Sustainable mobility platform in view of Car2Go's dialing back of one-way car sharing in the US

On Friday, Car2Go, the company that was originally owned by Mercedes Benz but now is a joint venture with BMW, announced that they are shutting down one-way car sharing operations in five cities: Austin (where they first launched in North America); Calgary; Chicago; Denver; and Portland ("Car2go pulls out of 5 North American cities casting more doubt on free-floating car-sharing’s viability," GeekWire).  From the article:

“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.

Portland in particular is a shock because it's held up as the poster child of sustainable mobility. Calgary too has an extensive light rail system, but also is one of the headquarters of the oil economy in Alberta/Canada.

By happenstance, earlier in the week, in "Car free vs. car light/lite," I wrote about where the sustainable mobility paradigm is likely to be successful and by counter example, where it isn't likely to be successful:

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In a private e-discussion we were talking about car share and how car sharing firms are discontinuing service in many markets, and I made the point that you have to have the right antecedents for a Sustainable Mobility Platform to be able to be created and sustained.

The antecedents: (1) urban form; (2) density; and (3) a robust transit network preferably rail-based.

In these places you have the form and density to be car free, and the support of a transit system to be able to get places beyond walking distance.  Then, you can layer on everything else--bus and shuttles and jitney-type service to extend the transit system, bike share, car share, e-scooters, e-bikes, taxis and ride hailing (which are sustainable modes only when used in moderation, not when used instead of transit), delivery, etc.

This all gets back to Peter Muller's paper, "Transportation and Urban Form: Stages in the Spatial Evolution of the American Metropolis."

Cities designed during the Walking (before 1890) and Transit City eras (1890-1920) are built for sustainable mobility.  Cities built afterwards were built for automobility.  And it's very difficult to repattern such cities for sustainable mobility.

That includes car share.  In places where the vast majority of people "need" cars to get around for the simplest of tasks, people buy cars because it's cheaper than fractional use if you are using those cars for multiple trips every day.

Because you need the right urban form and reasonable population density and a decent transit system, I think it's difficult for most places to shift to a sustainable mobility paradigm.

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The third point, a robust transit network, with a foundation in rail is important.  Portland is a good example of why.  Even though DC's Metrorail system has degraded, causing a massive decrease in rail and bus riders, there are still 600,000 daily rides on the Metrorail subway and probably between 600,000 and 700,000 rides on all the various bus systems in the metropolitan area.

By contrast, Portland's transit system has about one quarter of the daily ridership of the DC area.

(4) I didn't mention a fourth point which is essential, and that is a strong and well-used transit network is the foundation for people choosing to not own cars or to own fewer cars than the typical American household.  In DC, 40% of households don't own cars.  And that includes a high number of high income households.

Not owning a car creates demand for biking, transit, other micromodes, and car share, especially for atypical uses (moving stuff, going someplace with many people, going to a place that is less well connected by transit, etc.).

(Granted, one discouragement of car ownership is the difficulty of finding street parking.  Many houses in DC don't have rear parking and so people have to park on the street.  The difficulty of finding parking places encourages people to not own cars.)

While old reports are likely a little less true today, these articles indicate that many new households come to DC city in part because they don't want to own a car.  New households tend to be higher income compared to existing households, given current pro-city trends and attitudes concerning residential choice.

By contrast, while Chicago's rate of non-car ownership is high, 27%, it's still significantly lower than DC and is more likely to be comprised of low income households. And Portland's rate of non-car ownership is "low," about 13%, again likely to be concentrated in low income households.

-- " Over 37 Percent Of D.C. Households Don't Have A Car," DCist
-- " 88% of new DC households are car-free," Greater Greater Washington
-- "Vehicle Ownership in U.S. Cities Data and Map," Governing Magazine

I don't exactly know why Chicago is being dropped.  It is spread out, and they have had serious issues with vandalism ("100 car2go Mercedes hijacked in Chicago crime spree," TechCrunch).

Similarly, Enterprise Carshare, which bought the nonprofit car share IGo in 2013, shut it down in 2017 ("Enterprise CarShare halts service in Chicago, citing 'theft," Chicago Tribune).

Theoretically though, Chicago should be a city where a sustainable mobility platform can thrive.  But it's large, 220 square miles, and probably the conditions for sustainable mobility aren't equally favorable in many parts of the city.

