German car manufacturers BMW, Daimler, and Volkswagen are taking on Uber by offering ride-sharing services. These companies are capitalising on the country’s strict regulations that have hindered Uber’s growth. Car2Go, owned by Daimler, and DriveNow, a joint venture between BMW and car rental firm Sixt, are two such services. These companies allow customers to rent cars for short periods using a smartphone app, similar to Uber’s model.
However, unlike Uber, these services let drivers take the wheel themselves. As a result, they avoid legal issues related to employing drivers. In 2016, Car2Go and DriveNow reported a combined total of 20,000 vehicles in 31 cities worldwide. The number of users has also been steadily increasing.
In response, Uber has been trying to adapt its model to comply with German regulations. It now offers services like UberTaxi, which uses licensed taxi drivers, and UberX, which uses licensed private hire vehicle drivers.
Meanwhile, Volkswagen has launched Moia, a subsidiary focusing on ride-sharing, electric vehicles, and autonomous driving. The company plans to generate a substantial portion of its revenue from such services by 2025.
In essence, traditional car manufacturers in Germany are reshaping their business models to compete with Uber by offering similar services. These companies are leveraging the strict German regulations that have limited Uber’s expansion in the country.
Go to source article: https://www.nytimes.com/2017/02/08/business/germany-bmw-daimler-volkswagen-uber.html