Report: Uber Wants BMW-Daimler Ride-Hailing Service
Uber reportedly is ready to pony up $1.2 billion to acquire Free Now, the ride-sharing service co-owned by BMW and Daimler.
Daimler is ready to sell, but BMW is more inclined to offer Uber a stake in the business instead, according to Germany’s Manager Magazin.
Bloomberg News reported Uber’s interest in a purchase last month but didn’t indicate that an offer has been made or that BMW and Daimler feel differently about a possible deal.
The two carmakers agreed early last year to combine their existing mobility services—car sharing, ride-hailing, parking, electric vehicle charging and multi-modal trip planning—into a 50:50 venture called Your Now.
They also pledged to invest a combined $1.1 billion to grow the business and attract more partners. The hope was that integrating the various enterprises would help achieve enough scale to make a sustainable profit.
But the venture has struggled to reach that objective. Within the first year, BMW and Daimler shut down their Share Now car-sharing operations in North America and exited markets in Belgium, Italy and the U.K. They cited the same challenges in all cases: high operating costs and “infrastructure complexities.”
Uber’s sole interest in the Berlin-based joint venture is its ride-hailing business. Buying it would expand the American company’s market share in Latin America.
More important, an acquisition would bolster Uber’s rocky presence in Europe, where it has battled stiff opposition from regulators and conventional taxi businesses for years.
Just last month Uber was given a third chance by local regulators in London to overcome a “pattern of failures” regarding driver vetting and passenger safety and prove itself “fit and proper” to operate in the city.
Where’s the Money?
Your Now isn’t alone in a quest for viability. In July, PSA spun off its 4-year-old Free2Move startup, which offers a similar portfolio of services on a more modest scale, as a freestanding company in hopes of integrating its offerings and accelerating growth. PSA CEO Carlos Tavares insists the company, with 1.2 million active customers, is “step by step making money.”
That’s more than can be said for Uber.
It has spent billions of dollars building its huge but still unprofitable base of more than 90 million monthly users in more than 63 countries. Last year Uber posted a net loss of $1.1 billion on adjusted net revenue of $3.7 billion.
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