Uber linked with takeover bid for Free Now taxi service

Uber is understood to be interested in buying Free Now. However,  a deal could be complicated by market conditions.

Uber has been linked with a takeover of taxi-hailing app Free Now, which has a nationwide presence in Ireland.

Free Now, which was previously called Hailo and then My Taxi, is owned as a joint venture by German car giants BMW and Mercedes-Benz owner Daimler.

It operates in around 100 European cities and is the leading taxi hire service in Ireland, operating in Dublin, Cork, Galway, Limerick, and Waterford.

Uber Technologies — which runs its own taxi-hailing service as well as electric bike rentals, food delivery, and courier service — is reportedly considering purchasing Free Now as a means of boosting its market share in Europe and Latin America.

Uber is understood to have expressed interest in a potential acquisition of Free Now after the venture’s efforts to attract additional investors struggled to gain traction amid the coronavirus pandemic.

However, any deal could be complicated by the challenging market ride-hailing companies face, which could make it more difficult to agree on a price.

Daimler and BMW merged their mobility operations last year and folded them into a joint venture called Your Now, which comprises five businesses including the Free Now ride-hailing service.

Free Now has integrated ride-hailing apps including France’s Kapten, Greece’s Beat, and Romania’s Clever Taxi. Daimler valued the equity investment in its half of the Your Now venture at €618m at the end of June. Its activities also include much smaller operations dubbed Park Now and the car-sharing platform Share Now.

Generating cash

Daimler and BMW’s shopping of Free Now reflects their focus on generating cash and improving efficiency within their core car-making operations. Car makers have been scaling back their mobility service ambitions, with General Motors shutting down its Maven car-sharing business earlier this year and Ford ceasing its Chariot shuttle service in 2019.

“If external investors aren’t willing to provide capital, why should Daimler/BMW put more money in?” said Bernstein analysts Arndt Ellinghorst and Thanos Hadjiantonis in a note. 

The traditional industry has begun to realise it’s been wasting a lot of time, effort and money by trying to compete in these areas with questionable medium and long-term returns.

There is no certainty the deliberations will lead to a transaction, and other bidders could emerge.

Uber has been looking to shed minority holdings in several ride-hailing operations recently, including portions of its stakes in China’s Didi Chuxing and the south-east Asian ride-share company Grab. It has also agreed to sell its European freight business and some of its stock in Russia’s Yandex.

While San Francisco-based Uber has cut back its once-sprawling global ambitions, it is still in more than 10,000 cities across roughly 70 countries.