DriveNow and car2go ridesharing merger appears closer

24 January 2018

DriveNow and car2go ridesharing merger appears closer

24 January 2018

German manufacturers Daimler and BMW could be close to merging their car-sharing entities into one business to compete with market leader Uber.

Plans for a collaboration between the two companies first surfaced in December 2016 and appeared closer in May last year. However, it seems work behind the scenes has solidified a deal, which could be announced as early as next month. With a potential change in ownership patterns, manufacturers are looking for new ways to engage with consumers, with ride-sharing services coming out on top.

According to news agency Reuters, the new company will be independently run, with BMW and Daimler as the largest shareholders. In addition, assets such as BMW’s recently acquired ParkNow parking app will be pooled into the deal.

Such a merger will see the manufacturers in a position to compete with Uber, widely regarded as the market leader in rise-hailing services. The US company is looking at incorporating autonomous vehicles into its fleet, striking up a deal with Volvo to supply the technology.

Daimler's Car2Go launched in 2008 and described itself as the world's largest one-way car-sharing service. It operates around 14,000 cars in 26 cities in Europe, the US 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.

The initial merger plans were apparently denied by Sixt, would have looked to invite other companies to join to create a large European network of vehicle sharing.

The news comes at a time when Daimler is reporting huge growth with its car2go business. According to the manufacturer, the service saw 2.97 million customers in 2017, strengthening what it calls a market-leading position. Compared to 2016, membership numbers grew by 30%, and the company’s busiest city was Chongqing in China, with 234,000 customers, followed by Berlin with 219,000 and Madrid with 190,000.

‘2017 was a successful year for car2go,’ said Olivier Reppert, CEO of the car2go Group. ‘We have grown in all areas; number of customers, rental duration and vehicle utilisation rate and in all regions where we operate. And for 2018, all signals point towards further growth.’

In the past fiscal year 2017 alone, our customers rented a car2go vehicle more than 24 million times. The greatest rentals growth rates were achieved in Milan (up 678,000 rentals), Berlin (up 622,000 rentals) and Hamburg (up 454,000 rentals). With the introduction of the car2go packages, which have made longer rentals even more attractive for customers since September, the average rental duration has increased by 30%.

Photograph courtesy of DriveNow