Carsharing Service ShareNow Has Left D.C. What Could Come Next?

ShareNow — previously known as car2go — officially shut down its carsharing business in D.C. and North America over the weekend after eight years in the city. Despite its departure, experts say that carsharing isn't struggling here in the D.C. region.

"Washington D.C. is actually one of the strongest marketplaces for these types of on-demand options in the entire United States," said Susan Shaheen, a professor of engineering who co-directs the Transportation Sustainability Research Center at the University of California Berkeley.

Shaheen attributes D.C.'s strong use of shared mobility services — carsharing, ride-hailing, bike-sharing, and e-scooters, to name a few — to relative support from local government and general walkability.

That means, Shaheen said, that D.C.-area residents are more used to making choices about how to get around. The relationship between different shared mobility services is both competitive and complementary, she thinks — something illustrated in studies she conducted examining the effect of the rise of ride-hailing on carsharing.

"A lot of times what we'd hear is that 'Hey, I love taking car2go to the restaurant, but because 'I'm going to have a couple drinks, I'm going to take Lyft or Uber home, because someone's going to drive me,' " she explained.

Sabrina Sussman, the Senior Manager for Policy and Partnerships at Zipcar, agrees that D.C. is a unique on-demand mobility market. One reason? The close proximity between three different local jurisdictions can spur experimentation, or even competition — a fact the company found out when it was exploring the possibility of parking cars on local streets.

"Arlington County was the first in the D.C. region to say, 'Come park on the streets,' " Sussman said. "DDOT found out, and said 'we want some [Zipcars] too.' "

Shaheen thinks that other carsharing and mobility services will fill the gap left by ShareNow. One option could be a new one-way carsharing service like Gig coming to town, or existing round-trip carsharing companies like Zipcar and Enterprise Carsharing could step in. Free2Move, the latest arrival on the D.C. carsharing scene, is still up and running, and it offers one-way trips similar to ShareNow. Depending on the trip, e-scooters, dockless bikes or bike-share could also be on the table, too.

"What we definitely see is that there's an ecosystem effect, so if you take one mode away, oftentimes it will get filled back up by another option," said Shaheen.

Carsharing Challenges

Shaheen says the industry in D.C. and across the globe is refocusing itself after more than a decade of upheavals like the advent of peer-to-peer carsharing (where one user rents out a personal car to another user) and one-way carsharing (the ShareNow model, where users don't have to return the car to the same place after use).

ShareNow isn't the only company to contract its D.C.-area services in recent years. Maven, a General Motors-backed carsharing company, took its carsharing and peer-to-peer carsharing platforms out of the area last year.

"It's a sign of the times. There's a lot of venture capital money, there's a lot of promise, and there's also a lot of uncertainty," Shaheen said.

ShareNow cites competition and operational challenges as the reasons for its departure.

"There are several factors that exist within the complicated transportation market found in North America," a spokeswoman for the company said in an email to WAMU. "Those include (but are not limited to) a rapidly evolving competitive mobility landscape, private vehicle ownership, the lack of infrastructure to support new technology (including electric vehicle car share) and rising operating costs."

One of those "rising operating costs," according to Shaheen, is linked to heightened competition for curb space, for one.

"Parking itself, having to pay for parking — which the transportation network [ride-hailing] companies, for example, don't — is a substantial part of the cost to a carsharing service," Shaheen said.

And then there's the competitive landscape, which has gotten more and more crowded, particularly with the advent of Uber and Lyft, not to mention dockless scooters and bikes. That makes it more important for companies to carve out a niche, according to Sussman.

"I certainly think that for some of our free-floating partners in the carshare industry, their use case was in many ways analogous to transportation network companies in some cases, and that I think was a business challenge," said Sussman, speaking of one-way carsharing services like ShareNow.

"When you think about all the companies that have IPO'd in the last several years, there are some real struggles as far as how you balance books and how you think about what is your market segment in the midst of all of that," she said.

Zipcar has operated in the District since 2001, before widespread smartphone use, ride-hailing, peer to peer car sharing, or shared bikes and scooters. Washington is the company's sixth-largest market. Sussman declined to say how many local users it has, but she did say that the company's membership in the region is growing.

"We really were in many ways the grandma of mobility, particularly mobility you can find on an app," Sussman told WAMU, noting that the company spent seven years operating in Washington before the iPhone was invented.

Sussman attributes the company's success at weathering big changes in the transportation industry with its focus on serving one specific type of trip: what the company calls "purpose-driven," trips that are more planned out, longer, and often involve multiple people. The average Zipcar trip, according to Sussman, is 52 miles, often to a place that's completely inaccessible by other forms of transit.

"Because we've maintained such an adherence to the round trip model, in making sure that we were really going for those longer trips, I think that that's helped to sort of weather some of that storm," Sussman said.

That includes one slight course correction. In 2016, Zipcar experimented with offering one-way rides in the District, where users could book a car and a parking space for the end of their trip — closer to the park-anywhere model that ShareNow operated. But ultimately, a company spokeswoman said, Zipcar decided to focus on its core round-trip business instead.

Shaheen said that single focus is one hallmark of mobility companies that have managed to stick around.

"What you see with the companies that have been at this for a longer time is maybe a little bit less experimentation, and being a little bit more cautious about investments into new marketplaces, kind of a slow and steady growth model," she said.

That might be something to watch for as the gaps left by ShareNow — and what might fill them — become apparent in the Washington landscape.

"Every change in the ecosystem introduces a chain of reactions," Shaheen said.

Margaret Barthel is a reporter in the WAMU Newsroom.

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