BMW CEO Harald Krueger, left, and Mercedes-Benz CEO Dieter Zetsche of Daimler, right, announced the agreement in Berlin. (AP)
Automakers Daimler and BMW say that trustworthy handling of personal data will be a key competitive advantage in their new joint venture that offers app-based services like free-floating car-sharing in big cities.
The two competitors for luxury car customers said Friday they are investing more than a billion euros (over $1.1 billion) in their combined digital and mobile services. Joining their efforts means they can more quickly achieve rapid growth and win dominant positions in car-sharing, ride-hailing and ticketless parking, they said.
The alliance underscores the auto industry's shift toward new technologies and business models based on software and mobile communications that don't necessarily involve owning a car. Carmakers are investing billions in order to meet competition from tech firms such as Uber, Lyft and Waymo.
Daimler AG's chief executive, Dieter Zetsche, said that combining forces meant that services like short-term car rental through a smartphone app had a chance "to go for growth, to go for No. 1 positions where possible."
He said the companies could offer users assurances that their data would be kept secure, amid recent questions about how tech companies are handling individuals' data.
Of course, the auto industry itself has not escaped trust issues, as Zetsche acknowledged with a brief reference to the debate over diesel technology in Germany. After Volkswagen was caught using software to cheat on U.S. diesel emissions test, diesel came under renewed scrutiny that found other carmakers' products emitted more pollutants during every day driving than during tests — a discovery that let to tighter emissions, renewed calls for diesel bans in some cities and a drop in diesel sales.
Between them, the two companies have more than 20,000 vehicles offered through car-sharing programs in 30 cities worldwide. Customers use a smartphone app to find and use cars parked around densely populated urban centers instead of at fixed rental locations. Customers pay by the minute rather than rent for days at a time.
Zetsche and BMW AG's Harald Krueger formally launched the alliance at a joint news conference in Berlin after regulatory authorities gave permission for the deal, announced last year, to formally close.
The alliance has its headquarters in Berlin and is organized in five different operations: charging services under the Charge Now brand, ride-hailing under Free Now, ticketless parking under Park Now, carsharing as Share Now and journeys across multiple modes of transport called Reach Now. The businesses have their own CEO and the two automakers will function as shareholders overseeing broad strategy while not interfering in the business's operations.