BMW tries to succeed where Daimler failed with London car-share scheme

LONDON (Reuters) - BMW launched its car-sharing service in London on Thursday, barely six months after fellow German carmaker Daimler said it was shutting its equivalent initiative in Britain.

Already in the United States, Austria and Germany, the DriveNow service operates in partnership with rental firm Sixt and allows users who pay a one-off registration fee to locate and open their nearest car by card or via a mobile phone app.

The scheme will start in three boroughs in North London and compete with Avis's Zipcar and Hertz's 24/7, with customers able to return vehicles anywhere within the zone.

In May Daimler axed its Car2Go operation from Britain, citing the country's strong culture and tradition of private vehicle ownership, though it continues to operate in cities around the world including Berlin and Rome.

Peter Schwarzenbauer, BMW board member with responsibility for mobility services, told Reuters that the company had learnt lessons in how to bring the scheme to London. The business has more than 360,000 customers worldwide.

"What we think we have to do differently is start on a smaller scale (and) prove the concept that this is something successful," he said. "If you have proven it, then you can step by step ... grow this organically."

Daimler found it difficult to coordinate its network of "free-floating" parking spaces across non-adjoining London authorities. BMW's DriveNow will operate initially from only one zone in the north of the city. [ID:nL6N0OE4X4]

Car rental firms and automakers are increasingly trying to tap in to the demand for flexible, short-term car use, particularly from younger people for whom car ownership is seen as less essential than it was in previous generations.

In March French billionaire Vincent Bollore said he would bring 3,000 electric cars to London's streets by 2016 as part of a car-share project that will emulate the city's bike hire scheme. [ID:nL6N0M9365]

The BMW-Sixt scheme will begin operating with BMW 1 series cars as well as vehicles from the group's Mini range.

(Reporting By Costas Pitas; Editing by David Goodman)