Car2go Business Model

The Car2go business model revolves around providing car-sharing services in urban areas. Initially established by Daimler in 2008, Car2go allowed users to rent cars by the minute, providing flexibility and convenience for short-duration trips. The company offered a diverse fleet of vehicles, including Smart, Mercedes-Benz, BMW, Mini, Fiat, and Citroën. Users could access the vehicles through a smartphone app and were charged based on time or distance.

In 2022, ShareNow was acquired by Stellantis and became a subsidiary of the Free2Move division. With a fleet of over 14,000 vehicles and millions of registered members, ShareNow continues to provide car-sharing services in Europe.

A brief history of Car2go (ShareNow)

• 2007: VULOG, a French company, launches a similar car-sharing service in Antibes, France, which later inspired Car2go;

• Munich: The Galileo competition Master announces the concept of “rent a car by minute, when and how long I want, where I am and where I go,” which lays the foundation for Car2go’s business model;

• October 2008: Daimler introduces Car2go in Ulm, Germany. Developed by one of Daimler’s internal business innovation units, it offers car-sharing services exclusively to Daimler employees for testing and feedback purposes;

• May 2015: Car2go introduces a $1 ‘Driver Protection Fee’ for each ride to offset the lowered insurance deductible, ensuring a higher level of user protection;

• 2016: Car2go experiences challenges in the San Diego market due to its all-electric vehicle fleet’s lack of charging stations. As a result, the company replaced its electric cars with gasoline-powered vehicles starting May 1, 2016;

• March 2018: Daimler announces its acquisition of the remaining 25% stake of minority shareholder Europcar Group, making car2go’s European subsidiary 100% owned by Daimler’s subsidiary, Daimler Mobility Services;

• Late 2019: ShareNow, the company resulting from the merger of Car2go and missionDriveNow, strategically decided to close its operations in several North American cities, including New York City, Seattle, and Washington DC. The closure is attributed to excessive competition, increasing costs, and limited infrastructure for supporting electric vehicles;

• 2020: ShareNow ceases its services in London, Brussels, and Florence due to inadequate usage and limited infrastructure. The company focuses on cities in Europe with the greatest potential for profitable growth and mobility innovation;

• May 2022: Stellantis, the multinational automaker, announced its ShareNow acquisition. The acquisition aims to strengthen Stellantis’ position in the mobility sector, with ShareNow becoming a subsidiary of the Free2Move division;

• July 2022: The acquisition process of ShareNow by Stellantis is completed, and Free2Move assumes ownership and management of the company. This transition marks a new chapter for ShareNow within the Stellantis group.

Who Owns Car2go

The most recent ownership development for ShareNow occurred on May 3, 2022, when it was announced that automobile manufacturer Stellantis had acquired the company. The acquisition was finalized on July 18, 2022, and ShareNow is now under the ownership of Stellantis. Free2Move, a subsidiary of Stellantis, currently manages the ownership and operations of ShareNow.

Car2go Mission Statement

Car2go’s (ShareNow) mission statement is “to revolutionize urban transportation and to make it more accessible and sustainable for everyone.”

How Car2go (ShareNow) works

Car2go’s business model was based on providing a network of shared vehicles that customers can access and use on demand. The company offers a variety of vehicles, including compact cars and electric vehicles, to suit different customer preferences and needs. Customers can locate and reserve available vehicles using the Car2go mobile app or website.

To use Car2go’s services, customers first create an account with the company. Once their account is set up, they can use the mobile app or website to search for nearby available vehicles. The app provides real-time information on vehicle availability and allows customers to reserve a vehicle for a specific period.

When customers approach the reserved vehicle, they can use the Car2go app to unlock it. The app uses technology to securely unlock the vehicle, allowing the customer to access and use it immediately. Customers are then free to drive the vehicle as needed, whether for a short trip across town or a longer journey outside the city limits.

Car2go’s pricing model is designed to be flexible and affordable. Customers are charged per minute for the time they spend using the vehicle, with rates varying depending on the type of vehicle and the city in which it is being used. Fuel costs and insurance are included in the rental fee, making it a hassle-free experience for customers.

Once customers have reached their destination, they can park the vehicle in any legal parking spot within the designated Car2go service area. This eliminates the need to find and pay for parking, providing added convenience and time-saving benefits.

The unique business model of Car2go (now ShareNow) and its focus on convenience and affordability have made it a popular choice for urban dwellers worldwide. The company continues to expand its service area and fleet size, offering customers an even greater range of options for their transportation needs.

