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BMW & Mercedes Offload Car Sharing Business

BMW and Mercedes-Benz are dumping ShareNow — their jointly managed car-sharing businesses — and Stellantis will reportedly become the recipient. Effectively a merger of BMW’s DriveNow and Mercedes’ (technically Daimler AG’s) slurry of similar services that were rolled into car2go, ShareNow’s individual components have spent the last decade trying to figure out which markets would embrace app-based, roadside rentals charging by the minute and which would reject it. 

As with most ride-sharing firms, it took years of trial and error to learn how best to manage a decentralized fleet that’s still beholden to a single cooperate entity. Pricing also represented a challenge, with similar businesses initially trying to keep rates low to grow their user base before getting to the tricky business of finagling real profitability. However, this ultimately forced ShareNow to downsize in 2019, pulling out of the United States entirely to better prioritize Europe.

The company now limits itself to fifteen of the continent’s most densely packed cities, with management citing increased costs and competition the further it ventured from Western Europe. But this was exactly what Stellantis was looking for, according to Reuters:

Brigitte Courtehoux, who heads Stellantis’ mobility division Free2move, said the deal was part of the group’s plans to grow net revenue from that business to 700 million euros ($735 million) in 2025 and to 2.8 billion euros in 2030, up from 40 million euros last year.

“We will really accelerate in terms of revenue,” she said.

Stellantis will strengthen its mobility division Free2move via the deal, hoping a global push to cut emissions will also drive demand for car-sharing and open new profit streams.

Over the next decade, Stellantis intends to expand Free2move’s presence worldwide, growing it to 15 million active users.

It’s sort of a curious decision, considering the service it’s buying literally attempted the same thing and ended up downsizing to focus almost entirely on German cities and a handful of European metropolises beyond the borders of Deutschland. BMW and Mercedes’ joint operation is currently presumed to lose 200 million euros per year. But Stellantis believes it has a secret weapon in terms of product.

ShareNow presently offers a mix of smaller vehicles from BMW, Mini, Mercedes, and Smart that differs between regions. Free2move would gradually replace those with offerings from Jeep, Peugeot, and Fiat. Stellantis also wants to have entirely electrified fleets in Europe by 2030 and the U.S. by 2035.

“Maybe Stellantis, with its low financial investment and a leaner cost structure, can make more out of it,” Juergen Pieper, an analyst at Bankhaus Metzler, suggested.

Pieper has estimated that the transaction likely wouldn’t exceed $525 million and was likely closer to $262 million. However other outlets have cited the deal as being closer to $100 million.

[Image: Dutchmen Photography/Shutterstock]

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