2018 and 2019 is full of merges, acquisitions and new players that enter the carsharing market. In fact, it seems that carsharing has gained some powerful momentum in the past 3 years: close to 1,000 cities have added this type of mobility service, which is an increase of 47%. So our founder, Sandra Phillips, felt it was time to write an update for one of our most popular blog posts from 2018 “CARSHARING MARKET ANALYSIS: GROWTH AND INDUSTRY ANALYSIS”, especially because we have new data.
movmi and the Carsharing Association have teamed up to compile the most comprehensive and up-to-date carshare operator inventory. Our data was collected through web scraping and expert interviews. It lists the name of the carshare operators, categorizes them by business model (station-based, free-floating or peer-to-peer) and gives insight into the electrification of each fleet. The results have been put on a map which the Carsharing Association hosts and will continue to update. If you notice that an organization is missing, please report it so we can update the map.
In this article we will:
- Walk you through the size of the carsharing market and look at some of the top players for each of the business models.
- Have a look at what is going on in Italy and Russia and why they are in the top 3 countries with the most services on offer.
- Take a deeper dive into the composition of carsharing fleets and why there is more momentum towards electrification at the moment.
- Shed some light on the biggest mergers, acquisitions and why we believe this trend will continue over the next 18 months.
Carsharing Market & Growth Analysis 2019
Size of global carsharing industry
As of May 2019 carsharing is offered in 59 countries, which equates to 30% of the entire world. There are 236 carshare operators in 3,128 cities worldwide. Most cities only have one operator and in most cases it is a station-based provider (such as Zipcar, Communauto or Flinkster).
In fact, station-based carsharing is still the dominant model with 61% of all operators running this type of service. It is available in 51 countries, more than any other model. This type of carsharing has been operating since the 1950s and has grown significantly over time. The launch of Zipcar in 2000 and its global expansion is a major factor of why this business model has grown to be the dominant one in the market. It is, however, worth to note that many of the providers are fairly small (less than 100 vehicles). It is possible to launch a station-based carshare with only a few vehicles – more often than not the minimum number of vehicle is dictated by the carsharing technology provider of choice – and the initial launch costs are significantly lower than free-floating schemes.
Free-floating (such as SHARE NOW, Mevo or Emov) has increased its market share by 9% (compared to 2017 numbers) and is now present in 160 cities and over 36 countries. Free-floating has seen a notable, tremendous growth in membership and in fleet sizes. car2go (now SHARE NOW) reported at the beginning of 2019 that their membership increased by 21% year-over-year and is now at 3.6 million members worldwide. movmi’s super user surveys confirm that the low barrier of entry (pay-as-you-go model) and convenience of the on-demand service are the main reasons for the continued growth of this business model despite its substantial up-front investment.
PEER-TO-PEER CARSHARING market
Peer-to-peer (such as Turo, Getaround or Snappcar) still represents a small percentage of providers (6%) and is only available in 19 countries. Making peer-to-peer carsharing available hinges (in most cases) on insurance. Peer-to-peer is still not allowed in many markets because of insurance restrictions. However, once this is remedied, it is easy to add large numbers of vehicles to the network because the cost of ownership is transferred to the individual owner. This is one of the reasons it is available in more cities than any other provider. In fact, Münzel et all (2019) found that in Europe, on average, there are 34.8 peer-to-peer vehicles per 100,000 inhabitants which is significantly higher than the 17.8 carshare vehicles per 100,000 inhabitants that B2C carsharing offers.
Again, this has a lot to do with upfront investment and fleet costs, which are obviously pushed onto the vehicle owner in the case of peer-to-peer.The other reason is that peer-to-peer operators need a larger amount of vehicles in their fleet because they are only available when the vehicle owner does not need it. These are the two main reasons why this business model has seen tremendous growth. The peer-to-peer fleet grew by about 80% and membership more than doubled between 2016 and 2017 (Shaheen’s research).
Geographical Distribution of Carsharing Services
When it comes to the geographical distribution of carsharing services, the United States leads the pack with the highest number of providers. A total of 33 providers are operating and more than half are operating a station-based model.
Obviously the big player is Zipcar (and we will discuss them in more detail below) but Enterprise Carshare, Maven, U-Haul Carshare and the fully electric EnvoyThere all operate in several cities and States. There are also a handful of smaller players that operate in multiple cities but only in one State such as EgoCarshare (Colorado) or Capital Carshare (New York).
