Volkswagen’s Uber fighter

Volkswagen is going electric, going autonomous and going after startup success stories like Uber and Lyft.

The German car-making giant yesterday announced its new ride-sharing brand, Moia, specifically to become one of the world’s top three mobility service providers within 10 years.

As the 13th brand of the Volkswagen Group, Moia is tasked with helping the company recover from the Dieselgate scandal by developing its own battery-electric, autonomous passenger car and providing ride-hailing services.

The brand will leverage Volkswagen’s May 2016 investment in ride-hailing app Gett and will also be the vehicle for the Group to make other investments and alliances in tech and digital mobility services.

Like BMW’s weekend move to rebrand itself as a tech company that happens to make cars, the Volkswagen announcement is effectively a way to cover in case start-ps like Uber and Lyft begin to threaten its core business or cash flow.

Moia has already soaked up more than €100 million of the Volkswagen Group’s cash, with its CEO, Ole Harms, admitting it was in the “three figures” of millions.

Harms claimed the goal for Moia (it derives from the Sanskrit word “Maya”, which means magic) was to look for and implement ways for the Volkswagen Group to change the way people moved in cities.

"We are still moving around our cities like we did 20 or 30 years ago," Harms said. "We need to offer new forms of transportation and really improve the traffic situation."

It will start with an agile shuttle service that is aimed to work somewhere between the level of Uber’s ride-hailing service and a scheduled bus route, and which can be hailed by using a smartphone app. It is planned to make Moia rides roughly the same price as typical city bus fares by sharing rides with multiple users.

The brand is based in Berlin with just 50 employees, though that figure will rise to 200 by the end of 2017. Volkswagen is also open to minority-shareholding investments from outside funds.

Harms is aiming for billions of euros in revenues from the new brand within four years and has plans to move on other markets in Europe, the US and China.

While it will initially use existing Volkswagen models like the Transporter and Caravelle, it will eventually move to six-, seven- and eight-seat specifically designed autonomous battery-electric vehicles.

To be built off the Volkswagen Group’s MEB battery-electric vehicle architecture, the first Moia car is being developed by Volkswagen’s commercial vehicle division and could be shown as early as next year’s LA motor show in November, sharing visual queues with the Budd-E concept.

It will also usher in an era of driverless cars to Volkswagen as its autonomous-driving technology approaches Level 5 early in the next decade and prototypes could be on the road by 2019.

“By 2021 we definitely see a couple of cities worldwide operating autonomous fleets,” Harms said.

He said the window to sustainability for a manufacturer-backed ride-sharing service was that, sooner or later, companies like Uber would have to invest in their own fleets instead of relying on contracted drivers and cars.

“Tech companies need to operate as a fleet. Now they are asset light, but they will become asset heavy,” he said.