When he was at Expedia Inc, Dara Khosrowshahi’s perspective on the competitive landscape came from the elevated position of running one of the biggest global online travel agencies.
Now that he is running Uber, he has a new vista upon which to gaze. The competitive landscape in “mobility solutions” – the now-accepted shorthand for what used to be the taxi-app/ride-hailing/car sharing sector – is different but no less challenging.
His “to do” list for the first few days in the Uber hotseat was unlikely to include “set up a Google News alert for Daimler” but news this week from the German automotive giant is a sign of how competitive, how global and how well funded the mobility sector has become – not a million miles away from online travel, it might be said.
Daimler’s announcement relates to Via – a US-based mobility app which currently handles over a million rides per month in New York City, Washington DC and Chicago and which specialises in the on-demand shared ride segment of mobility.
Daimler’s Mercedes-Benz Vans unit is forming a new joint venture with Via, to be based in Amsterdam, which will combine its vehicles with the Via platform to offer shared rides around European cities. Mercedes is putting $50 million into the JV and the new service will launch in London this year with other European cities to follow.
Via also has an interesting B2B revenue stream which attracted Daimler’s attention- it licences its proprietary technology to third parties who want to optimise their own on-demand ride-sharing. These partners are other transport service providers and local public transit operators.
The idea is that Mercedes-Benz will design and build vehicles specifically for the on-demand shared ride sector. There are many automotive businesses with investments in the mobility sector but the “fusion of Via’s technology with the engineering of Mercedes-Benz” is one of the closest tie-ups yet.
Daimler is also investing in and forming a strategic partnership with Via’s overall business. Details relating to Via’s raise are not disclosed, although reports suggest that Daimler has led a $250 million funding round (including the confirmed $50 million into the European JV).
Via has now raised nearly $390 million since it was founded in according to its Crunchbase entry.
The Via deal is the latest attempt by Daimler to diversify its interests beyond manufacturing vehicles. It has identified connectivity, autonomous driving, flexible use and services and electric drive systems as areas of future growth and has earmarked funds to build up these units.
Daimler is already active in mobility. Earlier this year it took a stake in Careem, a Middle-East based mobility business. It owns a majority stake in MyTaxi, which became Europe’s biggest taxi app when it took over Hailo and has a stake in professional driver service Blacklane.
Klaus Entenmann, chairman of Daimler Financial Services board, said of the Via tie-up: “We are thus further expanding our digital mobility services” adding: “We have the financial resources that are required for this growth path.”
See also Ctrip
Elsewhere, a report from China suggests that Ctrip is looking to carve out a niche in the taxi app sector through its Ctrip International Driver initiative, which allows Ctrip’s overseas clients access to a platform from where they can book a Chinese-speaking driver, in-destination, to show them round and take them on sightseeing tours.
Ctrip is planning to ramp up this business line with a global recruitment campaign this month, although the numbers are impressive so far. It launched in October 2015 has more than 10,000 full-time drivers on it books, in more than 1,000 cities across more than 100 countries. The platform handled 10,000 bookings this July alone.
Khosrowshahi’s role at Uber is very much bigger picture rather than micro-management, and these are the sort of deals, partnerships and tie-ups happening in the mobility space that Uber needs to be aware of and respond to, even if that response is to not respond. Uber has more immediate concerns with its drivers than training them up to be tour guides (although one of its peers, Ola, is doing just that in India. As indeed is Didi in China.
With his colours nailed to the IPO-within-18-36-months mast, there will be more activity in mobility which will be factored into how Khosrowshahi presents Uber’s IPO to the market. New investors (to say nothing of the existing cohort who have pumped nearly $9 billion into Uber so far) will want to hear about how Uber plans to compete in a segment which has grown from an easy way to book a taxi using an app into something which could have a profound impact on how humankind lives its life in the future. And what is the net EBITDA margin on that?
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