Daimler (DDAIF) , the parent company of Mercedes-Benz, doesn't plan on lagging in the autonomous-driving race.
While companies like Alphabet (GOOGL) - Get Report (GOOG) - Get Report have Waymo, and General Motors (GM) - Get Report owns a bulk of Cruise -- even after investments by Honda (HMC) - Get Report and SoftBank (SFTBY) -- Daimler has an autonomous driving service in the works.
Over the summer, Daimler and Bosch announced they would use Nvidia's (NVDA) - Get Report DRIVE Pegasus platform to power its Mobility-as-a-Service (MaaS) offering. They hope to begin testing the service in 2019, with a rollout in the early part of next decade.
I was able to speak with Nvidia's senior director of automotive Danny Shapiro following the announcement. With Nvidia powering Daimler's MaaS initiative, it would be reasonable to speculate that Daimler could use Nvidia to power its autonomous driving features for its consumer vehicles in the future.
Of course, Shapiro could not confirm whether that's the case, but he did say it would be a reasonable possibility down the road.
We do not know that Nvidia is behind Mercedes' latest announcement, that its flagship S-Class will likely support level 3 autonomous driving when the new model debuts in 2020. But it's a real possibility that that will be the case, given Nvidia's work on Daimler's MaaS initiative, as well as being a major component behind the new Mercedes Benz User Experience (MBUX) A.I. infotainment system.
"We are on the verge of jumping to Level 3, which is our target for the next S class," said Ola Kaellenius, Daimler's head of research.
Daimler vs. Uber
Not only is Daimler looking to take a lead in autonomous driving with its MaaS plans and S-Class, but it's taking it to ride-hailing companies as well.
At a time when Uber is gearing up for a massive IPO potentially in excess of $100 billion, the leading ride-hailing application in the U.S. is burning through plenty of cash. After accepting a $7.5 billion investment last December, the company has continued to raise cash in 2018. It recently took a $500 million injection from Toyota (TM) - Get Report and just raised another $2 billion in bond sales this month.
In February 2017, Daimler acquired Taxibeat -- rebranded simply as Beat -- for $43 million. However, the automaker has let the company forge its own path (much like GM with Cruise) and now it's becoming a serious force in Latin America.
Moving without announcement, the ride-hailing company will simply pop up in new cities. Beat's goal is to be a dominant industry player in every major Latin American city in the next three years. If it can get there, Beat may have a seriously good blueprint for taking over other markets.
Combined with Daimler's MaaS ambitions, which it plans to initially launch around Silicon Valley, the company could become a force to be reckoned with in this new industry.
That's against key players like Uber now, but also Waymo, Cruise and others rolling out new services and offerings. If Beat's playbook transitions to other key markets, perhaps in Europe, Asia or North America, companies like Uber could have an issue.
Will Mercedes completely dominate the roads of the future? I don't know about dominate. It will have to share the road with other key players -- Tesla (TSLA) - Get Report included -- but it will likely be a big part of the future for transportation.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.