FREE NOW: BMW and Daimler declare war on Uber&Co.

Since 2009, mytaxi from Hamburg has been arranging taxi rides via an innovative app, which was unique until then. Now, however, the majority shareholder Daimler has decided to give up the previous brand name and to merge with the new provider FREE NOW. This is an important step in order not to leave the field to the competition.

What is FREE NOW?

In order to be able to offer all customers an even more comprehensive service in the future, Daimler and BMW intend to bundle their mobility services. To this end, the driving services Clever Taxi, Beat, Kapten and mytaxi will be transformed into the service provider FREE NOW as part of a joint venture. The focus of the new brand will be on so-called ride hailing. Customers can book a private ride, a taxi or even an electric scooter via a new app. The merger will also make FREE NOW available to customers in more and more cities in Europe.

Who else is in on it?

In addition to the new mobility service provider FREE NOW, BMW and Daimler are forging further collaborations to make their own offerings even more attractive. For example, those who have been using the car sharing services of DriveNow or Car2Go will in future be able to use the existing services and much more under the name ShareNow. But even when it comes to charging electric cars, the two premium vehicle manufacturers want to join forces from now on. To this end they have created the brand ChargeNow. In addition, the apps RingGo, Park Mobile, Park Line and Parkmobile had the task of enabling their customers to use car parks without a ticket and to reserve parking spaces. The four providers are now concentrating BMW and Daimler under the ParkNow brand. Finally, customers have the opportunity to use the services of ReachNow. The core task of the app is the intelligent networking of various traffic services.

Why did BMW and Daimler decide to cooperate?

The market for mobility services is highly competitive - no question about that. Established automobile companies are facing increasing competitive pressure, particularly as a result of the advancing digitalization. As a result, financially strong online brokerage services such as Uber and Lyft from the USA are pushing into the market. However, competition from the Far East is also gaining ground. For example, DiDi, the leading vehicle broker from China, is on course for expansion. Via its app, customers can make use of various driving services as well as a bicycle rental service.

Necessary step in the right direction

If the two German premium manufacturers do not want to lose ground with their mobility services, they must effectively combine and realign their activities. This is obviously the conclusion drawn by the two CEOs, Harald Krüger and Dieter Zetsche. This is why Daimler and BMW want to expand their range of different mobility services and thus make them even more attractive for customers. They also hope to achieve not inconsiderable economies of scale due to their greater market power.

To achieve this, the two groups intend to invest a billion euros together in FREE NOW, ShareNow and ReachNow, among others. This step seemed urgently necessary from the perspective of the two top managers from Munich and Stuttgart. After all, digital players such as DiDi and Uber represent serious competition in the field of mobility services, not least because of their enormous financial power. Even though the cumulative turnover of Daimler and BMW currently amounts to a comparatively low three billion euros, the potential of this growth industry is considered extremely attractive. This is reason enough not to leave Uber & Co. alone in this market segment.

What does that teach us?

Digitisation is changing industries in an unprecedented way. New competitors are entering the market and are attacking their own business model at lightning speed or even making it partially or completely superfluous. This is why new paths must be taken, as the old paths are no longer followed by the new consumers.

"He who does not keep up with the times, keeps up with the times", Josef Neckermann