VW Challenges Uber In Ride-Hailing Marketplace

As part of its effort recover from the devastating Dieselgate emissions scandal, Volkswagen has embarked on a new ride-sharing program and will compete with Uber.

Uber’s market is becoming narrower all the time. This week, for example, the ride-sharing service gained two new competitors, Volkswagen and BMW. According to Automotive News, VW is shifting its focus beyond selling cars. The new business division is aimed at customers who would rather ride than own or lease a vehicle.

Beginning next year, VW will offer on-demand shuttle services through its new division, MOIA. MOIA is VW’s direct entry to the into digital mobility services, its first foray into the mobility world was through an investment into Gett. Gett is a Europe-based ride-hailing service.

”Meet Needs of Urban Citizens”

“Mid- and long-term MOIA will create the kinds of services that will meet the needs of urban citizens,” Ole Harms, head of the MOIA said.

VW’s direct entrance into the digital mobility world is part of its long-term attempt to work through its self-inflicted diesel emissions scandal. The automaker is pinning high hopes on services like MOIA. The automaker believes it will earn a great deal of its revenue from its new services by 2025. The automaker is in the throes of revamping its core brand – VW – as it also makes significant investments in ride-sharing services and self-driving cars. And, then there’s the automaker’s pledge to introduce 30 electric vehicles by 2025.

The business potential of the new services is enormous. A.T. Kearney, an automotive industry consultant, expects the global market for autonomous vehicles and related activities could swell to $282 billion by 2030, a 450 percent increase over the projected $51 billion market in 2020.

VW is making up for lost time with its new effort. For some years, Volkswagen has concentrated on vehicles while its competitors – Daimler and BMW -- have broadened their visions to include car-sharing operations. VW has also been slow to adopt electric vehicles, however, that effort has been spurred ahead by the Dieselgate emissions scandal.