Several years ago, shared cars burst into European cities to offer a mobility alternative to its citizens: with carsharing they can have a vehicle only when they need it and only pay for the use they make of it. Several brands have joined this movement, but luck has not been on the side of the Germans. First it was Mercedes and BMW: now it is Volkswagen that sells its carsharing business.
The Volkswagen Group has sold WeShare, its car-sharing business, to the Miles Mobility start-up without disclosing the price of the operation. Despite the success that the carsharing formula has had in different European cities (Madrid is an example of this), for the German manufacturer it has not been a profitable industry.
Miles Mobility, a company based in Berlin, will integrate into its fleet the 2,000 electric vehicles (Volkswagen ID.3 and ID.4) that WeShare had in Berlin and Hamburg. The more than 200,000 users will not notice the change, since the car sharing service will continue as before and, in the coming weeks, customers and cars will be integrated into the Miles system.
The German start-up is one of the few exceptions in the industry: in 2021 it broke even in its accounts with 47 million euros. It is present in eight german cities (Berlin, Bonn, Düsseldorf, Duisburg, Hamburg, Cologne, Munich and Potsdam) and this year it expanded to Belgium (Brussels and Ghent). With this movement, it seeks to expand the limits of carsharing by offering trips from city to city.
Its fleet (70% made up of Volkswagen Group models that are not necessarily electric) will not only grow with the arrival of WeShare’s Volkswagen ID.3 and ID.4. In 2023, 10,000 new units of the Audi, Seat, Cupra and Volkswagen brands will arrive.
BMW, Mercedes and carsharing
Although the Volkswagen Group expects around 20% of revenue to come from its subscription services and other mobility offerings by 2030, WeShare’s business has failed to take off. The decision to sell it arose, as Christian Dahlheim (executive director of Volkswagen Financial Services) explained, when he realized that they could not improve their profitability beyond 2022.
It is not the only brand that has fallen by the wayside: Mercedes and BMW tried to turn their car-sharing companies into a source of profit without much success: last summer they sold their business (Share Now) to Free2Move, Stellantis’ mobility line.
BMW and Mercedes started sharing cars in 2011 and 2008, respectively. His goal was to get closer to younger drivers: they offered them the possibility of testing their products with a hypothetical future purchase in mind and, at the same time, responding to their changing mobility needs in cities.
Although Share Now was withdrawn from North America in 2019, in Europe became one of the leaders of carsharing including, for example, long-term rental beyond the use per minute. However, they struggled to make a profit and it is estimated that they lost around 200 million euros annually.
Last May, the two German manufacturers sold Share Now to Stellantis to focus on the software part of their mobility alliance. Or what is the same: Free Now (an application that allows booking cars with driver, taxis, e-scooters and e-bikes) and Charge Now (the charging infrastructure reservation app).
The side of the coin: Stellantis
Stellantis and, specifically, Renault have made a strong commitment to the car-sharing service, making it an important objective within Mobilize. And it is that they aspire to position themselves as world leader in carsharing.
Thus, its agreement with Mercedes and BMW was part of the group’s plans to increase net income from carsharing to €700 million by 2025 and 2.8 billion euros in 2030… compared to 40 million euros in 2021. Not surprisingly, over the next decade, Stellantis intends to expand Free2move’s presence worldwide, thus increasing its number of active users up to 15 million.