Mercedes-Benz Teams Up With U.S. Start-Up Via on Ride-Sharing Shuttle Programs

The joint venture will establish on-demand services in major European cities.

Mercedes-Benz

Mercedes-Benz parent Daimler is no stranger to sharing services. Its Car2Go division rents Smart Fortwos in many cities worldwide. But now the German company is trying something different. Daimler will invest $50 million in a joint venture with Via to use the U.S. startup's ride-sharing platform for on-demand shuttle services in Europe.

The program will launch in London later this year, and eventually expand to other cities. All services operated under the joint venture will use Mercedes vans.

Via users hail a ride through a smartphone app, just like ride-sharing services such as Uber and Lyft. But the use of vans means multiple passengers going in the same direction can be placed in one vehicle. It's similar in concept to the Chariot shuttle service operated by Ford in some U.S. cities.

Daimler claims a van-based ride-sharing service will reduce wear and tear on roads by consolidating riders into a smaller number of vehicles. The automaker also believes these shuttle services could be a viable alternative to traditional buses. Instead of operating on a fixed route, vehicles could go where the passengers are, Daimler claims, increasing efficiency.

Mercedes-Benz and Via have worked together since 2015, but this latest agreement brings the two companies much closer. The joint venture between Daimler and Via will be a distinct corporate entity, based in Amsterdam. As part of the agreement, Daimler will also get a seat on Via's board. It's the latest move by an automaker to get more deeply involved in sharing services, either by purchasing an existing startup (see Ford and Chariot) or creating an in-house competitor (General Motors' Maven).

Because they lessen the need to own a car, car-sharing and ride-sharing services could have a major impact on the auto industry. Their footprint is expected to grow as more people get turned on to the convenience of not having to own a car, and as autonomous vehicles increase the potential profitability of these services. So it's safe to say the joint venture between Daimler and Via probably won't be the last of its kind.