Daimler, BMW shutter American car-sharing venture

BERLIN -- BMW AG and Daimler AG said they would shutter their joint car-sharing operation in North America and in some European cities early next year, further clouding the outlook for car-sharing services and adding to the troubles facing the German automakers.

Continue Reading Below

Share Now, which allows users to download an app to rent cars by the minute, day, or week, will stop operating in cities including New York, Washington, London, and Brussels by the end of February, according to a company statement Thursday. The decision comes roughly a month after Daimler said it would review the portfolio of its digital mobility unit, with which it shares investments in car sharing, ride hailing, electronic car charging and parking with BMW.

The pullback scrambles the outlook for legacy carmakers like BMW and Daimler, which have been searching for new options for growth even as they contend with a phalanx of issues from tightening emissions standards in Europe, costly investments to develop electric vehicles, falling global demand for cars and the emergence of new competitors in the tech sector and in China.

TRUMP: FORD WILL CREATE 'ANOTHER 3,000' MICHIGAN JOBS

Stuttgart-based Daimler said the decision to end the Share Now business in North America and some European markets will lead to an impairment in the lower-three-digit-million euro range during the current quarter, and reduced its outlook for return on equity in its Daimler Mobility segment for the full year 2019.

On Thursday, shares of Daimler fell 1 percent to EUR49.72, while shares of BMW fell 1 percent to EUR74.28.

In February, the two automakers said they would invest EUR1 billion ($1.14 billion) to share equal stakes in a mobility services company now called Your Now, under which Share Now -- a merger of the car-sharing brands Drive Now and Car2Go -- was bundled.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

The firm includes other services such as ride-hailing app Free Now as well as Park Now and Charge Now for digital parking and electric vehicle charging in select cities. The combined platform has nearly 90 million customers, up 44 percent since the beginning of the year, according to a statement from Daimler.

Both firms have said they are investing in digital mobility services as consumer behavior around driving and transport is changing, but have emphasized the need to be profitable.

"Digitization adds to the increase in complexity of market and product demands and reflects that our industry is becoming more and more challenging," said Oliver Zipse, chief executive of BMW, on an earnings call with analysts last month. "Anyone who wants to be successful in the long run must master this growing complexity and, at the same time, be and stay profitable."