billion) to expand their merged car-sharing and ride-hailing operations to take on the likes of Uber Technologies Inc. and Lyft Inc.
The investment by the two biggest luxury carmakers, who agreed to join their mobility offerings nearly a year ago, will create as many as 1,000 new jobs across five units comprising car sharing, ride hailing, electric-vehicle charging and parking services. The division will also consider cooperating with or buying startups and established players, Daimler Chief Executive Officer Dieter Zetsche said Friday in a statement.
“The five services will melt together more and more into a mobility offering with fully electric and self-driving fleets,” BMW CEO Harald Krueger said. “This will be a central pillar of our strategy as a mobility provider.”
The new venture will combine Daimler’s Car2go and BMW’s DriveNow to create the world’s biggest car-sharing operator by users, according to BloombergNEF, and includes Daimler’s MyTaxi, Europe’s largest ride-hailing app. The companies set up their respective car-sharing businesses years ago but have struggled to turn a profit.
Keeping up with technology competitors such as Uber is critical for carmakers as new modes of on-demand transport proliferate to undermine private car ownership. In Berlin, technology platform Trafi has started cooperating with municipal transport provider BVG to integrate mobility offerings across public and private sectors in one app. The service is similar to Daimler’s moovel app.
The carmakers don’t have plans for a share sale of the division “for now,” Zetsche told reporters at the press conference. The combined services currently have revenues of 3 billion euros, Daimler Chief Financial Officer Bodo Uebber said.
BMW and Daimler pushing to grow their mobility unit comes as both Uber and Lyft confidentially filed for initial public offerings late last year. Uber’s offering could be the largest IPO in 2019 and one the five biggest of all time with bankers telling the U.S. company it could be worth $120 billion on the public market.