Daimler’s New car2go Car Sharing Business

Yesterday, Daimler’s internal innovation group launched a new car-sharing service called car2go. It’s very similar to Zipcar but with some added flexibility in drop off location. It will first be tested in Ulm, Germany by Daimler employees.  Once this trial phase is complete, car2go is expected to expand across major European cities. 

It’s one thing for a start up company like Zipcar to offer this service but what would cause a traditional car company to invest in such a revolutionary business model?  There are 2 converging trends driving Daimler to sell transportation vs. cars: (1) global urbanization and (2) urban car restrictions due to parking, emissions, and usage regulations. So if you’ve made your money manufacturing and selling cars to individual drivers, the above 2 trends foretell a future where private car ownership for city dwellers not only becomes impractical – but also undesirable. Combine that with emerging bike-share programs in Europe and car-share businesses operating in America (such as Zipcar), and you’ve got some pretty strong indicators that the growing urban market is changing. The car2go service allows  you to reserve your Smart car (owned by Daimler) using a mobile phone or through a website.  You can pick up and drop off the car anywhere within the city limits and the service takes care of cleaning, insurance, fueling, and maintenance.  You just pay by the minute for the use of the car – all inclusive.  The Smart cars will come with a variety of diesel, hybrid and electric power-trains. It will be interesting if Daimler can really establish themselves as a transportation service provider vs. a vehicle manufacturer. For more about car2go, click here for a video demo. So what do you think? Is this something a car company can do? Have you tried such a service or would you in the future? And what if Daimler’s car2go service offered a selection of AMG Mercedes or even an SLR..