VW, BMW invest in ride-sharing apps

BY HAITHAM RAZAGUI | 27th May 2016


ALMOST simultaneously with Toyota’s announcement this week that it will make strategic investments in global ride-sharing giant Uber, Volkswagen Group and BMW revealed they are also getting into bed with technology startups in the transportation sharing economy.

VW Group has made a $US300 million ($A451.3m) strategic investment in Israel-based Uber competitor Gett, while BMW’s iVentures venture capital division has pumped an undisclosed sum into Californian corporate carpooling service Scoop.

This latest round of tie-ups between global car-makers and app-based ride-sharing startups follows the move by General Motors early this year to invest half a billion US dollars into Lyft and other ride-sharing operators.

BMW has form in this area, having invested in hybrid taxi-hailing and ride-sharing app Summon in early 2014, but Mercedes-Benz parent company Daimler can claim to be a pioneer in the sector after launching its car2go sharing service in late 2008.

While BMW-backed Scoop only launched in August last year, Volkswagen Group’s new ride-sharing partner Gett has a presence in 60 cities worldwide, is used by around half of all of London’s iconic black cabs and has more than 4000 corporate customers.

In contrast to the legal grey area occupied by the likes of Uber, Gett exclusively uses drivers who are licensed by their local jurisdiction to transport paying passengers.

The deal with Gett is part of VW’s goal for “a substantial share of sales revenue” to come from these types of market-disrupting new services by 2025. It foresees huge international expansion in on-demand mobility services and wants a slice of the profits.

Wolfsburg’s far-sighted ambitions do not end there. The company sees Gett’s use of ever-evolving, analytics-based predictive algorithms and artificial intelligence as “the foundation for a viable on-demand autonomous car operation”.

Meanwhile, Scoop snared the BMW money in its recent $US5.1 million fundraising, which also attracted investments through a number of startup-specialist venture capital firms.

Unlike conventional on-demand ride-sharing, Scoop journeys are pre-scheduled, using algorithms to calculate the most efficient way of sharing a vehicle or route.

Head of BMW iVentures, Ulrich Quay told startup journal Tech Crunch he was impressed by the cost-effectiveness of the corporate-focused Scoop system.

“Scoop is more appealing to employers than typical ride sharing services because it’s much less expensive,” he said. “It’s also attractive to employees who could receive an incentive to carpool through a subsidy or a cheaper or better parking space.”Tech Crunch provided the example of Scoop client and computer networking giant Cisco, which heavily subsidises journeys using the service so that employees pay just $US1 per ride. Electric car manufacturer Tesla and social media service Twitter are also among Scoop’s client list.

BMW iVentures also has a stake in pre-booked parking app JustPark, social navigation system Life360, global electric car charging infrastructure provider ChargePoint, British EV charging network Chargemaster, mobility data analytics firm Zendrive, transportation aggregator Moovit and on-demand valet parking app Zirx.

Many of the iVenture-backed services have been integrated into BMW and Mini infotainment systems.

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