Navigant Research Blog

Carsharing Consolidation and Diversification

Lisa Jerram — October 7, 2015

When carsharing began in the 1980s and 1990s, it was seen as a sustainable alternative to the dependence on private cars in developed economies like Europe and North America. The concept was viewed—much like carpooling—as appealing to a small niche of environmentally conscious drivers. The market was also pioneered by people committed to the sustainability cause. The carsharing services that sprung up in European and North American cities tended to be local businesses with strong ties to the community. In the 2000s, the market took a leap forward after the launch of Zipcar in the United States. After it rapidly became the biggest carshare company (in terms of membership), Zipcar furthered its reach by merging or acquiring other services—most notably through merging with the other big player in the U.S. market, Flexcar, in 2007.

Today, the carsharing industry is now a major global business, albeit one that is still more popular in North America and Europe. Navigant Research estimates that there will be around 4.7 million carsharing service members worldwide by the end of 2015 and that global membership will grow to almost 24 million by 2024. The market landscape looks quite different than it did in its early days, with more large players like Zipcar accounting for significant shares of global membership. Zipcar is estimated to have around 900,000 members, while Daimler’s car2go service reports having 1 million members. Socar, a service in South Korea, has stated a gain of 600,000 members since opening in 2012, and a Tokyo-based service called Times Car PLUS reports around 430,000 members. Large auto companies have increased their interest in the carsharing market in part because of these numbers. Zipcar was acquired by Avis in 2013; automakers Daimler and BMW are now running carshare programs; Time Car PLUS is run by a large parking lot company; and French conglomerate Bollore launched a successful Parisian carshare service, Autolib’, and has since opened services in London and Indianapolis. Another successful South Korean carshare company, CityCar, is operated by a subsidiary of LG.

Is Bigger Going to Be Better?

Consolidation has been a trend for carsharing recently; Zipcar acquired several smaller companies in Europe and the United States, and rental car company Enterprise acquired the United Kingdom’s largest independent carsharing company, City Car Club. But this market still has plenty of small, local players and will continue to support such services. Small players are more likely to remain in the round-trip carshare service model, however, as the recent trend has been toward more one-way services like car2go and Autolib’. A one-way service requires a larger fleet of vehicles deployed upfront, and thus is more likely to attract larger companies that can afford this investment. Navigant Research also expects to see more large companies acquiring smaller competitors as a means to expand market share. But the market is not likely to move to just a handful of large companies, as small, localized carshare services are banding together to strengthen market position. Although large carshare companies will represent a significant chunk of membership numbers, the market over the next decade will continue to support both large and small operations.

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