While Italy and Russia both do not have any peer-to-peer carshare services, presumably because of insurance requirements, they have a large number of station-based and some of the highest numbers of free-floating services. Italy’s carsharing landscape is composed of a mix of international (SHARE NOW) and local players such as EnvoyThere (oil giant Eni’s carshare), the fully electric Share’Ngo and 4UsMobile, the latter of which is also available in smaller communities.
Russia’s carsharing market is really focused on Moscow. In fact Moscow is the carsharing capital of the world with 20(!) companies offering more than 16,500 carsharing vehicles. And Moscow’s Transportation Department expects the number to rise by 5,000 vehicles annually in the coming years.
Interestingly, not a single international player has entered the Russian market, there is no SHARE NOW or Zipcar available. Instead the market is divided amongst twenty local players that compete for members among the 12.9 million inhabitants. The market is a split of 40-60% for free-floating vs station-based operators.
This, combined with having such a large network available, clearly provides the convenience and reliability that Muscovites are looking for in transportation. The number of rides quadrupled between 2017 and 2018. More than 23 million rides were taken in shared cars in Moscow in 2018!
Since none of the large car manufacturers invested in carsharing in Russia, who are these local players? Groups such as local internet giant Yandex are offering carsharing services. Yandex is essentially Russia’s version of Google and has moved into the transportation industry in 2011 when they launched their cab-hailing service called Yandex.Taxi. Yandex also has partnered with Uber in the region and operates their ridehailing service. In 2018 they entered the carsharing market and launched 7,000 vehicles in Moscow alone. Yandex, like many other internet giants in other parts of the world, has understood their strategic position at the center of the digital economy and is clearly continuing to strengthen its ties with consumers by offering new services.
Going back to the ‘Top 10 Countries’ list, Canadian-based movmi is proud that Canada makes it into the top 4. Canada offers a total of 20 carshare services in different cities, large and small. The market is divided up between a mix of strong local players (such as Modo or Communauto) and international ones (such as SHARE NOW, Zipcar or Turo).
Carsharing Market Top Players
There are only two players that have global reach in the carsharing market: Zipcar and SHARE NOW, the joint-venture between Daimler’s suite of mobility services (car2go, Mytaxi etc) and BMW’s suite of mobility services (DriveNow, Parkmobile etc).
Zipcar is present in 384 cities most of which are in the United States or Canada. But Zipcar is also available in the United Kingdom, Taiwan, Turkey, Iceland and Andorra. Zipcar operates more than 16,000 vehicles and serves more than 1 million members.
Zipcar was part of the 2018 North American Transportation Survey (NATS), an annual email survey conducted in December 2018 with a sample size of 21,000 respondents across North America. The demographic findings for Zipcar’s member are pretty comparable to other carsharing services, with young professionals being amongst their members. However, Zipcar has a higher student membership than any other provider we know of. This, of course, is due to Zipcar’s strategic presence on 600 university and college campuses, a number that no other carshare organization has matched. The high number of students results in 65% of total Zipcar members not owning a vehicle. NATS survey results reported that the average Zipcar trip distance was 47 miles (75.6km). Clearly an indication that the students take Zipcars generally to head out of town for longer trips.
Zipcar is a pioneer in using technology to manage members and fleet, however their product has seen little improvement since Avis acquired the company in 2013. In particular, when it comes to a seamless member experience Zipcar is behind some of the newer players. The table below summarizes movmi’s findings from the 2018 benchmarking study of the four largest services in Seattle:
We know that Zipcar is working on improving its product and service offering and one of the most recent products released is the commuter plan. Vehicle utilization for most station-based carsharing services is low during the week so it makes perfect sense for Zipcar to introduce the Commuter Plan: for $250/month, members can have access to an economy-class vehicle from Monday to Friday. The service includes parking at a Zipcar stall, which can be selected based on the location of the member’s office for convenience. This is a move to enter a market that generally is not as interested in station-based carsharing: commuters. Zipcar initially ran a pilot in Seattle in 2018 and has since expanded this program to other markets. It remains to be seen whether Zipcar will overhaul its entire member experience as well or if it will continue to introduce new plans to capture additional demographics and use cases.
