Shared vehicles burst into European cities some years ago to provide a mobility alternative to its citizens. With carsharing, they can have a car only when they need it and only pay for the use they make of it. Several brands have joined this movement, but German fortune has yet to be on their side. After Mercedes-Benz and BMW, Volkswagen is now selling its carsharing company.
The Volkswagen Group has sold WeShare, its carsharing business, to the Miles Mobility start-up for an undisclosed sum. Despite the popularity of the carsharing formula in some European locations (Madrid is an example), it has yet to be a profitable sector for the German automaker.
Miles Mobility, a Berlin-based company, will include the 2,000 electric vehicles (Volkswagen ID.3 and Volkswagen ID.4) that WeShare has in Berlin and Hamburg. The carsharing service will continue as usual for the more than 200,000 users, and customers and automobiles will be merged into the Miles system in the coming weeks.
Miles Mobility is one of the few exceptions, making a profit of 47 million euros in 2021. The German start-up is currently present in eight cities (Berlin, Bonn, Düsseldorf, Duisburg, Hamburg, Cologne, Munich, and Potsdam), and it expanded to Belgium this year (Brussels and Ghent). This movement aims to broaden the carsharing scope by providing travel from city to city.
Its fleet (70% of which are non-electric Volkswagen cars) will not only rise with the launch of WeShare's Volkswagen ID.3 and Volkswagen ID.4. 10,000 new Audi, Seat, Cupra, and Volkswagen vehicles will be delivered in 2023.
Although the Volkswagen Group expects subscription services and other mobility solutions to generate roughly 20% revenue by 2030, WeShare's business has yet to take off. As Christian Dahlheim (executive director of Volkswagen Financial Services) indicated, the decision to sell resulted from the realization that they could not improve their profitability beyond 2022.
It is not the only brand that has faded: Mercedes-Benz and BMW attempted but failed to do their carsharing businesses into profitable ventures, selling their firm (Share Now) to Stellantis' Free2Move mobility line last summer.
BMW and Mercedes began carpooling in 2011 and 2008, respectively. Its goal was to reach closer to younger drivers by offering them the opportunity to try out their products with a hypothetical future purchase in mind while also reacting to their evolving mobility needs in cities.
Although Share Now left North America in 2019, it became one of the pioneers in carsharing in Europe, providing long-term leases beyond minute use. They failed to make a profit, though, and it is estimated that they lost roughly 200 million euros annually.
In May, Mercedes-Benz and BMW sold Share Now to Stellantis to focus on their mobility partnership's software component. What's the difference between Free Now (an app that lets you reserve cars with drivers, taxis, e-scooters, and e-bikes) and Charge Now? (the recharging infrastructure reservation app).
Stellantis and, in particular, Renault have made significant investments in the carsharing service, making it a key goal for Mobilize. And it is with this goal in mind they seek to be the world leader in carsharing.
As a result, its arrangement with Mercedes-Benz and BMW was part of the group's objectives to boost net income from carsharing to 700 million euros in 2025 and 2.8 billion euros in 2030, up from 40 million euros in 2021. Stellantis wants to grow Free2move's global reach over the next decade, bringing the number of active users to 15 million. @via Miles Mobility.
