BMW and Daimler in car-sharing merger

Daimler and BMW plan to merge their car-sharing operations as the world’s biggest luxury vehicle makers team up to take on ride-hailing providers such as Uber.

The companies will form a 50-50 joint venture to include Daimler’s Car2Go and BMW’s DriveNow businesses as well as services including smartphone apps for calling taxis, locating parking spots and recharging electric cars, they said.

Both car makers raised fullyear profit forecasts and said earnings were likely to grow slightly if they could complete the deal in 2018, versus earlier predictions of flat figures.

The merger would allow Daimler and BMW to share the risk of operating in a techfocused industry that includes a growing suite of rivals in mobility services. They are entering a rapidly changing environment that in the past week alone included a market and shareswap deal between Uber and Southeast Asian rival Grab, the US company’s struggles with a fatal accident involving a selfdriving car test and Alphabet’s Waymo unit agreeing to develop autonomous vehicles with Britain’s Jaguar Land Rover.

The German car makers pledged to continue competing in their main businesses of building vehicles. Car2Go and DriveNow were both started as ventures with established rental companies, but Daimler and BMW each bought out the other owners in earlier in 2018.

The combination was not likely to pose antitrust issues, but that would depend on how the market was classified, said Sven Diermeier, an analyst at Independent Research.

The Daimler-BMW tie-up is “going in exactly the right direction, because mobility services is developing into a large area”, said Stefan Bratzel, director of the Centre of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “Right now, you can’t earn money there, and there are a lot of infrastructure and overhead costs that can be combined.”