German carmakers Daimler and BMW are close to agreeing to combine their car-sharing services Car2Go and DriveNow, a senior executive at one of the carmakers told Reuters on Tuesday. The merger talks are in the final stages and the combined company will be independently run, with BMW and Daimler as largest shareholders, the source said, adding that the assets being pooled include BMW’s ParkNow parking app.
The likely deal – first mooted more than a year ago – is seen as a way to help the German brands compete with the U.S.-based ride-hailing service Uber. Daimler’s Car2Go, which launched in 2008, describes itself as the world’s largest one-way car-sharing service. It operates around 14,000 cars in 26 cities in North America, western Europe and China. DriveNow is a joint venture between BMW and car rental firm Sixt founded in 2011, which operates more than 6,000 vehicles in nine major European cities.
ReachNow, BMW’s car-sharing subsidiary, is launching a new service in Seattle aimed at competing with Uber and Lyft. Starting today, ReachNow users in the city will see a ride-sharing option in the app that lets them hail a car immediately or schedule a ride up to a week in advance. Trips will cost $2.40 per mile plus $0.40 per minute (with a minimum ride price of $3.24), which is on par with some of Uber’s higher-tiered options.
Since it won’t be the cheapest ride in town, BMW and ReachNow are focusing on a set of perks that the companies hope will entice riders. The set of small luxuries, available when users book a ride, includes the ability to request a specific temperature, radio station, or flag that the ride should be “quiet.”
The ReachNow ride-hailing service differs from Uber and Lyft in one particularly key way: how drivers will be paid. BMW is contracting them from a company called Ecoservice, according to The Seattle Times. While Uber and Lyft incentivize drivers to make as many trips as possible, with pay coming from a cut of each fare and bonus opportunities tied to overall volume of rides given, the ReachNow ride-hailing sounds like it will emphasize quality over quantity. Drivers are paid $14.25 per hour and have set shifts, will be eligible for benefits, and can even bring in a 5 percent bonus each week if their rating stays between 4.8 and 5 stars. The drivers will also be using ReachNow’s cars, so they don’t have to shell out for gas, maintenance and upkeep, or insurance, according to the outlet.
BMW didn’t say if, when, or where it plans to expand the service beyond Seattle. ReachNow’s car-sharing effort has had its ups and downs — our own Dami Lee rather liked it when she tested it out here in New York, but the company recently decided to scale back its efforts in this city — and BMW is also in the process of merging its entire mobility division with the one operated by Daimler (the parent company of Mercedes-Benz). BMW is also piloting a subscription service in Nashville, Tennessee.
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Mercedes-Benz-owner Daimler has taken a stake in Taxify in a funding round that values the ride-booking group at more than $1bn, the latest investment by the German carmaker into the growing world of ride-on-demand services.
Estonian start-up Taxify, which also counts China’s Didi Chuxing as an investor, has raised $175m as it aims to expand beyond its network of 40 cities in Europe and Africa.
Didi also participated in the round, along with European venture capital fund Korelya Capital and TransferWise co-founder Taavet Hinrikus, with more than $100m of the investment coming from the German carmaker. Under the latest deal Daimler will join Taxify’s board. The carmaker may roll the service into its moovel app, a step that would increase Taxify’s customer base by a quarter to 12.5m, according to one person familiar with the German carmaker’s thinking.