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Automakers Race to Get Ahead of Silicon Valley on Car-Sharing

SEATTLE — On a recent overcast afternoon in this city’s Belltown neighborhood, a driver pulled up in a gleaming new BMW X1 sport utility vehicle just a few minutes after a few swipes of a smartphone app had summoned it.

This was not a car dispatched by Uber or Lyft, the two tech companies that are the Coke and Pepsi of ride-sharing services. Instead, the vehicle belonged to the company that made it, BMW Group, through a service it owns called ReachNow.

The ride-sharing service represents the latest effort by a car manufacturer to get a grip on the technological trends that could disrupt their businesses by making vehicle ownership — and eventually even drivers — unnecessary. BMW and Daimler, maker of Mercedes-Benz, are two of the most aggressive carmakers building their own “mobility services” to prevent Silicon Valley’s upstarts from keeping all the spoils themselves.

For both, a major focus has been building short-term rental services; customers drive themselves. On Thursday, ReachNow branched out to ride-sharing (in which drivers pick up passengers) by expanding a small private test of the service in Seattle to all of the service’s members in the city.

Both Daimler and BMW said their current mobility services were helping them with know-how, including valuable data about customer patterns, to prepare them for a future when their cars drive themselves. When a customer can hail a fully autonomous vehicle through an app (which could take a decade or two), they say the distinction between the two mobility services will go away.

“When you have autonomous driving, car-sharing and ride-sharing will become absolutely the same,” said Bernhard Blättel, vice president for BMW i Mobility Services, which includes its ReachNow service.

Daimler beat its luxury auto rival to the car-sharing market in 2008 with its Car2Go service in Germany. Now it has more than 2.4 million members in 26 cities across nine countries, with more than 800,000 members in North America. While it started with two-seater vehicles from Daimler’s Smart division, the service now lets customers rent the company’s more luxurious Mercedes GLA and CLA models.

Car2Go is a twist on traditional car-rental services: It allows members to hop into vehicles for a quick trip to a grocery store or a concert; they pay for use of the car by the minute (hourly and daily rates are available, too).

What’s more convenient is that customers can return the cars by parking them on the streets; a Car2Go smartphone app locates the cars for pickup. The company has parking arrangements with cities so customers don’t have to feed meters.

BMW began its first car-sharing service, DriveNow, in Europe in 2011 in a joint venture with the rental car company Sixt; it now has about 875,000 members for the service. Last year it established ReachNow, its North American car-sharing service, as a wholly owned subsidiary based in Seattle. Now about 50,000 members in that city; Portland, Ore.; and Brooklyn can rent various models from BMW’s Mini brand, along with other BMW models.

Last year, General Motors formed a car-sharing service called Maven after the company acquired the assets of the start-up Sidecar. Earlier this year, GM introduced a related service, Maven Gig, that lets drivers for Lyft, Uber and ride-sharing services rent Chevy Bolts.

Including Daimler, BMW and services from other companies, there were over 1.9 million car-sharing members in North America, more than double the number five years ago, according to estimates by Susan Shaheen and Adam Cohen, researchers at the University of California, Berkeley.

Last year, U.C. Berkeley’s Transportation Sustainability Research Center, which Ms. Shaheen co-directs, published results of a three-year study of nearly 10,000 Car2Go members in five North American cities. It found that the car-sharing service reduced private vehicle ownership and miles traveled in cars in those cities; this, in turn, reduced greenhouse gas emissions. From 2 to 5 percent of the Car2Go members sold a vehicle, and an additional 7 to 10 percent did not acquire one because of the service.

While their core businesses remain making and selling vehicles, car manufacturers are feverishly experimenting with new services that get people using their products in an age when car ownership is no longer as appealing as it once was.

“If they stay away from those trends and don’t insert themselves into this evolving ecosystem of mobility services, there’s a risk they get left behind,” Ms. Shaheen said.

While manufacturers are starting their car-sharing services long in advance of the availability of fully autonomous vehicles, much of what they are doing today is a prelude to such vehicles’ arrival. “We gain valuable experience and knowledge when it comes to aspects that will be relevant in a robotic vehicle scenario,” said Joerg Lamparter, head of Daimler Mobility Services.

That includes knowing how to operate a fleet of vehicles in a city, keeping them clean and running smoothly and ensuring that the cars are fueled or charged up. Data helps them understand how to rebalance the location of vehicles to meet anticipated demand from customers.

Today, the car-sharing services have to send an employee out to move vehicles to more optimal pickup locations. In the future, the cars will do that themselves. But a thicket of technological, safety and policy issues will have to be ironed out first.

BMW has announced it is working with Intel to start production of self-driving cars by 2021. Daimler has announced a partnership to bring self-driving cars to Uber’s service.

While ReachNow’s new ride-sharing service in Seattle may seem like a detour from its start in car-sharing, it’s just another way for BMW to get more use from the growing number of cars it is putting on roads in the city.

Since December, ReachNow has been privately testing its service, with about 2,000 members. It has about 80 drivers, who work for an independent company. For now, ReachNow will only pick up ride-sharing customers in the central areas of the city, though they will take customers to any neighborhood and the airport.

Steve Banfield, the chief executive of ReachNow, said in an interview at the company’s headquarters that the company was seeking to give people a variety of options for getting around a city. “Sometimes they want to be driven,” he said. “Sometimes they want to drive. Sometimes they want to take a car for several days, sometimes for 10 minutes.”

“By creating a set of services that blend these use cases, it enables us to learn how people want to move in and around a city,” Mr. Banfield said. “It really gets us a lot closer to the consumer in terms of their mobility needs going forward.”

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