Car sharing’s origins date back to 1948 in Switzerland, with faster growth starting in the 1970s. The market has expanded further in the last two decades, driven by restrictions on city center private car use, advanced digital technologies, and shifting consumer attitudes around car ownership. However, it remains a relatively small market, accounting for less than 5% of the US $100 billion global shared mobility market.
Car-sharing schemes have faced a number of challenges, both for operators looking to build economically viable, scalable businesses as well as for authorities tasked with regulating them within and the overall mobility system. Looking ahead, car sharing has a key role to play in the integrated mobility system, in large part driven by increasing demand for sustainability and convenience. This Report explores the benefits and pitfalls of car sharing and describes strategies for success for both regulators and operators.
Car sharing has the potential to come into its own as a critical part of future mobility systems, alongside fixed route public transport (buses, trains, metros), on-demand public transport (ride hailing, ride sharing), micromobility (bikes and scooters), and deliveries and services (logistics, couriers). Indeed, a properly framed car-sharing scheme offers three main benefits. First, it improves the overall performance of the mobility system by enhancing connectivity, increasing access, and increasing system capacity. Second, it contributes to better sustainability and safety by significantly reducing the number of privately owned cars. Third, it offers the convenience of a private vehicle for users picking up goods, trip chaining,[1] or traveling out of town.
However, when car sharing is not properly framed into the overall mobility system, there are some pitfalls. For example, free-floating schemes (those without fixed parking stations) may encourage users to choose cars over mass-transport modes. There may also be cleanliness/condition issues from improperly maintained vehicles and some stationary vehicle nuisance issues (although less so than bikes and scooters).
Cities and transport authorities have struggled to regulate car sharing for two main reasons. First, regulation has often been overly restrictive, focused on limiting the scheme’s impact, rather than collaborating with operators to maximize overall mobility system benefits. In some cases (e.g., Car2Go in Toronto), limitations on area access and parking led to operators exiting the market altogether. Second, inadequate coordination between authorities across jurisdictional boundaries has often led to inconsistencies that confuse users.
The key challenge for operators is the business model. Many struggled to achieve profitability due to high operating costs, poor coordination with competitors, narrow focus (e.g., premium niches or B2B customers requiring costly customization), unfavorable revenue-sharing models with municipalities, and/or lack of collaboration with vehicle OEMs. Finally, inadequate parking arrangements with authorities have depressed customer uptake, as have delays in essential upgrades for operators relying entirely on third parties for their digital platforms.
Success in this market requires evolving car-sharing schemes beyond the traditional and OEM-led models. Future schemes must integrate better with the broader shared-mobility system and place services in locations where they add the most value.
We refer to this as the “ecosystem player stage.” Key features include designing the system around simplifying mobility for the user, using car sharing as a complement to the public transport backbone in both city centers and outskirts (including possibly providing subsidies for trips that are less profitable but benefit the overall system), and designing the system to suit as many consumers as possible (low/middle rather than premium).
For city authorities, this translates into seven imperatives:
For operators, we identify five imperatives:
As the shift away from car ownership continues and new mobility models become better integrated into the overall mobility system, car sharing has the potential to deliver major benefits to both customers and transport authorities. Looking further ahead, as autonomous vehicles (AVs) and robotaxis become more mainstream, we can expect car sharing to converge with ride sharing.
Car sharing is a component of the mobility offering in many major cities today, with a global market of about $3 billion and a predicted forecast of 20% CAGR over the next decade. More than 250 operators provide services in around 3,000 cities, about 30% of the world’s total. It’s nevertheless a relatively small part of the approximately $100 billion overall shared mobility market: less than 5% of the total.
The first recorded implementation of a car-sharing scheme was in Zürich in 1948 (known as the Selbstfahrergenossenschaft scheme). Further development of cooperative schemes took place in the 1970s and 1980s, mainly in Switzerland and Germany, although also in other countries on a smaller scale. Growth has accelerated in the last two decades, driven by rising traffic congestion, restrictions on private cars in city centers, digital technologies like mobile apps, and a gradual shift away from a desire for individual car ownership, especially among younger adults.
As post-pandemic pressure to develop and improve urban mobility systems continues, car sharing has a vital role to play, both in reducing private car journeys and as a complement to public transport systems. However, integrating car sharing within the mobility system has proven challenging for cities and transport authorities.
From an operator’s perspective, car sharing has not been without its hurdles. Although analysts expect double-digit market growth per annum in the coming years (driven by increased consumer willingness to use shared modes and a regulatory push to steer people away from private cars), the financial business case for traditional (i.e., asset-heavy) car sharing is uncertain. Many new ventures struggled for profitability, including Share Now, a 2019 joint venture between Daimler and BMW that combined their car-sharing services (Car2Go and DriveNow, respectively). Following the formation of the joint venture, Share Now pulled out of North American and British markets. Three years later, after losing €123 million in 2020 and €70 million in 2021, Daimler and BMW pulled out altogether, selling the business to Stellantis, operator of Free2move.
This Report explores the drivers, benefits, pitfalls, and strategies for success for car sharing, drawing on lessons learned from across the world. We draw conclusions for both transport authorities and operators on how, using the right ecosystem-based approach, car sharing can achieve its full potential as an essential part of the mobility system.
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