In February 2018 Daimler and BMW announced their new mobility joint venture and brought car2go and DriveNow together under a single roof called SHARE NOW. car2go was the carsharing market leader in free-floating carsharing with 25 cities served. Adding DriveNow, previously offered in 13 cities, SHARE NOW serves over 30 cities (some cities had both services available) in Europe, the United States and Canada. car2go also used to have services available in three cities in China (Chongqing, Shenzhen and Chengdu) but SHARE NOW announced last month that they will withdraw their service from the Chinese market altogether.
The merger of the two services was highly anticipated in the industry and its rationale was highly debated and rumoured about. We believe the main reasons why the two competitors combined forces is to:
- Show market dominance in the carsharing space: with more than 20,000 vehicles and 4 million customers globally, SHARE NOW has taken the pole position for free-floating.
- Expand further: In fact the first post-merger expansion was Budapest in April 2019.
- Compete with technology giants such as Uber or Google by pooling resources, especially on the development side (Daimler’s strong technology suite).
- Create one mobility hub with a MaaS (ReachNow), ridehailing (FreeNow), parking (ParkNow), charging (ChargeNow) and carsharing (ShareNow) offering cementing their leadership amongst the car manufacturers in shared mobility and Smart Cities.
- And, while SHARE NOW’s CEO Oliver Reppert avoids this topic in a recent interview with Wiwo, we also believe it is a way to merge and streamline costly operations.
One of the most exciting things about the SHARE NOW merger is their commitment towards electrification. Today SHARE NOW offers 3,200 electric vehicles in 17 cities, out of which four are already operating with 100 percent electric fleets (all European). By the end of 2020, SHARE NOW will have 25% of their fleet electrified in Europe.
Other promising news for SHARE NOW’s four million customers is the joining of forces with regards to technology. Daimler has always developed their car2go carsharing technology in-house and with the merger BMW will have access to that as well. Soon, SHARE NOW customers will have access to one app that combines the offerings in cities where both services have a presence (such as Berlin, Paris or Vancouver). Customers should also be able to rely on the services more, as car2go has developed dedicated software to ensure maximum availability of their cars which DriveNow will also be able to utilize going forward.
All other players in our top 5 by category have strong presence in one country. Flinkster, a program offered by the Deutsche Bahn (German Rail), has over 4,500 vehicles and the biggest network and reach in Germany. Since it is part of the Deutsche Bahn network, registration is waived if a member owns a Deutsche Bahn Card. Witkar, a free-floating program launched by Dutch car rental company KAV Autoverhuur in 2015, has grown significantly and is present in twenty four cities in the Netherlands. SnappCar, another Dutch carsharing organization, offers peer-to-peer carsharing since 2011. In 2017 Europcar was the lead investor in SnappCar’s Series B funding round. The two organizations have teamed up to launch a program called Drive & Share, a service that gives customers access to a long term car rental (rental period ranging from 3 to 12 months; with various mileage and insurance package). They can also share the rental vehicle on SnappCar’s platform with other SnappCar members when they don’t need it similar to a traditional peer-to-peer model. It is essentially a variation of the subscription models which are very popular amongst the more luxury car manufacturers (such as Book by Cadillac, Care by Volvo or Audi Select).
Electrification of the carsharing market
CO2 emissions and the footprint of private vehicle travel have been in the focus of reports and the media in recent years. In the US about 1.9 billion tons of carbon dioxide emissions were emitted in 2016, that is an increase of 2% from the previous year and it means that transportation has overtaken electric power generation.
According European Commission, road transport is by far the largest emitter in the EEA, accounting for more than 70% of all GHG emissions in 2014. The European Commission has gone as far as setting mandatory reduction targets for new cars by 2020 and adding heavy fines if these targets are not met.
No wonder then that there is an increased focus on moving towards zero-emission vehicles. Each year regional and municipal governments are introducing more regulations to foster a greener transportation system. In fact, in our most recent survey of EV policies in North America, movmi’s team found that sixteen out of twenty-four cities have a clear EV strategy or are in the process of creating one (Calgary).
This increased focus and pressure on zero emission vehicles is one of the reasons why we see more and more carsharing services adding electric vehicles. One additional benefit for carshare operators to add EVs are the low maintenance costs, obviously one of the important line items on their P&L. In 2019, 66% of all carsharing fleets were either all-electric or at least offer some electric vehicles.
