As the autonomous/driverless vehicle wars heat up, what were once bitter rivals are now best of friends in a sectoral battle for road supremacy.
Let's be truthful; Uber is not a car industry; it is a software app that connects drivers with customers. That is their claim. So, when we take this claim into account, it is obvious that auto-making giants, such as BMW and Daimler Benz will take affront when such upstart newcomers to a century old industry try to muscle their way (or weasel) into a car CAPEX intensive industry market. It's the same issue if taxi services would try to take over the car market. Won't happen, and now it looks like the automakers are preparing to get rid of the middle-man (person) and replace Uber in the AV market. After all, who needs an Uber when all you need is your own bit of software and apply it to a global coverage that you already own.
BMW and Daimler Benz are going to merge their mobility divisions to do just that. They will not let software companies such as Uber and Waymo take away an inch of their market. With offices and a supply chain distributed globally, as well as maintenance and upgrades offered in every country around the world, all BMW and Daimler need to do is just take the AV tech they develop and put it under a personal rideshare app.
Daimlers Car2Go will work together with BMW's DriveNow and ReachNow while still competing on market share for their vehicles. Dieter Zetsche, chairman of Daimler and head of Mercedes-Benz, told the press in the name of both companies that "We want to combine our expertise and experience. As pioneers in automotive engineering, we will not leave the task of shaping future urban mobility to others. There will be more people than ever before without a car who will still want to be extremely mobile. We want to combine our expertise and experience to develop a unique, sustainable ecosystem for urban mobility."
Car2Go and ReachNow are rental companies and operate a combined fleet of over 20,000 vehicles in the US alone. Car2Go has 2.5 million registered customers. The potential growth for both is exponential when you consider the business models available to them and the proof of success. Once both companies sort out the app and how it works for them, add into this the future of AV you potentially break the monopoly of rideshare companies control over the for-hire market. Automakers are potentially their own best customer-operators and can just add to their current business models a car leasing/buying alternative for drivers. This new hybrid attached to the end of the car dealership will seal the end of rideshare companies such as Uber and Lyft since automakers have three big advantage:
- A localized Global access to local markets (infrastructure in place)
- A strong financial backbone, profitable and supported by capex.
- Ability to create incentives including access to cars, to maintenance and to upgrades.
With just these three advantages, automakers can rise up over the rideshare upstarts and AV developers and introduce competing businesses to steal drivers and bring about an auto-making revolution that will lower costs and raise driver income as well as increase customer satisfaction.