BMW Group-Daimler AG joint venture will take mobility 'to the next level'.

19. December 2018
ca. 3 minutes

 

 

Tony Douglas, head of brand, BMW Group Mobility Services, likes to tell anecdotes. About his mum in his Scottish homeland who makes use of on-demand buses (a simple phone call gets her taken directly to the city rather than waiting around at a bus stop) and his kids, who have a range of travel options, not just “dad’s taxi”.

But the anecdote that may resonate most with businesses comes from his first few weeks at BMW Group, more than 15 years ago. He had a meeting in downtown Munich and decided to use the city’s S-Bahn train service to get there. He was met by his displeased boss, who bellowed: “Douglas! You’re working for a car manufacturer, next time take the car to the meeting.”

Today, no one would bat an eyelid if an employee chose to use public transport to get to a meeting. Businesses would rather staff used the ‘smartest’ mode of travel and even to question whether a face-to-face meeting is necessary or whether a tele or video conference could take place instead.

The merger of BMW Group and Daimler AG’s respective mobility services businesses has been approved by the relevant competition authorities, including the European Commission and the anti-trust authorities in America. Daimler’s Car2go and Moovel will be added to BMW Group’s car-sharing and on-demand mobility mix. The deal will also mean combined ride hailing services, parking and electric vehicle charging. It’s an interesting move considering BMW Group and Daimler AG have been fierce rivals for the past 100 years. But Douglas points out that they will remain competitors in their core businesses, saying “we’re not going to work together to build cars”.

However, bringing together their mobility offerings in a 50:50 joint venture allows them to scale their businesses. “We’re doing okay but we’re not at critical mass in the market,” he says. “That’s why both parties (BMW Group and Daimler AG) looked at each other and said ‘well, actually we could do this together, it would make a lot more sense to take us to the next level’.”  

Several mobility services such as mytaxi, ParkNow or Moovel will be part of the joint venture.

 

When BMW Group started its mobility services business eight years ago it had just five employees. Today that has grown to almost 1,000 and it has a global customer base of more than 26 million. DriveNow operates in nine countries and has brought new customers to BMW and MINI (85% of its customer base were not in touch with the brands beforehand), while ParkNow operates in 11 countries (in the UK it is branded as Parkmobile and RingGo), and charging is in more than 100.

As well as providing access to public charging through ChargeNow, BMW Group Mobility Services provides charging and energy management solutions to other OEMS (it set up a separate legal business, Digital Charging Solutions, to do this). Sustainability is an important factor for the BMW Group Mobility Services.

Currently, 15% of the DriveNow fleet of more than 6,000 vehicles is electric. In Copenhagen alone it put in 350 BMW i3s “overnight”, which “changed the whole landscape of that city”, Douglas says. He adds: “When we get the next generation out, when the cars can be driven four or five times longer than they are now, that would help a lot.”

Being in mobility services is a logical progression for BMW Group. Douglas says the brand started in the “owning economy” (the “business of selling cars for cash”), got into the “financing economy” with the launch of BMW Financial Services in 1971, and is now heading to the “on-demand economy”. 

The latter is attractive because it’s no longer about selling “one customer one car”. Instead, “you’re basically selling one car a thousand times”, he says. While major corporates won’t move away entirely from providing one company car to one driver, Douglas believes the next generation of employees will demand choice, particularly in urban areas.

“You’ve got to position this as a lifestyle choice and not a utility. We’d always position ourselves as being a premium offering - we play to our strengths.”

The full interview was published in the magazine Fleet News.    

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