For almost a decade, Mercedes’ parent company, Daimler, has been preparing for a future where fewer people buy a car.
In 2008, the German automaker launched Car2Go, a car-sharing service that amassed two million members in October 2016.
Last April, Daimler launched Moovel, a series of apps that allow users to book and pay for public transportation and see how well it integrates with other transit options, such as bike- or ride-hailing services, to get to a final destination.
And now Daimler is investing in Via in order to launch the ride-sharing service in London by the end of the year and other European cities to follow. Via and Daimler did not disclose the funding amount in its Monday announcement, but Mercedes-Benz Van will invest an additional $US50 million in Via as part of the new partnership.
The Via partnership is just the latest in a series of Daimler investments geared at preparing for the decline of car ownership. Via is essentially an on-demand bus by allowing users to book a ride in a shuttle that’s heading in the same general direction.
“By deepening our cooperation with Via, we are thus taking the next logical step in the context of our strategy for the future and are expanding our range of new mobility services,” Volker Mornhinweg, Head of Mercedes-Benz Vans, wrote in a statement.
The percentage of households without a car has increased slightly in the last five years, the most recent data from the American Census Bureau shows. Experts in the auto industry expect the trend to continue as millennials increasingly elect to live in cities where it’s expensive to own a car.
A recent study showed people use cars less frequently when a ride-hailing service is available.
Daimler got a head start on the pivot to mobility services, but other automakers have since followed suit. Toyota recently invested in Grab, an Uber competitor in Southeast Asia. General Motors, Ford, and BMW have all launched their own car-sharing services.
It’s still unclear whether or not the death of car ownership is imminent or still a more distant reality.
Although no-car households are becoming slightly more common, a 2016 Strategic Vision Study found that millennials would still rather own a car than rely on ride-hailing services. In 2014, millennials bought more cars than Generation X for the first time.
Still, car companies seem to think the threat is big enough to warrant multi-million investments in mobility services. How these services will ultimately affect public transit, congestion, and car-spending habits in the long-term remains to be seen.