Car-sharing services, once touted as the future of urban mobility, are facing significant challenges, even as more people embrace the concept of “consuming” rather than owning cars.
Services such as Zipcar, Enterprise Car Club, and Share Now offer app-based car rental by the hour, while platforms like Hiyacar, Turo, and Getaround allow users to rent cars from neighbours. However, financial pressures are mounting. Turo abandoned its plans to go public, and Getaround has withdrawn its US car-sharing operations. Reflecting these trends, the valuation of Zipcar, the world’s largest car-sharing company, was recently decreased by its owner, Avis Budget.
For many urban residents, car ownership is no longer a necessity. Public transport systems in major cities like London have made car ownership less critical, and the rise of app-based services offered a seemingly ideal solution. Izzy Romilly, the sustainable transport manager for the green group Possible, notes that those who give up car ownership in cities often find “unexpected benefits” including improved health and reduced stress.
Despite the difficulties, user numbers for car-sharing services continue to increase. In the UK, the number of users rose from 354,000 in 2019 to 873,000 last September.
Richard Dilks, CoMoUK’s chief executive, says that the demand side “remains strong.” He acknowledges, however, that the industry faces “loads of challenges on the supply side.” The challenge lies in making these services profitable, given rising operational costs.
Carmakers themselves are getting into the shared-mobility game. Stellantis, which owns Fiat and Peugeot, has its own car-sharing service, Free2move, while Renault has Mobilize.
JLR (Jaguar Land Rover) has set up services, The Out and Pivotal, that provide access to luxury cars without the burdens of traditional ownership. Jasdeep Sawhney, the managing director of InMotion Ventures, JLR’s start-up investment arm, notes that these services exemplify the shift from the “ownership economy” to the “consumption economy,” especially among younger demographics.
JLR’s car-sharing services are proving popular and allow the company to generate revenue from a younger customer base.
These trends suggest that car-sharing, in its various forms, is poised to play an increasingly significant role in personal transportation, but profitability remains a key hurdle.
