DriveNow Deal Said To Pave Way For BMW-Daimler Alliance
BMW and Daimler are now in a great position for a joint venture after the former automaker bought out Sixt from the DriveNow partnership. The move is said to have paved a way for the two car giants to form their own rideshare service to compete with the two major players in that space, Lyft and Uber.
Sixt will exit from the space to concentrate on their main business, which is rental cars. The deal is said to profit the company some $248 million, selling their stake in DriveNow for over $260 million. The move makes BMW the sole owner of the subsidiary. The luxury car maker has plans to increase their premium mobility service business to 100 million customers in the next seven years. That is quite the ambitious plan bu nevertheless, BMW will surely attempt to pull through on that promise.
BMW is in talks with Daimler’s Car2Go car sharing service to form a joint venture, with plans to combine their car sharing, ride-hailing, charging , and parking services. Both companies are keeping the progression of the talks tight-lipped, as is commonplace for the two German automakers. A senior executive, speaking under anonymously, says the deal is setting the company up for future driverless taxi fleets the company plans on integrating when the technology allows.
Ride-hailing services account for over one-third of the taxi market worldwide and is expected to double every two years into the future. The industry is expected to be a $285 billion industry in the next 12 years.