Detroit, Michigan – Global automotive supplier Bosch is entering the ridesharing business by buying Detroit startup Splitting Fares Inc., a company launched from Ford’s Techstars Mobility incubator and tested by Canadian automotive supplier Magna International.
SPLT’s platform is effectively a high-tech version of the old-fashioned carpool (you could almost see Dagwood Bumstead running after a car with an iPhone). The company’s app identifies people with similar commutes or people who are along routes to companies, universities, and municipal authorities.
An algorithm finds the best composition for the ride-share and computes the fastest route. The aim is to reduce congestion and make the daily commute more relaxed.
SPLT was founded in 2015. Some 140,000 users in the United States, Mexico, and Germany. The purchase price will not be disclosed.
“With SPLT, we are extending our portfolio in the growth area of mobility services,” says Dr. Markus Heyn, member of the Bosch board of management. With connected mobility services, Bosch aims for growth well into double digits.
“With this sustainable and affordable mobility service, we want to fundamentally change the way people get from A to B,” says Anya Babbitt, co-founder and CEO of SPLT.
Ridesharing, in which digital services and apps form carpools and organize vehicle sharing and taxis, is a growth market in the connected mobility sector. By 2020, the number of people worldwide using rideshares is expected to rise 60% to 685 million (source: Statista).
Up to now, the services available have usually directly targeted people who happen to be traveling in the same direction, and who want to book a ride on the spur of the moment. They have not focused so much on companies and commuters.
According to the German Federal Motor Transport Authority, there are more than 45 million cars on Germany’s roads alone. And the number of commuters is rising: according to the German Federal Institute for Research on Building, Urban Affairs, and Spatial Development, three out of five workers do not work in their home cities. And for roughly two-thirds of the working population, the car is the first choice of transport for the daily commute, according to the German Federal Statistical Office.
Worldwide, the result is the same: rush-hour traffic is frequently gridlocked. Millions of commuters find themselves stuck in traffic every day. A further problem is that drivers usually sit alone in their cars. Carpooling is still the exception.
Because rides are shared by colleagues, users never have to get in the car with complete strangers. Such rideshares encourage communication and offer a chance to network. Company buses can also be integrated into the app, and in this way be used more flexibly and efficiently.
Bosch associates in Mexico are already using the app, and it is planned to extend its use to the entire company.
“We believe we have a good chance of global growth together with Bosch,” Babbitt says. SPLT will remain an independent entity within the Bosch Group and be run as a wholly owned subsidiary.