A few years ago, a great idea made the rounds: The sharing economy. Why own something if you could share the ownership – and the costs – with others? The idea permeated the auto industry. Many even saw the end of traditional car ownership. Fast forward to 2023, and that vision has yet to manifest. Car sales are booming around the world. There seems to be no trend towards sharing your car with others. What happened to the great idea of carsharing?
Carsharing is not a new idea. It was already promoted in America in the 1940s, mainly to save fuel. Then it was adopted in Switzerland. Many grassroots initiatives have sprung up, especially in Europe. In many German cities, local initiatives or utilities offer car sharing.
With the advent of mobile Internet and GPS, a new generation of car sharing became possible: Free-floating car sharing. You could pick up any car, unlock it with an app on your phone, and drive away. Then you could drop it off anywhere you wanted – within a certain area. No need to drive to a special station, no need to talk to anyone, no need to worry about opening hours. And you only pay for what you drive, not for the whole day.
Many people in the auto industry saw this as a trend that would eventually lead to a decline in car ownership, because why own a car, especially in a crowded city where parking is scarce and expensive?
Established car companies saw this as a threat to their business models of selling cars. To stay on top of the game, they jumped on the bandwagon and started their own car-sharing companies. Examples include Drive Now by BMW and Sixt, and Car2Go by Mercedes.
These companies released large fleets of their cars (preferably the brands of their parent companies) in cities across Europe and North America.
They convinced city councils to allow these cars to be parked for free in the cities – the promise being that fleets of carsharing vehicles would convince people to get rid of their own cars and switch to shared vehicles. In this way, users, cities, and companies would all win.
We are now in the year 2023. The once hot topic of carsharing is now very quiet in the press. The last article in the Economist on this topic was published in 2016 – now 7 years ago. Moreover, car sales are higher than ever. In the last 20 years, they have gone from 60 million worldwide to over 85 million (source). It seems that the industry has woken up from a dream.
Sure, there are still carsharing companies. But the high-flying dreams once associated with carsharing have apparently not materialized. BMW and Mercedes found that they could not run their carsharing fleets profitably, which led them to merge their fleets. You can still find them around under the name Share Now. But only in Europe – the companies have pulled out of the North American market.
But even in European cities, the prospects for carsharing are bleak. The offer of free car sharing has not encouraged people to give up their own cars. The impact on private car ownership has been negligible (source). On the contrary, the ready availability of cars leads people who do not own a car to use them instead of public transport, because it is now more convenient to do so. It has also been observed that most car sharing users in large cities already own one or two cars (source). In addition, statistics show that each carsharing vehicle is moved for only one hour per day (source).
Instead of reducing traffic and freeing up parking space, carsharing has had the opposite effect: More cars now compete for the same parking space.
Nevertheless, cities are still betting on the idea. Munich, for example, wants to create 1,000 new parking spaces for carsharing vehicles (source). The hope that people will give up their own cars in favor of a shared car is still alive, despite evidence to the contrary.
Carsharing was hyped as a new trend that could replace private cars and improve our cities. Many companies and cities jumped on the bandwagon. We can clearly see that this has not happened.
This does not mean that carsharing is dead, there are still some companies and grassroots initiatives. But they are still relatively rare and their impact on cities is negligible.
It seems that the sharing economy, at least as far as cars are concerned, was a dream that existed only in the minds of a few people, while most customers still like to have the comfort and convenience of their own car whenever they can afford it.
An important lesson from this story is that people often do not behave the way city planners or business people want or expect them to. Many of the benefits of carsharing have been, and continue to be, repeated in the hope that this will make them true. But the numbers tell a different story, and the story seems to be that people will always do what is in their own best interest, not what the planners have in mind.
Of course, we don’t know how people will behave until we try it, so we can consider the carsharing systems that have been installed in recent years as a great social experiment. But in my opinion, this experiment has shown that carsharing does not solve any real traffic or urban problems. So we should try some other ideas to make our cities more livable, instead of throwing more money into a concept that does not show the proposed benefits.