Daimler, BMW to combine ride-sharing units

UPDATED: 3/28/18 5:39 pm ET

NEW YORK -- By joining forces, BMW Group and Daimler AG, two of the auto industry’s fiercest competitors, aim to become a mobility powerhouse.

A planned joint venture disclosed Wednesday will put at least a dozen business lines owned by the two German automakers into one as-yet-unnamed 50-50 partnership.

“We think putting all our assets together in this will make us a leading player in the mobility area,” said Peter Schwarzenbauer, member of BMW’s board of management responsible for digital business innovation and other business areas. “And this is really the target. It’s not to do a little bit here, a little bit there. We want to become the leading provider when it comes to mobility services.”

The deal means brands such as Daimler’s Car2Go and BMW’s DriveNow will work in tandem instead of in opposition once the deal is finalized. Regulators in both Europe and the U.S. must approve the agreement, and that could take several weeks to several months, Schwarzenbauer told reporters at the New York auto show. No financial terms were disclosed.

The new company will include businesses in the areas of car sharing, ride hailing, parking and electric vehicle charging. The joint venture will establish “verticals,” or platforms, for those four areas plus a fifth that links the first four areas together into one experience, Schwarzenbauer said.

The cooperation will allow for the offering of mobility services “at a level unheard of yet,” Schwarzenbauer said.

“This means we are going to be able to offer to customers a really individual targeted mobility offering,” he said. “It doesn’t matter if you are just looking for parking, if you want to charge your electric car, if you want a trip that includes public transportation. We think to combine individual mobility and public to make this more seamless will help a lot in the cities to improve mobility.”

The deal has been expected, but the scope of the final agreement is much more extensive than originally anticipated, said Shwetha Surender, Frost & Sullivan industry principal, said in a statement.

“From the perspective of the car-sharing market, this makes perfect sense,” Surender said. “Operating in an industry that is struggling to achieve profitability, it would allow them to gain economies of scale and tip the balance in their favor.”

But Surender wondered whether the ultra-competitive BMW and Daimler players will “learn to play nicely within the same service ecosystem?”

Schwarzenbauer, who started at BMW 34 years ago then left before returning to the company, marveled at that rivalry even as he touted the pending cooperation.

“All my life, I saw Mercedes as the key competitor,” he said. “Now, don’t get us wrong: We still will be heavy competing with Mercedes around the world. From what I’ve learned over the last 30 years, this is also quite healthy for the companies involved because this keeps us pushing forward all the time.”