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BMW i3 and Mercedes-Smart: "Game changers in the growth market for urban mobility"
Photo: Fabian Sommer / dpa
When they announced in February 2019, BMW and Daimler did not skimp on superlatives.
The two arch rivals from Munich and Stuttgart wanted to form »a new global player«, a »game changer in the growth market for urban mobility«.
The car sharing providers Drive Now (BMW) and Car2Go (Daimler) were merged into Share Now.
According to the message, two of the most successful premium manufacturers in the world wanted to be more than just car manufacturers.
They wanted to revolutionize the mobility of the future.
A future where cars were increasingly rented and shared, not necessarily purchased.
BMW and Daimler not only promised their customers chic vehicles, but also a complete range of door-to-door mobility, combinations of bus, train, car sharing, shuttles and e-scooters.
Share Now was supplemented by digital offers for charging (Charge Now), parking (Park Now), taxi services (Free Now) and a platform that was supposed to connect all available transport offers (Reach Now).
A few years ago it was still said: »The sky is the limit«
In this way, a »mobility offer with fully electric and self-driving fleets that can be charged and parked independently and connected to other means of transport«, enthused the then BMW boss Harald Krüger, which is »a central component in our strategy as a mobility provider«.
His colleague at the time, Dieter Zetsche, went one better: "The sky is the limit," the Daimler boss trumpeted.
Just over three years later, there is not much evidence of the high-flying ambitions.
With a dry message, BMW and the Daimler Group, which is now called Mercedes-Benz, announce their exit from the heart of the former cooperation: Share Now, the car sharing platform, is being sold to the competitor Stellantis, the newly minted large corporation to which include Opel, Peugeot, Citroën, Fiat and former Mercedes partner Chrysler.
The sale shows: Contrary to the once so flowery visions, Mercedes and BMW have no strategy for the future business of mobility services.
They are sticking with the ride-hailing offer Free Now (formerly MyTaxi).
But the promise that the multi-mobility app will “continue to grow in Europe” sounds unambitious.
As early as autumn 2020, there were rumors that US rival Uber was interested in Free Now.
It cannot be ruled out that the two car manufacturers are just waiting for a good opportunity to withdraw from ride-hailing as well.
The mobility app Reach Now (formerly Moovel) was discontinued at the end of March.
The two premium partners also sold Park Now long ago.
Not an airline like Lufthansa, more of an aircraft manufacturer like Airbus
The successors of Krüger and Zetsches, Oliver Zipse and Ola Källenius, are increasingly concentrating on what brings the car companies the highest profits: the sale of high-yield sedans and SUVs.
BMW has buried the earlier strategy of converting the premium manufacturer into a versatile mobility provider.
One is not an airline like Lufthansa, but rather an aircraft manufacturer like Airbus, Zipse once said in a figurative sense to explain the change in strategy.
Mercedes has also refrained from upgrading Share Now to a self-driving city fleet for a long time.
Automated driving functions are now primarily used by the people of Stuttgart to upgrade their limousines, not to equip robotic shuttles or taxis.
CEO Källenius has left the joint development of a robot taxi with the supplier Bosch.
»Car sharing will play an important role in the mobility of the future«
From a purely business point of view, the new strategy may make sense.
The mobility subsidiary of BMW and Mercedes has accumulated high losses over the years.
The costs for fleet operation and maintenance have so far been disproportionate to the income.
In addition, the Share Now fleet mainly includes discontinued models such as the i3 from BMW and the B-Class from Mercedes, so from the manufacturer's point of view, sharing is no longer suitable as a sales lever for the model range, which is now even more trimmed for luxury.
The pandemic, with many customers avoiding the use of shared vehicles, dealt an additional blow to the joint venture.
The two car companies prefer to invest the scarce capital in their core business, car manufacturing.
But in the long term, phasing out car sharing and other mobility services is a major risk.
It means that BMW and Mercedes have no functioning business model other than pure car sales.
This becomes a problem when private transport is increasingly pushed out of inner cities.
A trend that can already be observed in many metropolises.
"Car sharing will play an important role in future mobility," says Stefan Bratzel, Director of the Center of Automotive Management.
"Daimler and BMW have long been among the top performers in this area, and now they are giving away valuable experience and skills." In particular, if autonomous driving becomes more established in inner cities, the business with mobility services should become lucrative, says Bratzel: That could happen in this decade.
In this scenario, the mobility of the future will no longer be offered by BMW or Mercedes, but by Uber, Lyft - or Stellantis.
Other car companies such as Volkswagen and Hyundai are also continuing to experiment with transport services.
Bratzel therefore predicts that the mobility world will split in two: here the modern service providers with a variety of mobility offers, there the pure car manufacturers.
In this way, BMW and Daimler could become pure hardware suppliers for the large platforms and otherwise withdraw to their niche as premium manufacturers.
Others will then shape the future of mobility.
