Nearly every major automaker in Europe is involved in car-sharing to some degree, from pilot programs with just a few dozen cars to large-scale services in major cities.
There are signs this year that the sector, which is also referred to as short-term rentals, is starting to mature, with several operations closing and the two biggest players, Daimler’s Car2Go and BMW’s DriveNow, announcing a merger in an effort to build scale and fend off competition from digital and technology companies such as Uber and Didi.
Volkswagen, Europe’s largest brand, this summer announced that it would place 2,000 electric vehicles on the streets of Berlin, the company’s largest car-sharing initiative yet. In addition, VW Group’s fledgling Moia mobility unit has been running a test service in Hamburg using an electric minibus. The idea of the service is to help reduce traffic jams and pollution.
The economics of car-sharing remain uncertain, however. The global car-sharing market, which includes hundreds of services not associated with automakers, is forecast to reach US$11 billion in revenues by 2024, according to a study by Global Market Insights, with double-digit growth in users every year. But that does not necessarily translate into profits. DriveNow lost 17 million euros in 2017 on revenues of 71 million euros, according to BMW’s annual report, and Daimler reported losses of about 80 million euros at Car2Go subsidiaries, though the company says the service is profitable in more and more cities. “Our company has been investing in massive growth over the last few years,” a Car2Go spokesman said. “The strategic focus has been to gain market share.”
Making money on car-sharing isn’t the goal right now for automakers, experts said. Instead, they are using the services to learn about customer habits and best practices as they prepare to fight for a share of the robotaxi market as they evolve into mobility providers and move away from simply building and selling cars.
“Akio Toyoda made a clear statement at the beginning of this year at the Consumer Electronics Show in Las Vegas, where he shared our willingness to transition from an automotive company to a mobility company,” said Luigi Ksawery Luca, the director of mobility and connected cars at Toyota Europe. Toyota has just expanded its Yuko hybrid car-sharing service to Venice. It is already in Dublin and Forli, Italy. Among the three cities there are fewer than 100 cars, but Luca said Yuko is designed to be a knowledge-seeking trial rather than a profit center. “The purpose is to understand from our side how this business works,” he said.
Along with plans to enter the car-sharing sector starting next year, Volvo says it will be able to build robotaxis from its second-generation scalable product architecture, known as SPA2. “We should have one specialized car for ride-hailing companies. This car will be very different because it will be built without a steering wheel,” Hakan Samuelsson told journalists when introducing Volvo’s 360c autonomous vehicle concept last month. Volvo last year signed a deal with Uber to sell the ride-hailing firm up to 24,000 XC90s underpinned by the first-generation of SPA.