Car sharing is changing urban mobility, but companies are struggling to stay profitable. The idea of cars as a service is gaining popularity, yet obstacles remain.
Car Sharing Grows but Faces Setbacks
Many expected car sharing to replace ownership in big cities. Services like Zipcar and Turo make renting easy. People can borrow a car for a few hours instead of owning one. The trend grew during the pandemic, but momentum is slowing.
In February, Turo dropped plans to go public. Getaround shut down its US car-sharing operations to focus on Europe. Avis Budget also downgraded Zipcar’s valuation, showing uncertainty in the market. Despite these setbacks, interest in car sharing remains high.
Why People Choose Car Sharing
Many city dwellers rely on public transport. For them, owning a car feels unnecessary. However, they still need access to vehicles for some trips. Cars as a service let them rent one when needed, saving money and space.
Car sharing is efficient. Most cars sit unused 95% of the time, taking up valuable space. If more people shared vehicles, fewer cars would be needed. This would cut carbon emissions from car production.
Izzy Romilly, a sustainable transport advocate, says giving up a car leads to unexpected benefits. More people walk and cycle, improving their health. But some flexibility is required, especially in bad weather or for families with children.
Why Car-Sharing Companies Struggle
Car-sharing firms face rising costs. Insurance premiums are high, and parking fees keep increasing. Richard Dilks, CEO of CoMoUK, says the market is tough, but demand remains strong.
Membership in UK car-sharing services grew from 354,000 in 2019 to 873,000 in 2023. In France, car-share journeys jumped 45% in two years. The market is growing, but companies need a way to make profits.
Carmakers Enter the Market
Major automakers are moving into cars as a service. Stellantis runs Free2move, while Renault has Mobilize, both focusing on rentals. British carmaker JLR offers The Out for short-term rentals and Pivotal for longer leases.
JLR’s services attract younger, wealthy customers. Many renters spend more on rentals than buying a car outright. Jasdeep Sawhney, managing director of JLR’s investment arm, says younger buyers prefer flexible lifestyles.
The Future of Car Sharing
Despite setbacks, car sharing is not disappearing. In places like France and Spain, companies like BlaBlaCar succeed by offering long-distance carpooling. In India and Brazil, where public transport is unreliable, demand is rising fast.
Richard Dilks believes car sharing plays a key role in reducing emissions. Cars as a service won’t replace ownership overnight, but they remain part of the solution.
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