The competition in the ride-hailing market continues to intensify.

Daimler AG, the parent company of Mercedes-Benz AG, today inked a partnership with Via Transportation Inc. to launch a joint carpooling service in Europe. The alliance will center on Via’s mobile app, which enables users to catch a ride on a vehicle going their way and split the fare with other passengers.

As part of their collaboration, Daimler and Via intend to set up a joint venture in Amsterdam to orchestrate the European expansion. The business will be supported by a $50 million investment from Mercedes-Benz Vans. Moreover, multiple reports suggest that Daimler is leading a $200 million funding round into Via to put it in a better position to support the initiative.

The first destination on the expansion roadmap is London, where the companies plan to launch their joint carpooling service by the end of the year. Paris and other key European cities will follow suit.

According to Bloomberg, the joint venture will operate Mercedes-Benz Vito and V-Class vans specifically customized for ride-hailing purposes. Among the planned modifications is direct integration with the so-called On-Demand Shuttle Operating System that Via uses to plan out routes. It’s part of a broader technical initiative in which the companies also will license the software to cities for transportation planning purposes.

The partnership should provide a big boost for Via, which currently only operates in New York, Washington D.C. and Chicago. As for Daimler, it stands to gain another ally in a market that is poised to become instrumental to the company in the long run. The German auto giant is already collaborating with Uber Technologies Inc. to put self-driving Mercedes models at the disposal of its users.

With autonomous vehicles set to make ride-hailing even more convenient than it is now, the incentive for people to own cars could diminish. That in turn may see Daimler become increasingly reliant on partnerships with the likes of Uber and Via.

Establishing the necessary alliances early on could give Daimler a valuable head-start. Besides opening up business channels, they also create an opportunity for the company develop and test ways of adapting its vehicles to the ride-hailing era.

Other car makers are forging similar alliances. Earlier this year, General Motors Co. teamed up with Lyft Inc. on a project aimed at putting thousands of self-driving electric cars on the road. More recently,  Toyota Motor Corp. joined a funding round into Asian Uber rival Grab that is expected to net about $2.5 billion upon closing.

Image: Mercedes-Benz Vans