FRANKFURT (Reuters) - Germany’s BMW launched on Friday a car-sharing service in Seattle, where it will offer customers the use of 370 BMW and Mini vehicles, before expanding to other cities in the United States.
Established carmakers worldwide are looking for ways to stay relevant for a generation of drivers that increasingly prefer the convenience of using car-sharing and ride-service companies offered by a string of new technology rivals such as Uber Zipcar and IGO.
“Our customers rightly expect uncomplicated and fast solutions to their individual mobility needs, especially in metropolitan regions,” Peter Schwarzenbauer, BMW’s board member responsible for mobility services, said.
The service, called ReachNow, will offer several options, including short-term rental, delivery service, chauffeur service or longer-term rental. Car sharing can also be made available to closed groups such as companies or entire residential complexes, BMW said.
Users will be able to unlock and use the cars using their smartphones.
Consultants Roland Berger say the market for car sharing will grow by 30 percent a year and generate revenue of between 3.7 billion euros and 5.6 billion euros ($4.2 billion to $6.3 billion) by 2020.
In Europe, BMW launched its DriveNow service in 2011, rolling it out in major German cities, Vienna and parts of London with a model that allows users to make one-way journeys without having to return the car to the point of departure.
The scheme now has more than 450,000 users and makes a profit. It has gained popularity because it allows clients to use cars without having to worry about fuel costs, insurance, repairs, vehicle tax and — most importantly — where to park.
About 38 percent of clients who tried DriveNow — mainly those living in cities and who only used their cars at weekends — sold their own vehicles, BMW said, illustrating the dilemma facing the industry.
ReachNow is also offering customers the option of renting out their private vehicles to the ReachNow fleet for limited periods, such as when the owner is on holiday.
Rival carmakers are making similar moves. Toyota has a scheme renting cars from dealerships, Ford launched Ford2Go car-sharing in Germany, while General Motors’ Opel arm has its CarUnity scheme.
Reporting by Edward Taylor; editing by Susan Thomas