BMW launches ReachNow car-sharing scheme in US
BMW is launching the ReachNow pilot car-sharing scheme in Seattle, United States, including chauffeur services and rental services, using an initial fleet of 370 BMW i3, 3-Series, and MINI Cooper vehicles.
IHS Automotive Perspective
- Significance: BMW has announced the new ReachNow car-as-a-service programme, as well as the location of the programme's North American headquarters. The pilot scheme launches immediately in Seattle, Washington, United States, with plans to expand into three more cities in 2016 and up to 10 in North America later.
- Implications: This is BMW's next step in working to resolve and explore the potential of incorporating car-as-a-service or mobility-as-a-service into the automaker's company strategy.
- Outlook: The ReachNow pilot scheme gives BMW the opportunity to learn and evolve the programme into a profitable business model on a small scale, as well as position BMW through ReachNow as a premium provider of mobility with wide solutions aimed at easing intercity mobility, and thereby working to avoid BMW car-as-service from being seen as an inexpensive commodity.
BMW is launching the new ReachNow car-sharing service in Seattle, Washington, United States. The programme is a pilot, with BMW announcing its intention to launch in three other, as yet unnamed, US cities in 2016, followed by 10 North American cities later. The ReachNow programme's North American headquarters will be located in Seattle as well. According to a BMW statement, the program is "designed to provide drivers with an experience that is as convenient as owning a car". The premium service will feature fast registration and approval (two minutes or less), with a USD39 one-time lifetime registration fee. Charges are USD0.49 per mile while the car is being driven and USD0.30 cents while parked. The prices include insurance, fuel and parking at public meters on the street within a designated area, plus taxes and fees. Prices are also automatically capped at three tiers: USD50 for up to three hours, USD80 for up to 12 hours, and USD110 for up to 24 hours. BMW is launching the service with 370 BMW and MINI vehicles being available. Initially, the fleet includes the BMW i3, BMW 3-Series, and MINI Cooper.
Peter Schwarzenbauer, member of the board of management of BMW AG, said in the statement, "We are currently witnessing an extremely exciting period in the development of the automotive industry. Our customers rightly expect uncomplicated and fast solutions to their individual mobility needs, especially in metropolitan regions This is why we are supplementing our classic business model with additional services that make life on the road easier for people in big cities… with the establishment of the ReachNow brand, we are able to offer our customers in Seattle 'on-demand mobility' − mobility when it's needed, from one single source. With this service, we are building up on Drive Now, our extremely successful European business model, and bringing it up to a new level in the US. Seattle is an innovative, internationally-oriented city, which makes it the perfect location to launch these services."
Users of the ReachNow service will be able to locate and book the closest available car through the ReachNow app, as well as find a ReachNow car on the street. The cars can be returned to any legal parking space on the street, including for free at certain meters. Using the app will enable ReachNow users to access and start the vehicle.
Services that BMW will offer through ReachNow will include delivery for car-sharing vehicles (members can request a specific vehicle to be delivered at the desired time and to the desired location); car-sharing for longer rentals, with time extensions handled through the app; car-sharing for residential and corporate groups (exclusive onsite access to a vehicle fleet for employees or residential complexes that can remain onsite); renting an owner's vehicle to others with a peer-to-peer-style booking platform in the ReachNow app (applicable only to MINI owners); and a chauffeur service involving the booking of a car with a driver. Additionally, in the second quarter of 2016, ReachNow vehicles will be available at Seattle-Tacoma International Airport.
BMW also invested in a mobility software platform company in early April called RideCell. In the ReachNow statement, BMW said that RideCell is the technology partner for the mobility software platform ReachNow will use. The software company has developed mobility-as-a-service software, which "enables ReachNow to launch and rapidly scale new mobility services, optimizing for demand, supply and pricing". BMW has not announced the amount of its investment in RideCell.
Outlook and implications
The ReachNow pilot programme gives BMW the opportunity to learn and evolve the service into a profitable business model on a small scale, as well as to position BMW through ReachNow as a premium provider of mobility with wide solutions aimed at easing intercity mobility, and thereby working to avoid BMW car-as-service from being seen as an inexpensive commodity. BMW has been working in the ride-sharing space for several years, with the ReachNow service the latest phase.
There is potential for some vehicle ownership to be replaced by a mix of ride-hailing, car sharing, and chauffeured services, and there is a question of how automakers might differentiate their products in the space and not be perceived as commodity suppliers. BMW, Ford, General Motors (GM), and Mercedes-Benz have been among the most proactive in evaluating and defining what their future business models might look like, with each taking different approaches. Certainly, BMW will leverage knowledge gained from the Drive Now programme in San Francisco, California, US, which ended in September 2015. Among the reasons the San Francisco programme was ended was BMW's inability to secure "super-permits" for parking in legal places throughout the city, without usual time limits; BMW was able to secure this for the Seattle programme.
The ReachNow announcement follows recent BMW announcements regarding its long-term strategy, which includes evolving its range of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) into a new nameplate, iNEXT, and a wider range of vehicles. BMW is also working on automated and full networked driving technologies, including integrating high-definition digital maps, sensor technology, cloud technology, and artificial intelligence. The company is also moving forward with technology related to traditional ownership, announcing a partnership with Microsoft to use its Azure cloud-computing power to create BMW Connected North America, as well as launching the service in Germany.
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