Car2Go dying: further effects from the rise of ride hailing and damage to the sustainable mobility platform/mobility as a service paradigm
I have written about what I call the sustainable mobility platform and its various components.
An element of the SMP is the concept of "mobility as a service" and I have suggested that DC is a world leader in the implementation of MaaS.
One way car share is a key element in the Sustainable Mobility Platform.
Business mergers often result in failure. There are many many stories in business about failed mergers, because the dominant player in the merger lacked the finesse to deal with the acquired company, maybe it was really a different line of business, e.g., consumer focused instead of business focused, like Flip camera bought by Cisco ("Why Cisco killed the Flip mini camcorder," CNET).
Or it was in the same line of business and the purchaser thought they knew everything and they didn't. Like how Safeway destroyed companies it bought in Chicago ("Dominick's owner Safeway exiting Chicago market," Crain's Chicago Business) and Philadelphia, and significantly "impaired" companies it bought in Texas.
GM's purchase of Saab. Ford's purchase of Jaguar, Land Rover, Volvo...
BMW Group and Daimler AG combine mobility services," Daimler press release) in 2018.
Maybe it wasn't about expertise, but about two companies not knowing what to do and figuring they should join and muddle through together, but without much of a strategy on how to move forward?
This comes up because of how the merger has handled the car sharing operations of the two companies, DriveNow and Car2Go, the latter now called ShareNow, have been or are being killed off, not unlike what happened with Safeway's supermarkets in Philadelphia and Chicago.
In July BMW's DriveNow operation was shut down, after it was put in a division different from Car2Go ("BMW ReachNow car-sharing service shuts down in Seattle," GeekWire).
In September, Car2Go shut down a number of operations in the US ("Sustainable mobility platform in view of Car2Go's dialing back of one-way car sharing in the US").
Now, they've announced they are shutting down all North American operations effective in February 2020 (plus a few in Europe), to focus on Europe ("Share Now, formerly Car2Go, is leaving North America," The Verge). From the article:
Share Now, the car-sharing service formerly known as Car2Go, is leaving North America. Daimler and BMW, the two global automakers that share ownership of Share Now, said it would cease service on February 29th, 2020. Share Now currently operates in New York City, Montreal, Seattle, Washington, DC, and Vancouver.Awhile back, commenter charlie made the succinct point that probably it has been ride hailing that's had the most significant negative impact on car sharing. I think that's true, because many people would rather be driven than drive themselves, even if driving yourself is cheaper.
The decision was based on “two complicated realities,” Daimler and BMW said in a joint statement: the “volatile state of the global mobility industry” and rising infrastructure costs associated with operating a car-sharing service in North America.
While we had remained hopeful that we would be able to come to a solution — especially these last few months — we are ultimately not in a position to commit to the level of investment necessary to make the North American market successful both in the near and long term,” the companies said.
That's true, sure. Ultimately though, there are too many companies operating in this space, ride hailing will always drive "taxi service" in a race to the bottom, because even as income drops there will always be desperate people willing to drive.
And if they have to make a choice, a European company is less likely to remain committed to the US market.
Venture capital effects. Of course, the other element of "ride hailing killing car share" is venture capital ("Is there too much venture capital?," Brookings).
Venture capital subsidization of ride hailing trips below cost not only impacts transit ("New research on how ride-hailing impact travel behavior," UC Davis) but car sharing too.
Being listed on stock exchanges, having to be more concerned about the cost of capital and the rate of return, for profit companies owning car share companies can't afford the same level of subsidy compared to ride hailing companies like Uber and Lyft ("Uber fares are cheap, thanks to venture capital. But is that free ride ending?," Los Angeles Times).
Free2Move/Peugeot. Note that a couple years ago, Peugeot created a one way car sharing company, called Free2Move ("Peugeot owner chooses DC for Free2Move car sharing launch," WTOP-radio). First it was an app integrating the various services into one interface.
Then it added an actual car sharing service, which at this time it only operates in DC. Now it will be the only "major" operator of one way car share in the US.
I wonder if they will seek to expand to some of the markets that Car2Go is abandoning?
The difference between Free2Move and Car2Go is the use of extremely small vehicles. In places where parking supply is extremely tight, the smaller car is a "killer app." Free2Move uses Chevrolet Equinox and Chevrolet Cruze vehicles, which are comparatively larger.
Labels: intelligent transportation systems/ITS, mobility as a service (MaaS), sustainable mobility platform, transit, transportation as a service (TaaS), transportation infrastructure, transportation planning