Car2go is putting five cities in the rear-view mirror as the North American free-floating car-sharing market contracts rapidly.
SHARE NOW, car2go’s parent company, said Friday that the service will shut down in Portland, Denver, Chicago, Austin, and Calgary. The announcement comes just a few weeks after two car-sharing services pulled out of Seattle, raising questions about the long-term viability of the service. SHARE NOW says it is still committed to operating and growing in Seattle.
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“This decision was not made lightly,” SHARE NOW said in a statement. “We have had to face the hard reality that despite our efforts, we underestimated the investment and resources that are truly necessary to make our service successful in these complex transportation markets amid a quickly-changing mobility landscape.”
SHARE NOW says it will double down on car-sharing markets “that present the clearest path to free-floating carshare success.” Those cities include New York, Washington D.C., Montreal, Vancouver, and Seattle.
Seattle was a pioneer of free-floating car-sharing in the U.S., where three services once competed. That changed in recent months as two of the three pulled out of Seattle.
In July BMW’s ReachNow service abruptly shut down in Seattle and Portland, following a complicated set of mergers that brought it under the same umbrella as car2go. BMW and Daimler merged their various mobility businesses into a joint venture earlier this year, creating SHARE NOW and other subsidiaries. ReachNow became a casualty of that corporate reshuffling.
Last week, Lime announced it will wind down LimePod, the mobility company’s foray into car-sharing. Seattle was the only market where Lime piloted the service. The company’s core business is free-floating bike and scooters for rent.
The closures cast doubt on whether it is possible to sustain free-floating car-sharing services long-term. It’s a capital-intensive business that’s trickier to operate than other mobility services that have cropped up in recent years. But car-sharing has taken off in Europe, where it continues to grow. Car2go believes there’s still opportunity in the Seattle market.
“Free-floating carshare for car2go | SHARE NOW in Seattle is strong, and we are committed to the future of our service there,” said SHARE NOW spokesperson Kendell Kelton in an email. “As part of our new strategy, we will be focusing and intensifying our efforts in our remaining cities, including Seattle, as we hope to better understand what it will take to grow carshare overall in North America long into the future.”