Not surprisingly, four out of five countries in the Top 5 List are in Europe because there is more to gain for providers and car manufacturers by focusing on zero emission vehicles. This is due to the EU’s mandatory reduction targets for new cars by 2020 and potential heavy fines. In fact, Italy has more than 55 cities where the entire carsharing fleets are electrified; Share’NGo and 4UsMobile lead the pack. Share’NGo is unique as it offers a small electric quadricycle manufactured by the Chinese company Zhidou (ZD) in a free-floating system.
Share’NGo has over 200,000 members in the four cities they operate (Milan, Rome, Florence and Modena) and is continuing to grow its market share. However, quadricycles were excluded when the Italian government approved the Ecotax and Ecobonus, two measures to increase the number of zero emission vehicles. Emiliano Niccolai, the CEO of Share’NGo, told the Italian press that the future of his company is unclear and 2019 will show if Share’NGo can sustain their operations without this incentive.
Us4Mobile, another all electric carshare operator in Italy, is focused on partnerships with smaller municipalities and has signed up nine communities to date. In most cases, Us4Mobile receives government grants or loans to operate their services in partnership with the municipalities. For instance, the most recent addition in the Lake Garda municipality (8 Renault Zoes) has received a loan from the Ministry of Environment that covers 60% of the costs of the service.
carsharing market Strategic Analysis, Trends and Forecast
According to McKinsey, 50% of the mobility industry’s revenue is likely to be generated in “disrupted” business areas by 2030. There have been almost 1,000 cities that have added carsharing in the last three years which is an increase of services by 47%. This is why forecasts, by different consulting agencies such as Frost & Sullivan, McKinsey, and GMI are all around 20% CAGR.
The current growth can partly be attributed to advancements in technology and an increasing demand from consumers for cost effective and convenient mobility services. However, it really is favourable government policies alongside an increased availability and awareness of on-demand mobility services that have spurred the most recent growth.
We haven’t seen any disruptive innovations in the carsharing market business model in 2019, instead the biggest changes have been a slew of mergers, acquisitions and existing mobility players venturing into new carsharing: The merger that received the most public attention was obviously the “marriage” of Daimler’s car2go and BMW’s DriveNow into ShareNow.
But there were several other acquisitions that positioned players of new mobility offerings better in the ever-growing and evolving market. Getaround, one of the two big peer-to-peer players in North America, acquired the French company Drivy in April 2019. Drivy was the largest and fastest-growing peer-to-peer carsharing platform in Europe. With this acquisition, Getaround is now available in 300 cities in the U.S. and Europe (France, Germany, Spain, Austria, Belgium and the U.K). Claiming that more than five million members are using the service, Getaround has catapulted itself at the forefront of carsharing: its membership base is now bigger than that of SHARE NOW! Smaller international players such as Communauto have also strengthened their position with the acquisition of Ottawa’s Vrtucar, Atlantic Carshare and several smaller Ontario cities in 2018.
There are other providers such as Lime, best known for its brightly coloured e-bikes and e-scooters that are venturing into carsharing.
Lime has started a program called LimePods in Seattle. Initially only 50 “LimePods,” a branded 2018 Fiat 500, were offered but Lime has grown its fleet to a rumoured 1,500 vehicles. As of June 2019, the LimePods have had more than 100,000 drives which is impressive knowing that they only launched in the third quarter of 2018.
Clearly, providing mobility services is all about providing a strong portfolio and network. So either you merge with another strong partner, you acquire a competitor in a different region to strengthen your position, or – if you are as well funded as Lime – you can diversify your own mobility portfolio.
The movmi team predicts that we will see a lot more players diversifying their mobility portfolios, whether that is through mergers, acquisitions or strategic new ventures. Ultimately, to shift people’s behaviour from personal vehicle ownership and into shared mobility, you need a reliable network of transportation alternatives. The bigger yours is, the higher your chance to dominate the market and the relationship with consumers. The question is, does that translate into higher profitability? If you are curious to learn more, get in touch with us.
Note: This article has not been endorsed or sponsored by any provider or market research firm and there is no affiliation between movmi and any of the mentioned parties.