Frenemies Cooperate Daimler to Provide Uber with Robot Cars

Automaker Daimler and cab-hailing service Uber are teaming up in a partnership that will see self-driving Mercedes Benz cars made available on the mobility platform.
Quelle: Daimler
Self-drivign Mercedes Benz: Coming to an Uber app near you.

The stage seemed set for mutual antipathy last June when the chief executives of automaker Daimler and cab-hailing service Uber met on stage at the Noah Conference in Berlin: In one corner, Dieter Zetsche, the wise traditionalist, in the other, Travis Kalanick, the upstart from Silicon Valley.

But the meeting turned into a summit of harmony. The pair were on first-name terms and praised each others' work. And off-stage, Mr. Kalanick and Mr. Zetsche seem to have discovered that they have a lot in common.

On Tuesday evening, the Daimler boss revealed that the German luxury carmaker plans to cooperate closely with the U.S. mobility service. "As part of the joint venture, Daimler plans to offer autonomous driving Mercedes Benz passenger cars on the global platform of Uber in the coming years," the company said.

Mr. Kalanick was also enthusiastic. "Back then, Dieter talked about frenemies, but we found that we can be good partners," he wrote on the company's blog.

The move came at an opportune time for Daimler, with the firm only able to give a lukewarm forecast for its 2017 earnings outlook on Thursday. Profits will rise only "slightly," it said, announcing that adjusted earnings before interest and tax rose 3 percent to €3.6 billion ($3.9 billion) in the fourth quarter. Experts put the forecast down to its aggressive spending on developing next-generation cars, including autonomous vehicles.

To build a self-driving fleet, Uber needs partners in the industry.

The partnership between Daimler and Uber is the start of an unusual friendship. Mr. Zetsche had repeatedly spoken of frenemies when he talked about the new competition from Silicon Valley. The term -- a mashup of friend and enemy -- aptly describes how the carmaker wanted to treat the multibillion-dollar disrupter. The platform has, after all, set a goal to radically change the industry’s business model. But with joint projects such as mapping service Here, the German car industry has sought to close ranks against the new U.S. competition.

The new Uber cooperation is surprising at first glance. Due to their aggressive expansion strategy, the Americans were known in Germany as the "Taxi Nightmare" but are now betting on cooperation. To build a self-driving fleet, Uber needs partners in the industry. Mr. Kalanick knows that developing and producing its own cars would overwhelm the company. But Mercedes can already boast of its first successes in the field: The new E-Class, for example, is the first normal car allowed to test its autonomous systems on Nevada’s streets.

However, the partners haven't revealed exactly how their new partnership will work. In its statement, Daimler remained vague: "The two companies will mutually benefit from their pioneering skills in autonomous driving and their platform operation know-how."

So far it is not even clear when the Mercedes vehicles will be available on Uber, or how many. It is also unclear who stands to reap the most benefit from the arrangement.

Data is at the heart of the answer. It is now considered the most important currency in mobility services. In the future, money won't be made on every car sold, but rather on every kilometer driven. Platforms like Uber want to turn the data stream into a business model. It’s a race that will have only one winner, according to experts.

To date, the German auto industry has fought to retain control over data produced by its vehicles. This was one of the reasons Daimler developed mobility services in-house, such as the MyTaxi platform.

But Mr. Kalachnik has already declared that he plans to secure victory in the battle for data, as he made clear to journalists during his visit to Berlin. The Robotaxi is central to his business model, he said at the time. Mobility can be safer and cheaper in a world without drivers, Mr. Kalachnik said.

Daimler isn't Uber's only partner. Last year the company announced a close cooperation with Volvo. The Swede’s first test vehicles for Uber are already on the streets of Pittsburgh. And Uber has established closer ties even with Toyota. "Uber wants to collaborate with as many automakers as possible," according to Arndt Ellinghorst, head of global automotive research at Evercore, an investment banking advisor.

 

Lukas Bay is an editor with Handelsblatt's companies and markets desk. To contact the author: [email protected]