LimePod ceases operations in Seattle.  I did know that ReachNow, the BMW service, shut down, but I attributed that to a poor decision by the firms in not just merging into Car2Go, when they created the joint venture ("Car2Go cars to go away, fleet to rebrand after BMW merger," Vancouver Sun).

And GM's Maven ("GM's Maven exits show tough road for mobility," Automotive News). From the article:

GM, after expanding its Maven mobility brand to 17 metropolitan markets in the U.S. and Canada since January 2016, last week announced a "shift in strategy" that included exiting eight U.S. cities to concentrate on areas with "the strongest current demand and growth potential," the company said.

The pullback is the latest example of the balancing act automakers face between spending on unproven business models based on emerging technologies and reinvesting in their profitable primary business, manufacturing and selling vehicles.

"Alternative ownership, ride-hailing and car-sharing is still the Wild West," IHS Markit principal automotive analyst Stephanie Brinley said. "The opportunity for mobility services to generate revenue is there, and it's true, but getting from here to there is messy. And the scale, we don't fully know."

I didn't know that Lime shut down its car share service there too ("LimePod car-sharing program ending in Seattle," KIRO-TV).

Not that it couldn't have worked, but my sense is that Lime is doing all kinds of stuff ("growing bigly") to justify continued receipt of venture capital investments (not unlike Uber) and they didn't have a clear sense of a business model and why they were doing it.

FWIW, Seattle is Car2Go's most successful market in the US, and the service continues to thrive there.

Conclusions for firms.  Building the right business model.  Much of the built form of the United States, especially in the past 75 years, has been designed to require automobility.  Sustainable mobility and what I call the sustainable mobility platform works best in conditions that predate automobility-centric built form.

Like how I argue that people learned the wrong lessons about e-scooters ("What the e-scooter industry hasn't figured out about Santa Monica: It's recreation not transportation," 2018), it's not clear that firms participating in the sustainable mobility space have figured out the business model for where it works and where it doesn't.

As capital becomes more scarce, and firms have to generate faster rates of return, they are going to be abandoning markets where they've introduced their service.

WRT cities like Seattle and Vancouver being strong bases for one-way car share, Car2Go has 132,000 members in Seattle and 200,000 in Vancouver.

The four required pre-conditions.  But most US cities aren't a good market.  They need (1) the right urban form; (2) density of population; (3) a high number of households choosing to not own cars by choice; and (4) a solid and successful transit system as the foundation for a robust sustainable mobility platform.

Are regulatory costs a factor?  Although one factor might be "regulatory burden" and that we don't know.  Cities, desperate for revenue, are torn between seeing car share as a transportation demand management mechanism ("Car share as a method for managing the demand for on-street parking: Hoboken, NJ," 2013) and a way to generate revenue by charging high rates to place the cars in the public space, and for "free parking" by users within the city.

Plus, many cities also have high sales tax rates on car share (ARE TAXES ON CARSHARING TOO HIGH?, Chaddick Institute, DePaul University), which tend to be much greater than taxes on taxi rides or the cost of residential parking permits.

The need for ongoing marketing.   Observationally, I believe that the companies don't fully recognize the need for ongoing marketing, including in person "street team" marketing, such as at festivals, etc.  Zipcar still invests a lot in online and social media advertising, but not active outreach marketing.  To some extent, that's true of Car2Go too.

In a world where the land use and transportation paradigm is still built around mobility, constant marketing is a necessity for car share firms, as they lose members over time as they move, etc., they need to constantly grow the numbers of active users.

When Enterprise Car Share first launched, they had some great ads for television.  I was a bit shocked, because to me, while great, they needed to run the ads not nationally, but in the markets where they offered the service.

Similarly, Zipcar had tv ads too.

Conclusion for users.  I've used Car2Go and Zipcar in other markets, and that's part of its appeal (just as the universal deployment of the Lyft and Uber "taxi" apps simplify the use of "taxis" anywhere, rather than your having to learn the nature of the local taxi market when you travel).  And one of the markets where I used Car2Go in the past, San Diego, was dropped a long time ago.

While it won't make me stop using those services in DC, it does likely mean making other choices when traveling as car share firms reduce their footprint in North America.