How Car2go makes money

Car2go, now known as ShareNow, operates a car-sharing business model that allows users to rent cars on a short-term basis. The company generates revenue through various sources as outlined below:

ShareNow Pass and Usage Fees

Car2go (ShareNow) charges its users’ membership fees to access its savings feature known as ShareNow Pass. These fees are paid monthly, providing users with discounted rental rates and priority vehicle access. Additionally, Car2go charges usage fees based on the time users drive the rented cars. These fees are typically calculated hourly or per minute, ensuring that the company generates revenue from the actual usage of its vehicles.

Wholesale Vehicle Purchases

Car2go also generates revenue by purchasing vehicles at wholesale prices and adding them to its fleet. By negotiating favorable deals with car manufacturers or dealerships, the company can acquire vehicles at a lower cost and then rent them out to users at a higher rate. This wholesale purchasing model enables Car2go to profit from users’ rental fees while utilizing the vehicles.

Insurance Partnerships

Car2go partners with insurance companies to provide coverage for its rented vehicles. Through these partnerships, Car2go receives a portion of the insurance premiums paid by its users. This allows the company to monetize the insurance aspect of its car-sharing service and ensure that its vehicle fleet and users are adequately protected.

Car2go Business Model Canvas

Car2go Customer Segments

Car2go’s customer segment is diverse and includes the following:

• Individual Users: Individual users form a significant part of Car2go’s customer segment. These users sign up for Car2go’s services to access shared vehicles for transportation. They are typically urban dwellers who rely on convenient and flexible transportation options. Whether it’s for running errands, commuting to work, or leisurely activities, individual users value the accessibility and affordability provided by Car2go. These users are not associated with specific brands or businesses but benefit from the convenience and cost-saving aspect of car sharing;

• Business Users: Business users represent another important segment for Car2go. These individuals or organizations utilize Car2go’s services for their professional needs. Business users may include employees traveling for work, companies looking for flexible transportation options for their staff, or businesses that require vehicles for deliveries or client meetings. Car2go’s business accounts offer custom solutions and additional features like expense tracking and reporting to meet the specific needs of this user segment;

• Tourists and Travelers: Car2go also caters to tourists and travelers who are visiting different cities and need a flexible means of transportation. These users may not have access to personal vehicles or prefer not to rent a traditional car. Car2go provides an ideal solution by offering short-term car rentals that allow tourists to explore the city at their own pace. This customer segment values the convenience, affordability, and freedom of accessing a vehicle whenever and wherever they need it, without the commitment of ownership;

• Sustainable and Eco-conscious Users: Car2go attracts a segment of users who prioritize sustainability and environmental consciousness. These users opt for car sharing as a greener alternative to car ownership. By choosing Car2go, these individuals contribute to reducing traffic congestion and carbon emissions in urban areas. This segment appreciates Car2go’s commitment to promoting sustainable transportation options and aligns with the brand’s values.

Car2go Value Propositions

Car2go’s value propositions consist of:

• For Individual Users: Car2go (now ShareNow) offers individual users a convenient and cost-effective transportation solution. They can access a fleet of shared vehicles on-demand, allowing them to move around the city easily. Using Car2go, individual users save money on car ownership costs such as maintenance, insurance, and parking fees. They enjoy the flexibility of picking up and dropping off vehicles at various locations, making it suitable for short trips or multi-stop journeys. Car2go’s digital platform and mobile app provide a seamless user experience, allowing individuals to easily locate and reserve vehicles, as well as track their trips and payments;

• For Business Users: Car2go caters to the needs of business users by offering flexible transportation solutions tailored to their professional requirements. They provide businesses with access to a fleet of shared vehicles that can be used for employee travel, client meetings, deliveries, and more. Car2go’s business accounts streamline expense management through features like customized reporting and integration with expense tracking tools. With Car2go, businesses enjoy the convenience of on-demand vehicles without the hassle of maintaining a dedicated fleet. They can easily scale their transportation needs based on demand, ensuring cost efficiency and flexibility;

• For Tourists and Travelers: Car2go addresses the transportation needs of tourists and travelers by providing them with a hassle-free solution to explore a new city. They offer short-term car rentals that allow tourists to move around at their own pace and convenience. With Car2go’s wide network of vehicles and simple rental process, tourists can easily access a car without the commitments and paperwork associated with traditional car rentals. They have the freedom to visit popular attractions, explore off-the-beaten-path locations, and embark on day trips without relying on public transportation or spending on expensive taxis;

• For Sustainable and Eco-conscious Users: Car2go appeals to sustainable and eco-conscious users who prioritize reducing their environmental impact. By choosing Car2go, they reduce traffic congestion and carbon emissions in urban areas. Car2go’s shared vehicles are typically electric or fuel-efficient, aligning with their values of sustainability. They are satisfied knowing that their transportation choices support a greener future. Car2go provides an easy and accessible way for these users to make environmentally friendly decisions without compromising on convenience or affordability.

