Silicon Valley has unequivocally changed the landscape of the auto industry. In 2010, asking a stranger to give you a ride home was nobody’s favorite transportation option. Yet, in 2019, ride-hailing services like Uber and Lyft are a leading transportation choice. Even more disruption is inevitable as Google, Uber, Lyft, and others race to become the first driverless car operator.
This disruption has forced traditional car manufacturers to adapt to keep up with Uber and other innovators. Rivals Daimler (Mercedes-Benz) and BMW have agreed to a $1 billion joint venture. The companies believe the project will be a “global gamechanger” that “maximize[s] [their] chances in a growing market.” Daimler and BMW hope to fend off companies like Uber by focusing on five areas: “car-sharing, ride-hailing, parking, charging, and multimodal transport.”
Interestingly, Daimler and BMW are not alone. Collaboration among global automakers has increased as Google and Uber have pressed them to be on the forefront of auto technology like autonomous driving systems and electric vehicle platforms. For example, Ford and Volkswagen have not only agreed to build vehicles together, but also jointly “investigate” the development of next generation vehicles. General Motors, SoftBank, and Honda announced a similar joint effort.
Ultimately, cooperation among these rival car makers is an encouraging sign. After nearly 150 years of combustion engines, market forces are compelling car manufacturers to commit significant capital to innovation.