Volkswagen Doubles Down on Ride Sharing, Expects Big Revenue by 2025

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Volkswagen already is one of the largest vehicle manufacturers in the world. In the future, it might become one of the world’s largest ride providers, too.

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Like many other automotive companies, Volkswagen is moving beyond its traditional role of merely building cars and morphing into a business centered on mobility. The company said this week that it is launching a new subsidiary called Moia that is intended to hatch innovations based around ride-hailing apps. The name Moia comes from the Sanskrit word for “magic.”

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Volkswagen is no stranger to ride hailing. In May, it invested $300 million in Gett, a global competitor of Uber and Lyft with a strong presence in Europe. It’s unclear exactly what role Gett will play with Moia, but Volkswagen sees the combination of the two as a means of entrenching its position on its home continent and elsewhere.

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“We want to demonstrate that innovative mobility solutions are possible outside of Silicon Valley.”
-—Ole Harms, Moia
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“Our sights are set on becoming one of the global top players for mobility services in the medium term,” said Moia CEO Ole Harms.

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Beyond ride hailing, Moia will develop an app for what VW calls “connected commuting,” offering customers ways to plan journeys across different modes of transportation on a one-stop platform, a plan similar in concept to Moovel, a Daimler subsidiary that offers integrated bookings and payments.

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Moia also will focus on on-demand pooling, in which customers summon vehicles and share rides with others headed in the same direction on small shuttles, a plan similar to the on-demand shuttles tested by Ford’s recently launched Smart Mobility subsidiary. Another similarity to Ford’s approach: Volkswagen says it will both market these services directly to customers and explore partnerships with cities.

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“The objective is holistic transportation solutions that make individual transport and public transport more effective,” Harms said, “thus avoiding unnecessary journeys and optimizing use of the existing road infrastructure.”

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Based in Berlin, Moia will launch with 50 employees at the outset and grow throughout 2017. The company intends to launch a pilot project testing connected commuting next year. Volkswagen says it expects to “generate a substantial share of its sales revenue from this new business by 2025,” although it does not elaborate on more specific revenue targets.

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• Volkswagen Invests $300 Million In Gett
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• GM Invests $500 Million in Lyft for Self-Driving-Taxi Network
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• New Ford Mobility Subsidiary Looks to the Future
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Volkswagen’s announcement comes on the heels of one from another German automaker. BMW’s iVentures, the company’s venture-capital arm, soon will raise $530 million for mobility-related projects and relocate to Silicon Valley, according to Forbes. That is one move Moia won’t make. Volkswagen appears eager to demonstrate that the California hub does not have a monopoly on such technology.

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“With Moia,” Harms said, “we want to demonstrate that innovative mobility solutions are possible outside of Silicon Valley.”

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