Mercedes-Benz plans to launch ride-sharing rival to Uber in London

Mercedes-Benz teams up with a US startup to enter the ride-sharing market across a number fo European cities. Customised Mercedes-Benz Vito and V-Class vans are planned to be used as a ride-hailing alternative in London

Daimler will start ride-sharing shuttles in London later this year, expanding its cooperation with US startup Via Transportation, whose on-demand service racks up 1 million rides a month across New York, Chicago and Washington.

The mobile app-based pick-up service, based in Amsterdam, will be rolled out soon to more European cities, Stuttgart, Germany-based Daimler and Via said Monday in a joint statement.

Via, working with Daimler since 2015, plans to raise a total of $200m for the expansion, people familiar with the process said.

While Daimler is the lead investor, the parties didn’t disclose a funding amount. Adding to the strategic investment, Daimler’s Mercedes-Benz Vans unit will contribute $50m to the new partnership.

“On-demand ride-sharing offers many new ways of making city traffic efficient, needs-based and sustainable,” said Volker Mornhinweg, head of Mercedes-Benz Vans. “Via is one of the most successful providers in the growing ride-sharing sector while Mercedes-Benz Vans has the perfect vehicles.”

Carmakers are increasing investments in partnerships with companies offering new services as urban consumers show less interest in owning a car.

Toyota last month invested an undisclosed amount in Grab, Southeast Asia’s leading ride-hailing operator, a year after it bought a small stake in San Francisco-based industry heavyweight Uber.

Offering rides in specially customized Mercedes Vito and V-Class vans will boost Daimler’s suite of services beyond selling vehicles, in addition to its Car2Go car-sharing program and Mytaxi hailing and Moovel transport apps.

The venture with New York-based Via will be open to cooperating with public-transport authorities for licensing, Daimler said.

The Via service works by connecting multiple passengers who are headed the same way, allowing riders to share a vehicle.

It was first offered in New York in 2013. Users request a shared ride through an app, and an algorithm finds a suitable vehicle headed in the same direction, reducing detours.

Combining Via’s technology with Mercedes-Benz Vans was “ideal for our vision of offering efficient, affordable, sustainable, and convenient shared rides everywhere,” Via chief executive Daniel Ramot said in the statement.