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Breaking News: Car2go to shutter operations in five cities as mobility landscape changes

Ride-hailing and peer-to-peer models cut into traditional car-sharing market.

Car2go, the flagship car-sharing service known for its zippy blue and white Smart cars, is closing down operations in five major North American cities. Members received notice of the closures in an email sent on September 27.

Service in Austin, Calgary, Denver and Portland will end at midnight on October 31, 2019, Car2go spokesperson Tiffany Young  told FreightWaves in an email. Chicago service will end at midnight on December 31, 2019.

“While we firmly believe that Portland deserves free-floating carshare, it is a complex transportation market that requires a significant investment on the part of any mobility provider wanting to enter the city and unfortunately, we are unable to continue doing so in a manner that’s sustainable for our business,” the email to Portland members read. 

The closures are a blow to Car2go, an early mobility pioneer that launched in Seattle in 2012 and quickly became part of the urban landscape in cities around North America.  

But the business seemed to stumble as ride-hailing giants charged into the rapidly-changing mobility market.  Playing defense, Car2go, a Daimler service, partnered with BMW’s rival car share service DriveNow last spring to form a new entity Share Now.

Peer-to-peer car sharing services also surged past their fixed asset predecessors. This summer the peer-to-peer car sharing start-ups Getaround and Turo announced large funding rounds. Bike- and scooter-sharing added to the competition.

Young deflected a question about the impact of ride-hailing on the Car2go model.

“The rapid growth and popularity of new mobility players means that – more than ever before – people are embracing shared mobility options, including free-floating carshare, to move around the cities in which they live,” she said in the email. 

“What this ultimately means is that the need for personal vehicle ownership is declining, and that itself is a good thing.”

The Car2go closures come one week after Lime announced it was shutting down LimePod, its car-sharing service that it launched last November in Seattle.

Car2go will continue to operate in Montreal, New York City, Seattle, Vancouver and Washington D.C., Young said.

This is a breaking news story.  Check back for updates.

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to [email protected]