BMW AG and Daimler AG today announced plans to invest about 1 billion euros, or $1.1 billion, into a joint venture that will compete with Uber Technologies Inc. in the urban mobility market.

Announced today, the investment puts into motion a partnership that the auto giants struck last March. BMW and Daimler are moving 14 existing mobility services under the wing of the new business. The services, which have a combined 60 million users worldwide, are being spread out among five subsidiaries that will each focus on a different market segment.

The most important of the bunch may be the newly inaugurated Free Now group. The subsidiary will manage BMW and Daimler’s ride-hailing services, which serve 21 million users in more than 130 cities worldwide.

Another subsidiary slated to have a big role is is the Share Now car rental unit. The group is taking over a 20,000-vehicle fleet spanning 30 cities along with a pair of accompanying mobile services, Car2Go and DriveNow, that enable users to rent cars through an app for short periods of time. 

By organizing their disparate services into market-specific groups, BMW and Daimler have laid the groundwork for potential product integrations further down the road. The companies might over time even combine each subsidiary’s apps into a single service to simplify the user experience for customers. This could make them more competitive with the likes of Uber, which provides access to everything from scooters to public transportation in unified interface.

Such consolidation might also be beneficial for the three other businesses in the new joint venture. The Charge Now group operates a network of electric car charging stations, Park Now helps drivers find parking spots and Reach Now provides a pair of apps that enable users to centrally access different types of transportation.

The planned $1.1 billion investment will be used to add nearly 1,000 new employees across the five groups. In the longer term, BMW and Daimler plan to build more integrations between their mobility services with a focus on addressing the rise of autonomous driving.

“We have a clear vision: these five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously and interconnect with the other modes of transport,” BMW Chief Executive Harald Kruger (pictured, left, next to Daimler counterpart Dieter Zetsche) said in a statement.

The joint venture aside, BMW and Daimler are mostly pursuing their respective autonomous vehicle projects separately or with external partners. In November, Daimler teamed up with auto parts maker Robert Bosch GmbH to develop a self-driving taxi service that will launch later this year.

Photo: BMW