BMW unveils car-sharing service: Are personal cars becoming obsolete?

BMW vs. Uber: The service, called ReachNow, is now rolling out in Seattle, offering users short-term, long-term, group rentals and other options.

Matthias Schrader/AP/File
The BMW logo is shown on a BMWi Vision Future Interaction concept car in Munich, Germany, Wednesday, March 16, 2016. The carmaker is rolling out a car-sharing service called ReachNow in Seattle on Friday.

In a bid to compete with the growing popularity of Uber and other ride-hailing services, BMW is launching its own car-sharing service in Seattle.

The service, called ReachNow, provides customers with the use of 370 BMW and Mini vehicles which they can use in a number of ways, including as a short-term rental, a delivery service, chauffeur service or a longer-term rental.

"Our customers rightly expect uncomplicated and fast solutions to their individual mobility needs, especially in metropolitan regions," BMW board member Peter Schwarzenbauer told Reuters.

Customers can unlock and start the cars using their smartphones, and the service even makes car sharing available to groups such as companies or apartment residents, Reuters reports.

ReachNow, which launched on Friday, is intended as a trial for expanding the service to other cities in the United States. It follows similar services launched by GM in Ann Arbor, Mich., and Car2Go, a car-sharing service launched three years ago in Seattle that offers customers the use of small two-door Smart cars.

The service cost includes a sign up fee of $39, then 49 cents a minute while driving. ReachNow will serve most of central Seattle, the Seattle Times reports.

Carmakers and ride-hailing firms have frequently held up car-sharing services as a solution to problems of urban congestion.

Some younger consumers – especially in large cities – have also touted the benefits of giving up their cars in favor of Uber or Lyft rides or other car-sharing services. More and more millennials have been obtaining a driver's license at later ages than older generations, too. 

But beyond some anecdotal evidence, it's still unclear if Americans around the country are fully committed to giving up their long-running love affair with owning a car.

In 2013, for example, one study found that the share of American families without a car had actually been declining since 1960, hitting an all time low of 8.7 percent in 2007. By 2011, that trend had reversed slightly, with 9.3 percent of families – or about 1 in 10 – lacking a car.

The market for car sharing services is expected to grow by 30 percent by 2020, consulting firm Roland Berger told Reuters. BMW is also banking on the success of its DriveNow service in Europe, which now has 450,000 users, Reuters reports.

The eventual introduction of self-driving cars could also have a larger impact on car ownership. By 2025, new car sales could drop by 40 percent, to around 9.5 million vehicles annually, according to one Barclays analyst

Last month, carmakers pushing for self-driving cars told Congress that car-sharing services could be a solution to getting now-pricey autonomous vehicles in the hands of low-income people for whom owning a car is currently out of reach.

So how might ReachNow reshape Seattle?

A Department of Transportation study showed that 14 percent of car-sharing service members in the city have given up their own vehicles, indicating that up to 9,100 fewer cars are on the road.

After seeing the success of Car2Go, the city sweetened the deal by reaching agreements with the service – and now with BMW – to provide parking permits so customers don't pay for parking in a legal spot.

To do this, the companies pay the city a set fee to park in the areas where the services are available. BMW eventually hopes to add other features, including a car service with certified drivers and a way for customers to rent out their own cars.

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