European cities lose Share Now service as Daimler and BMW regroup
19 December 2019
19 December 2019
Daimler and BMW are to pull the Share Now mobility service out of three European locations while also withdrawing completely from the US.
Services will cease in London, Brussels and Florence from the end of February next year, with the pull-out from the US completed at the same time. The carmakers blame low adoption rates for the reduction in its European operations.
The two manufacturers pooled their car2go and DriveNow businesses together in February this year, and earlier this week announced they are looking to grow profits by reorganising the combined mobility services under three pillars.
′Despite our best efforts and investments in Brussels, London and Florence over the years, we are unable to continue operations in a manner that is sustainable for our business due to low adoption rates,’ the carmakers said. ′Moving forward, Share Now will focus on the remaining 18 European cities. We, along with our shareholders, believe these markets show the clearest potential for profitable growth and mobility innovation.’
The service allowed consumers to rent vehicles by the minute and park them on city streets or at parking meters without charge. The service faced tough competition from ride-hailing firms such as Uber, Lyft, and electric scooters.
Despite boasting of up to 90 million users across the world, the two carmakers have failed to make its new mobility venture profitable. In the face of challenges surrounding electric-vehicle development, which has seen Daimler slash a number of jobs to increase investment, decisions needed to be taken to ensure the services could continue without losing the partners money.
′Daimler and BMW, with their respective car-sharing offers that have now merged into Share Now, have many years of experience in optimising the free-floating car-sharing concept,’ says Christof Engelskirchen, chief economist at Autovista Group. ′The economic challenges are well understood, the biggest ones being high-needed utilisation rates, costs for logistics and cleaning. It is also noteworthy that taking an e-Scooter for 10 minutes costs you €3.00. For Car Sharing, you do not pay much more.’
′Megacities like London that are densely populated have a superior public-transport system and a lack of public-parking spaces, cannot be attractive for a free-floating car-sharing business case. I believe that Share Now will focus on finding cities that are less densely populated and have less advanced public-transport systems. I am also curious to see whether they will extend their business model into stationary car sharing.’
Other manufacturers have also struggled to get similar projects off the ground. Earlier this year, GM pulled its Maven car-sharing service out several cities, while Ford closed its van-hailing app Chariot, and sold its car subscription business to Fair.