Old Meets New: Daimler and Uber Announce Cooperation

If an over one-hundred-year-old company cooperates with an eight-year-old startup, then it’s clear who’s in charge, right? In fact, we have here two partners which are on the same level, and it’s unclear who needs whom more. At least looking at the market capitalization and evaluation of the companies, there is barely a difference. Daimler has a market cap of 75 billion Euro, and Uber an evaluation of 65 billion.

Does Uber need Daimler to get cars on the street and develop self-driving technology? If you look closer, not necessarily. There are hundreds of thousands driver working for Uber and bringing with them their own cars. In addition Uber has already cooperations with Ford and Volvo, two car makers working on self-driving car technology and whose cares are being tested in Pittsburgh and San Francisco.

Or does Daimler need Uber, to access their network of drivers and passengers in field test and the data to test it’s autonomous Mercedes? Mercedes began developing self-driving car technology  in the mid nineteen-eighties, but accelerated their development only, when Google announced how much they have been working in secrecy. Despite all their effort Daimler is now behind. Even if Daimler’s cars are being tested in Nevada, or an autonomous test truck drives on a German highway, and Mercedes even received a test license from Stuttgart, Google, Uber, Tesla and Co are the technology leaders.

Fact is that Uber and Daimler as recently as last year referred to each other as frenemies, but now announced a partnership. Uber will get access to the best cars, and Daimler access to Uber’s platform. With this cooperation cities and roads shall become safer, cleaner and more accessible, as written in the press release.

Both can benefit from each other, assuming that the corporate cultures are compatible. Both are not lacking of confidence, which already created troubles back then when Daimler and Chrysler merged. And Uber caught attention with some troublesome ethical behavior.

Similar partnerships of old and new were introduced by other companies. Google partners with Fiat-Chrysler, Volkswagen bought shares of Uber-competitor Gett, General Motors acquired Cruise Automation, or Apple invested in Didi Chuxin. Experience in car manufacturing meets the speed and experience of the digital sector. Which companies will survive is difficult to predict. Everything is possible.

If you take lessons from history, which Harvard professor Clayton Christensen has dissected for us, then 50 to 80 percent of incumbents from one generation are disappearing through disruption in the next generation. Which means that at least half of today’s automakers won’t make it into the next generation. Daimler is trying to prevent that with the help of Uber. And with this partnership the survival chances are rising.

This article is also available in German.

1 Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s