Car2go Channels

Car2go’s channels consist of:

• Mobile App: Car2go operates primarily through a mobile application, allowing customers to locate and reserve vehicles, unlock and start them, and monitor their usage;
• Website: Car2go also provides an online platform where customers can access information about the service, sign up for membership, and manage their accounts;
• Call Center: The company maintains a customer support center to handle inquiries, bookings, and assistance for users who prefer to communicate over the phone;
• Partnerships: Car2go collaborates with various organizations to expand its reach and provide convenient service access. This includes partnerships with airports, public transportation systems, hotels, and ride-sharing platforms.

Car2go Customer Relationships

Car2go’s customer relationships consist of:

• Self-Service: Car2go emphasizes a self-service model, where customers can access and use their vehicles without staff assistance. This allows for flexibility and convenience for users;
• Customer Support: The company provides customer support through various channels, including email, phone, and social media, to assist users with any inquiries, issues, or emergencies they may encounter during their car-sharing experience;
• Community Engagement: Car2go (now ShareNow) encourages customer community engagement. For example, it organized events and meetups for members to connect and share their experiences;
• Feedback Mechanisms: The company actively listens to customer feedback to improve its services and address any concerns or suggestions. It uses surveys, ratings, and customer reviews to gather insights and make necessary adjustments.

Car2go Revenue Streams

Car2go’s revenue streams consist of:

• Usage Fees: Car2go (now ShareNow) generates revenue through the fees charged for using their vehicles. Customers are billed based on rental duration or mileage, depending on the location;
• ShareNow Pass: The company charges an optional recurring ShareNow pass fee, which provides access to discounts on their car-sharing service;
• Late Fees: Car2go (now ShareNow) imposes penalties on customers who exceed the agreed-upon rental duration or fail to return vehicles promptly, adding a revenue stream. In addition, there are late cancellation fees, no-show fees, and low fuel fees;
• Additional Services: The company may offer additional services such as insurance packages, which generate supplementary revenue.

Car2go Key Resources

Car2go’s key resources consist of:

• Fleet of Vehicles: Car2go owns and maintains a fleet of vehicles. These vehicles are essential for providing the car-sharing service;
• Technology Infrastructure: The company relies on robust technology infrastructure, including its mobile app, website, and backend systems, to facilitate the booking, usage, and management of vehicles;
• Partnerships: Car2go builds and maintains partnerships with various organizations, such as automobile manufacturers and insurance providers, to ensure a steady supply of vehicles and support services;
• Brand and Reputation: The company’s brand and reputation are valuable resources as they influence customer trust, brand loyalty, and the ability to attract new users and partnerships.

Car2go Key Activities

Car2go’s key activities consist of:

• Vehicle fleet management and maintenance
• Software development
• User Registration
• Customer support
• Marketing
• Insurance coverage management
• Mobile app development

Car2go Key Partners

Car2go’s key partners consist of:

• Automobile manufacturers
• Insurance companies
• Technology providers
• City governments
• Fuel station companies
• Maintenance service providers
• Advertising agencies
• Payment processors

Car2go Cost Structure

Car2go’s cost structure consists of:

• Vehicle procurement and maintenance
• Insurance expenses
• Technology infrastructure
• Marketing and promotion
• Fuel and energy costs
• Administrative overhead
• Data analysis expenses
• Licensing and compliance fees
• Research and development costs

Car2go Competitors

Car2go operates in a highly competitive market with several key competitors. Here are some of its main rivals:

• Zipcar: Zipcar is a prominent car-sharing company that operates primarily in North America and Europe. It offers both hourly and daily rental options and has a vast fleet of vehicles available to its members. While Car2go focuses on one-way trips using a free-floating model, Zipcar allows members to book specific vehicles for a specific period;

