Daimler, BMW to invest $1.13 billion in venture to rival Uber

Daimler Dieter Zetsche chief executive, right, and BMW chief Harald Krueger present the merger of their car sharing activities on Friday, February 22 in Berlin. (AFP)
Updated 22 February 2019

Daimler, BMW to invest $1.13 billion in venture to rival Uber

  • Carmakers Shifting beyond manufacturing and car sales toward pay-per-minute or pay-per-mile systems
  • Carmakers face marginalization by cash-rich technology firms unless they develop services based on vehicle usage

BERLIN: German carmakers Daimler and BMW unveiled a joint ride-hailing, parking and electric car charging business on Friday to compete with mobility services provided by Uber and other tech firms.
The luxury car firms said they would invest more than €1 billion ($1.13 billion) to expand the joint venture, shifting beyond manufacturing and car sales toward pay-per-minute or pay-per-mile systems.
Consultancy PwC has said carmakers face marginalization by cash-rich technology firms unless they develop services based on vehicle usage.
Established ride-hailing firms have been expanding. China’s Didi Chuxing aims to build its business in Latin America and Uber is gaining a stranglehold on its US market.
“Further cooperation with other providers, including stakes in startups and established players, are also a possible option,” Daimler’s Chief Executive Dieter Zetsche said.
Daimler’s Car2Go car-sharing brand will be combined with BMW’s DriveNow, ParkNow and ChargeNow businesses, with both carmakers holding 50 percent stake in the venture.
The venture has five strands: REACH NOW, a smartphone-based route management and booking service, CHARGE NOW for electric car charging, FREE NOW for taxi ride-hailing, PARK NOW for parking services and SHARE NOW for car-sharing.
“These five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously,” said BMW Chief Executive Harald Krueger.
BMW and Daimler are working to develop autonomous cars, vehicles which could enable them to up-end the market for taxi and ride-hailing services.


German economy to shrink by 5.2% this year, grow by 5.1% next year

Updated 22 September 2020

German economy to shrink by 5.2% this year, grow by 5.1% next year

  • The number of people out of work is seen rising to 2.7 million this year from 2.3 million in 2019
  • The Ifo institute cautioned that there was an unusually high degree of uncertainty attached to the forecasts

BERLIN: Germany’s Ifo institute on Tuesday said Europe’s largest economy would likely shrink by 5.2 percent this year, raising its previous estimate for a 6.7 percent drop, in the latest sign the damage caused by the COVID-19 pandemic could be smaller than initially feared.
“The decline in the second quarter and the recovery are currently developing more favorably than we had expected,” Ifo chief economist Timo Wollmershaeuser said.
For 2021, Ifo cut its economic forecast for Germany to 5.1 percent growth from its previous estimate of 6.4 percent. It expects the economy to expand by 1.7 percent in 2022.
The number of people out of work is seen rising to 2.7 million this year from 2.3 million in 2019, before edging down to 2.6 million in 2021 and then to 2.5 million in 2022.
That would translate into a jump in the unemployment rate to 5.9 percent this year from 5.0 percent last year. The rate would then drop to 5.7 percent percent in 2021 and 5.5 percent in 2022, Ifo said.
The Ifo institute cautioned that there was an unusually high degree of uncertainty attached to the forecasts. It pointed to the rising number of coronavirus infections, the risk of a disorderly Brexit and unresolved trade disputes.