US-based Uber Technologies is considering the acquisition of the ride-hailing joint venture ‘Free Now’ from Daimler (commonly referred to as Mercedes-Benz) and BMW, says sources.
Both Daimler and BMW are producers of luxury vehicles and are based out of Germany. Experts describe this as a move that could raise Uber’s market share in Europe and Latin America.
After the venture’s attempts to draw additional investors failed to gain traction in the midst of the coronavirus pandemic, Uber expressed interest in a possible acquisition of Free Now, according to the people familiar with the matter. The competitive market that ride-hailing companies face might complicate any deal, which could make it more difficult to settle on a price, they said.
There is no guarantee that the deliberations would lead to a deal, the sources caution.
Last year, Daimler and BMW combined their mobility operations and integrated them into a joint venture called ‘Your Now,’ consisting of five companies, including the Free Now ride-hailing service. Free Now used to work as MyTaxi and has incorporated ride-hailing apps, including Kapten from France, Beat based out of Greece and Clever Taxi from Romania.
Recently, Uber has been trying to shed minority holdings in many ride-hailing operations, including portions of its stakes in Didi Chuxing of China and Grab, the ride-share business of Southeast Asia. It also decided to sell its European freight business and some of its investments in Yandex, a multinational company in Russia that focusses on internet related products and services.
Though Uber has halted its global aspirations, it is still functioning in more than 10,000 cities in approximately 70 countries. Recently, a London jury granted an 18-month license extension to the ride-hailing service, enabling the company to continue operating in its largest European market.
The launch of Free Now by Daimler and BMW represents the emphasis within their core automotive operations on generating cash and improving performance. With General Motors shutting down its own car-sharing company earlier this year and Ford Motor stopping its Chariot shuttle service in 2019, carmakers have, in general, been scaling back their mobility service ambitions.
For tech companies and automakers alike, making money from mobility services has proved a challenge. Transport regulations differ greatly across regions and even before the COVID-19 pandemic struck the sector hard, it was hard to scale up operations.