Daimler, the parent company of German Carmaker Mercedes Benz is partnering with Geely, a Chinese carmaker to start cab services in China by 2019.
Both the companies on Wednesday signed an agreement for the new venture in Stuttgart, Germany.
The software for the venture will be jointly developed by both the companies. The base will be located in Hangzhou, where Geely’s headquarters is sited. The operations will be started with Mercedes-Benz models like S, E and V- class. And later on, Geely’s high-end electric cars may be also added to the list.
The deal is the first prominent business tie-up between Daimler and Geely. Earlier this year, Geely acquired a stake of 10 percent in Daimler.
Geely runs a cab service called CaoCao. CaoCao utilizes the company’s electric cars and operates majorly in smaller towns across China.
Till now, Daimler has been involved into few partnerships with some companies like BMW and Uber for stepping into the ride-hailing business.
The new ride-hailing service will enter into a very competitive field in China. Mainly, the new cab services will have to face the dominant Didi Chuxing, China’s existing ride-hailing services.
It will be interesting to see how the new venture will attract customers with their services.
“The development of such services, in which both companies already have a presence, forms part of our transformation from a vehicle manufacturer into a global automotive technology group,” said An Conghui, President of Geely.