Car2Go the latest short-term car rental service to pull out of major U.S. cities
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September 27, 2019 04:29 PM

Car2Go the latest short-term car rental service to pull out of major U.S. cities

Alexa St. John
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    Car2Go, the short-term rental service rebranded as Share Now, is pulling its vehicles from five major North American cities by year end.

    The move follows a trend of auto companies re-evaluating their mobility services, especially in markets across North America.

    Car2Go/Share Now –- part of a joint venture between Mercedes-Benz and BMW formed in February with $1.1 billion in investments –- said Friday it no longer will have a presence in Austin, Texas; Calgary, Alberta; Portland, Ore.; and Denver beginning Oct. 31 and Chicago starting Dec. 31.

    "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," the company said in a statement.

    Car2Go launched in North America in 2009 as a short-term vehicle rental alternative to private car ownership. Car2Go provides customers with an hourly car rental using an app.

    The company said it will refocus its efforts on "cities that present the clearest path to free-floating carshare success." Those cities are New York, Washington, Montreal, Vancouver and Seattle.

    Car2Go recently had problems with an apparent heist of at least 100 Mercedes-Benz vehicles that were part of its fleet in Chicago. The company offered customers choices among Mercedes-Benz GLA crossovers, Mercedes-Benz CLA cars and Smart ForTwo microcars in the city.

    Twenty-one people faced misdemeanor criminal trespass to vehicle charges, with one facing an additional felony charge for financial identity theft. The Chicago Police Department said that although all the company's vehicles had been accounted for, some may have been rented by "fraudulent means" via the brand's mobile app.

    Car2Go said it would provide no further statements after the announcement Friday.

    Automakers and new providers have saturated the market with alternative vehicle ownership models such as short-term rental and subscription programs over the last few years. While many offered a variety of subscription formats, some claimed the services reached a new clientele and drove sales.

    As companies navigate the shared mobility landscape, much like Car2Go, they also are redirecting their subscription resources.

    Ford bowed out of Canvas, a vehicle subscription platform it acquired in 2016, this month. The Ford and Lincoln brands had been piloting subscription services in Los Angeles, San Francisco and Dallas through the service.

    The short-term vehicle rental service of General Motors' Maven mobility brand exited eight U.S. cities in May, including Boston, Chicago and New York, as part of a "shift in strategy."

    The service had launched in 2016 as part of the automaker's solution to compete with Car2Go and other services, such as ZipCar.

    GM's Cadillac service Book, the brand's attempt at a vehicle subscription program that was launched in 2017, has been shuttered and is not accepting new members in the United States.

    Volvo, meanwhile, recently tried to revamp its program, Care by Volvo, to address dealer concerns that it violated California state franchise laws. The subscription service was launched in 2017 before facing dealer pushback.

    Mercedes-Benz expanded its vehicle subscription program to Atlanta in June, a year after launching the pilot program in Nashville and Philadelphia.

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