Why Big Car Brands Keep Stumbling in the Car‑Sharing Market

Why Big Car Brands Keep Stumbling in the Car‑Sharing Market

Image: Why Big Car Brands Keep Stumbling in the Car‑Sharing Market – Performance Comparison and Specifications

Car manufacturers have tried to turn their production prowess into daily‑rental revenue for years, but the results have been underwhelming. In this article we dig into the why‑behind the failures of big‑brand car‑sharing ventures, from Renault Mobilize to Stellantis Free2Move. We’ll look at the strategic missteps, the regulatory hurdles, and the shifting preferences of urban drivers. Source: AutoNews

1. The Dream: Turning a Car Into a Service

On paper, the logic is simple: a global automaker that can churn out millions of vehicles should be able to monetise a car in more ways than just selling it to a dealer. The idea caught fire after the 2010s, when consultants started urging manufacturers to add a “mobility arm” to their balance sheets. Brands rebranded dull financing divisions with sleek logos—think Toyota Kinto—and set ambitious profit targets for direct‑to‑consumer services.

2. From Manufacturing Muscle to Urban Mobility

Manufacturing expertise does not automatically translate into success in dense city environments. BMW and Mercedes‑Benz were early pioneers with DriveNow and Car2Go. Their fleets were packed with models equipped with ADAS (advanced driver‑assistance systems) and even a few turbo‑petrol powertrains for that extra zip.

However, the challenges of parking rights, city‑level permits, and shifting congestion charges quickly turned the venture from promising to problematic. A single tweak to a congestion tax in London, for instance, made the business case for Zipcar evaporate almost overnight.

3. The Regulatory Minefield

Urban authorities control the most critical resource for a car‑sharing service: parking space. When a city decides to raise resident parking fees, the cost of operating a shared fleet can skyrocket. In many cases, the new fees are passed directly onto the consumer, eroding the price advantage that car‑sharing promises over ownership.

Moreover, each borough can have its own set of rules about where a shared vehicle may be left, what insurance standards apply, and how data is reported. This patchwork of regulations makes scaling a service across an entire metropolitan area a logistical nightmare.

4. The Consumer Equation: Ownership vs. Subscription vs. Share

Urban drivers today juggle a complex set of choices:

• Traditional ownership (buy or lease a car)
• Subscription services that bundle maintenance, insurance, and swaps (e.g., Mercedes‑Benz Subscribe)
• Short‑term car‑sharing platforms

Each option has a different cost structure and flexibility level. When a city imposes a new resident parking charge, the calculus changes dramatically. For many, the added fee makes car‑sharing less attractive, pushing them back toward a subscription or even a fully electric EV that qualifies for free parking zones.

5. Case Study: The Rise and Fall of DriveNow/Car2Go

BMW and Mercedes merged their services in 2018 to create a joint fleet under the Share Now umbrella. The hope was that combining resources would overcome local regulatory barriers and achieve the critical mass needed for profitability. Instead, the partnership struggled to harmonise pricing, vehicle selection, and branding. By 2022, Stellantis acquired the operation, and the original DriveNow and Car2Go names faded away.

6. What the Numbers Say

7. Design & Dimensions of Typical Shared Vehicles

8. Feature Comparison Across the Big Players

9. Engine Specifications – The Powertrain Mix

10. Price Comparison – What Drivers Actually Pay

11. Lessons Learned and the Road Ahead

What can the industry take away from these setbacks?

• Local Partnerships Matter: Working hand‑in‑hand with city planners to secure dedicated parking zones and clear regulatory frameworks is essential.
• Focus on Simplicity: Consumers want a frictionless experience. Complex pricing tiers or multiple apps drive users away.
• Electrify the Fleet Fast: Many municipalities are already offering free or discounted parking for electric vehicles. A high‑percentage EV fleet can turn a regulatory challenge into a competitive advantage.
• Separate the Brand From the Service: When a premium automaker’s name is attached to a low‑margin sharing service, any failure can tarnish the core brand. Stand‑alone mobility subsidiaries help contain risk.

Conclusion

Big car manufacturers entered the car‑sharing arena with the confidence that their manufacturing might translate into service might. In reality, the urban mobility puzzle is far more intricate than a production line. Regulatory quirks, shifting consumer preferences, and the need for ultra‑flexible pricing have kept many of these ventures from scaling profitably. The brands that survive will be those that adapt quickly, partner locally, and put electric, low‑cost vehicles at the heart of the offering.

FAQ

What is the main reason big brands fail in car sharing?

Complex city regulations, especially parking and congestion charges, make scaling difficult.

Which brand currently has the largest car‑sharing fleet in Europe?

As of 2024, Share Now (Stellantis) operates the largest fleet, though numbers are close with Free2Move.

Do electric vehicles improve the profitability of car‑sharing services?

Yes, because many cities grant free parking and lower operating costs for EVs.

How does a subscription differ from car sharing?

Subscriptions give you a dedicated vehicle for a flat monthly fee, while car sharing provides on‑demand access to a shared fleet.

Can a car‑sharing service be profitable without municipal support?

It’s challenging; most successful models rely on city‑level incentives like dedicated parking zones.

What role does ADAS play in shared fleets?

Advanced driver‑assistance systems reduce accident risk and improve user confidence, which is vital for high‑turnover fleets.

Are there any successful examples of car‑sharing in the United States?

Zipcar remains profitable in several US cities, but it has faced setbacks in places like London due to policy changes.

How important is brand perception for a shared mobility service?

Very important – a premium brand can attract users, but any service failure can also damage the parent brand’s image.

What is the typical hourly rate for a shared vehicle in major European cities?

Rates generally range from US$5.5 to US$6.5 per hour, depending on the provider and vehicle type.

Will autonomous vehicles change the car‑sharing landscape?

Potentially, but regulatory and safety challenges mean widespread deployment is still years away.