Can Volkswagen's new transport-sharing start-up take the fight to Uber?

MOIA will use shuttles to plug the holes in public transport systems.

by Jack Torrance
Last Updated: 07 Dec 2016

Volkswagen is in need of some good press. The car manufacturer, which owns several large brands including Porsche, Audi and Seat, remains bogged down in the aftermath of its devastating emissions scandal. The cheating came to light back in September 2015 but the headlines keep on coming - just last month it emerged that German prosecutors have expanded their investigation to the company’s chairman, Hans Dieter Poetsch. A couple of weeks later it announced plans to cut 30,000 jobs.

So it’s not especially surprising to see the company on the PR offensive. Today it announced the launch of a new start-up, MOIA, which will invest and experiment in the field of ‘mobility services’, with a budget in the hundreds of millions of euros. It follows VW’s $300m (£235m) investment in the taxi app Gett earlier in the year.

It reflects an angst among car manufacturers about what the future holds. The big players have arguably stolen a march on the likes of Google in the field of self-driving cars (something the search giant has been working on for several years). But an even bigger challenge is the change in consumer attitudes towards transport. Car ownership is less attractive for today’s cash-strapped, pay-as-you-go younger generations, and the likes of Uber are determined to make public transport ‘as reliable as running water.’ That threatens to deprive car makers of a lucrative slice of tomorrow’s transportation market.

They’re not taking it lying down though. Toyota has invested in Uber, GM ploughed $500m into Lyft and with today’s announcement VW is stamping its foot firmly on the ride-sharing accelerator. MOIA CEO Ole Harms explained the company’s rationale at TechCrunch’s Disrupt conference in London this morning. Despite technological advances we are still moving around cities by and large in the same way we did 20 years ago, causing congestion, he said. ‘The solution cannot be to simply add more cars to the streets - we need to provide access to new forms of transportation.’

So what is the solution? Well for now Moia is a little lacking on the specifics. One of its plans is to use shuttle buses ‘with powerful algorithms and competent staff’ to plug the holes in city transport networks. Meanwhile its ‘MOIA Next’ division will look into the trends that will change transport further in the future. There are amazing concepts out there that just need developing.

‘We will invest in emerging technologies and create them ourselves – anything with the potential to make mobility more convenient, more affordable and more sustainable for all of us,’ its website says.

What this means in general terms is a move towards making more revenues from services, rather than the pure manufacturing of the Group’s carmaking core business. MOIA will operate as an independent company, presumably partly in the hope of escaping VW’s reputational shadow. ‘The whole setup of our new company as an independent company, an approach that is different to a car manufacturers’ approach,’ Harms said. He also emphasised that the start-up will work collaboratively with cities and existing public transport systems – an apparent shot across the bows of Uber, whose reputation for stretching the rules and enraging rulemakers has arguably held back its growth in parts of Europe.

While MOIA will clearly be a competitor to Uber, don’t rule out collaboration or consolidation in the future. Pressed on whether VW would be looking to invest in the Silicon Valley firm, Harms wisely kept his mouth shut. ‘The mobility market is still in very early stages, now is the right time to find the right partners and then we will find out what the future will bring.’

That future could be very turbulent indeed. This weekend it emerged that Apple is, as everyone expected, working on automotive technology (whether that means it plans to launch its own branded car remains to be seen). This morning BWM's strategy head admitted its new techie rivals are 'very dangerous players' in the market. Expect more big news on this topic in the months and years to come.

Image source: Let's go out Bournemouth/Flickr

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