By Yuliya Chernova
In the past several years, start-ups like Tesla Motors have led large auto makers in introducing new technologies. “As a result, consumers may perceive larger companies as uninnovative dinosaurs at best, and actively resisting environmental and other technologies at worst,” wrote Kevin See and colleagues in a recent Lux Research report.
Possibly to resist that reputation and to stay in the innovation loop, some large automotive manufacturers have recently put their money into partnerships and investments in start-ups.
The latest example is Daimler’s $10 million equity investment in Carpooling.com–the largest ride-sharing service provider in Europe–which is planning to expand into the U.S., as Dow Jones VentureWire reported Thursday.
Consumers in many urban areas are searching for alternatives to driving their own cars, Daimler found, something that became evident from running its car2go service, which allows cars to be rented for short amounts of time.
“By participating in these trends, we can show that, as Daimler, we are relevant,” said Wilfried Steffen, head of Daimler’s business innovation unit, in an interview.
Seeking alternatives to buying a car and driving yourself everywhere in it isn’t a hippie phenomenon any more, said Markus Barnikel, chief executive of Carpooling.com.
The company’s ride-sharing service, which works by connecting drivers with empty seats in their cars with people interested in sharing the ride, was started by three German students; now the service helps transport one million people a month and operates in 40 countries. Drivers can charge per seat, with a small fee going to Carpooling.com.
Germany, which Bernikel called “a car-crazy nation,” may have been a good testing ground for the company’s launch in the U.S., which also is known for its love affair with the automobile.
Ride sharing is more popular in Europe than in the U.S., Barnikel said, which is the reason the U.S. offers a big opportunity. But suburbia is more of a challenge for ride sharing in the U.S. than in Europe, he said.
Car pooling in the U.S. declined between 1980 and 2009. According to a report by The Center For Climate and Energy Solutions, 10% of work trips nationally in 2009 were done via car pooling, down from 20% in 1980.
Since 2009, several trends have emerged to encourage car pooling. The price of gasoline rose as many household incomes were pressured by the economy. Last year, Americans spent the largest proportion of their household income on gas in more than 30 years. At the same time, social networking and mobile platforms have increased the interest and comfort of those who want to share rides.
Daimler’s investment in Carpooling.com is its second equity investment in a start-up. It also holds a stake in Germany-based MyTaxi.com, which is a flexible taxi ordering service. The deal also follows on the heels of General Motors backing car-sharing start-up RelayRides.
“Core attributes of the automobile’s cultural, technological, and economic role are coming into question as megatrends like sustainability, materials, and urbanization converge on the car,” wrote Lux Research analysts. That’s why we may see more deals between large auto makers and start-ups in the future.