German carmakers Daimler and BMW have announced a joint venture to deal with shared travel, parking and charging of electric cars.
The purpose of the new company is to compete with the services provided by shared travel companies like Uber, reports Reuters.
The manufacturers of luxury cars will invest over € 1 billion in their joint venture in attempt to enter a new field, part of the shared economy.
According to the consulting firm PwC, the manufacturers would face marginalization, as a result of the cash-generating tech startups, unless they develop services based on their current operations.
The initiative is taking place against the backdrop of a frantic expansion of shared travel companies. China's Didi Chuxing seeks to expand its business in Latin America, while Uber is strengthening its dominance in the US market.
"Future cooperatives with other suppliers, including stakes in startups and established players, are also a possible option," said Daimler CEO Dieter Zetsche.
Daimler's Car2Go Shared Car Brand will be merged with BMW - DriveNow, ParkNow and ChargeNow, both of which will own 50% of the joint venture.
The joint venture will have 5 business niches - smartphone route management and reservation service, electric car charging, taxi, parking and shared travel service.
"These five services will merge even more to form a single portfolio of mobile service based on electric and autonomous vehicles that park and load autonomously," says BMW Executive Director Harald Krueger.
BMW and Daimler develop autonomous cars that would allow them to use their own production for their new business.