FRANKFURT -- Volkswagen Group's mobility business, Moia, is scheduled to begin public ride-sharing services with electric passenger vans in Hamburg in April, as automakers step up their investments in potentially lucrative, non-traditional transportation services.
Germany's second largest metropolis after Berlin will serve as a test to see whether the business model functions properly and can be scaled up to expand to other cities.
"Ridesharing services close the gap between taxis and public transit. Individual trips will be reduced and relieve urban traffic overall," said Michael Westhagemann, Hamburg's senator for economics, transport and innovation, in a statement.
VW has been operating trial runs of the service in Hamburg since last month. Public operation is planned to begin in April with 100 vehicles before ramping up to 500 in the following 12 months.
VW passenger vans with capacity for up to six passengers are being used for the service. The battery-powered vehicles have a 300 km (186 mile) range and were developed and built in 10 months by VW's Commercial Vehicles and Osnabrueck units.
Customers can book a ride by entering their starting point and destination in a smartphone app. An algorithm maps out how best to combine the customer's desired journey with those of other users. Driving times and arrivals are calculated for each passenger.
Moia also has been testing its ride-sharing service in Hanover since last summer. In contrast to Hamburg, the Hanover operation uses Transporter minivans equipped with combustion engines.
VW's Moia fleets will initially operate with drivers but the vans could eventually cruise cities as self-driving shuttles.
Sales of autonomous shuttles will reach about 1 million vehicles in 2020 and could more than double to 2.5 million by 2025, Roland Berger estimates.
Other automakers are making plans to enter the market.
Former Renault CEO Carlos Ghosn promised to start a robotaxi service by 2022 when the automaker unveiled its EZ-GO concept at the Geneva auto show last March.
Daimler has developed the Vision Urbanetic concept for an autonomous ride-sharing vehicle that can accommodate up to 12 passengers.
The economics remain uncertain, however. Ford has said its Chariot service, which ferries passengers in Transit vans in U.S. cities and London in the UK, will close by the end of March.
Daimler's Car2Go and BMW's DriveNow are merging their short-term car rental businesses in an effort to build scale and fend off competition from digital and technology companies such as Uber and Didi.