• Getaround: Getaround is a peer-to-peer car-sharing platform that allows individuals to rent out their personal vehicles to others on an hourly or daily basis. It has a significant presence in the United States and offers a more personalized car-sharing experience compared to Car2go’s fleet model;

• Uber/Lyft: While not traditional car-sharing services, ride-hailing platforms like Uber and Lyft are direct competitors to Car2go. These services provide on-demand transportation through professionally driven vehicles, eliminating the need for personal car ownership or car-sharing memberships;

• Communauto: Communauto is a leading car-sharing company based in Canada and France. It offers various rental options, including one-way trips, round-trip bookings, and long-term rentals. It has a strong focus on sustainability, providing hybrid and electric vehicles to its members;

• Turo: Turo is a peer-to-peer car-sharing platform that allows vehicle owners to rent out unused cars to individuals needing transportation. It offers a wide variety of vehicles available for rent in various locations;

• Enterprise CarShare: Enterprise CarShare is a division of Enterprise Rent-A-Car that offers short-term vehicle rentals for both individuals and businesses. It provides a diverse fleet of vehicles in various sizes and locations;

• Evo Car Share: Evo Car Share is a Canadian car-sharing service available in Vancouver, British Columbia. It provides a fleet of hybrid vehicles for on-demand rentals, with flexible pricing options and the ability to park in any legal city parking spot.

Car2go SWOT Analysis

This SWOT analysis will highlight the strengths, weaknesses, opportunities, and threats that Car2go (ShareNow) faces in the highly competitive car-sharing market.

Car2go Strengths

• Strong brand image: Car2go has established itself as a trusted brand in the car-sharing industry, known for its reliability, convenience, and high-quality vehicles;
• Large fleet size: The company boasts a large fleet of vehicles, offering users a wide range of options to choose from, ensuring availability in busy urban areas;
• User-friendly app: Car2go’s mobile app provides a seamless user experience, allowing customers to find easily and reserve vehicles, track their usage, and manage their accounts;
• Cost-effective solution: Car2go’s pay-per-minute pricing model makes it an affordable transportation option for short trips or occasional use, offering savings compared to traditional car rental services.

Car2go Weaknesses

• Limited coverage: Car2go’s service is only available in select cities, limiting its market reach and potential customer base;
• Inconvenient parking: Finding suitable parking spaces can be a challenge, especially in crowded urban areas, which may deter customers and cause inconvenience;
• Dependence on smartphone usage: Car2go heavily relies on smartphone technology for reservations, vehicle access, and billing, which may exclude potential customers without smartphones or those who are not tech-savvy;
• Non-availability during peak demand: Due to high demand during peak traffic hours, Car2go vehicles may not be available when needed, leading to customer dissatisfaction.

Car2go Opportunities

• Expansion into new markets: Car2go has the opportunity to enter new cities, both domestically and internationally, to tap into new customer segments and increase its market share;
• Partnership with other transportation providers: Collaborating with public transportation systems or ride-sharing platforms presents an opportunity for Car2go to enhance its service offerings and reach a wider audience;
• Integration with smart city initiatives: Car2go can explore partnerships with municipalities to align its operations with smart city initiatives, potentially accessing government grants and subsidies.

Car2go Threats

• Increasing competition: Car2go faces intense competition from existing car-sharing platforms as well as new market entrants, which pose a threat to its market share and profitability;
• Ride-hailing apps: The popularity of ride-hailing apps such as Uber and Lyft may divert potential car-sharing customers who prioritize the convenience of door-to-door service;
• Stringent regulations: Changes in regulations related to parking, vehicle sharing, and insurance can increase operating costs and create barriers to Car2go’s growth;
• Economic downturns: During economic downturns, people tend to cut back on discretionary spending, which could negatively impact Car2go’s customer base and utilization rates.

Conclusion

Car2go’s (now ShareNow) business model has revolutionized the way people think about car sharing and urban mobility. By offering a flexible and convenient solution, Car2go has successfully tapped into the growing demand for alternative transportation options. Its key strengths lie in its unique one-way car-sharing system, a user-friendly mobile app, and a diverse fleet of vehicles.

Furthermore, Car2go has effectively addressed sustainability concerns by incorporating electric and hybrid vehicles into its fleet. Despite facing challenges like competition and varying regulatory environments, Car2go’s innovative approach and customer-centric focus have positioned it as one of the leading players in the car-sharing industry. As the sharing economy continues to evolve, Car2go and its new iteration ShareNow are well-positioned to adapt and thrive in the years to come.