Carsharing continues to grow globally and plays a critical role in the shared mobility ecosystem. Station-based, free floating, and peer-to-peer carsharing provide different levels of flexibility and pricing for users, depending on their trip needs. There are also trends towards more multi-modal fleets and new vehicle form factors, making the carsharing space even more dynamic.
Besides bike sharing, carsharing (free floating and station-based) is one of the oldest forms of connected shared mobility, gaining traction since 2010. Since the first setups, we have seen more and more variations of shared vehicles on our streets, ranging from micromobility devices to autonomous shuttles.
Carsharing is still an important part of the shared mobility ecosystem around the globe. Overall, the outlook for further development in the upcoming years is expected to be positive for the industry. This is also accelerated by the increase of safe and convenient mobility options in a post-COVID environment. The pandemic increased the demand for modes of transport with low infection risk. Options like carsharing, personal car or shared micromobility are ranked higher than public transit or ride hailing services.
The number of registered users for station-based carsharing services could nearly triple by 2025, from 55 million in 2020 to 147 million in 2025. Based on a report by Berg Insight, the users of free floating carsharing could increase to 43 million by 2025, up from 17 million in 2020. Not only will users grow, but also fleets. All station-based carsharing vehicles combined could reach a fleet size of 759,000 in 2025, up from 366,000 in 2020. The forecast for free floating fleets is expecting more than 210,000 in-fleeted vehicles by 2025, up from close to 100,000 vehicles in 2020.
Global growth of carsharing members and fleet
Carsharing business models
Carsharing can be sub-categorized into the variations of free floating carsharing, station-based carsharing, and peer-to-peer carsharing.
Free floating carsharing
A free floating service is defined with a business area where vehicles can be picked up and dropped off wherever customers want. The fleets are significantly larger than station-based carsharing platforms to ensure a high density of car availability within short walking distances. In comparison to station-based and peer-2-peer carsharing, free floating services offer the highest flexibility for customers, as one-way trips are possible and the pricing is pay-as-you-use. In addition, no pre-booking or reservations are required, as the fully connected vehicles can be booked on demand via a smartphone app.
The challenge for operators is to balance the supply and demand – operators need to offer a minimum density of vehicles so that users get a great experience when looking for a car. Free floating schemes are often paid per minute (daily rates or hourly packages are also a common of the offering), while station based and peer-2-peer offerings are linked to multi-hour packages or day rates at minimum.
Station-based carsharing, as indicated by the name, is linked to fixed stations. Customers need to pick up and drop off the car at the same location. The services are linked to hourly packages instead of pay-by-minute prices. In some cases, operators also charge a yearly member fee.
Peer-2-peer carsharing can be described as a variant of station-based carsharing. The vehicles need to be returned to the start location of the trip and there is typically a minimum rental period of several hours. The difference with peer-2-peer is the fleet ownership – the vehicles are either owned by individuals that are renting out their car when there is no personal use or the cars are owned and managed by so-called micro entrepreneurs. Micro entrepreneurs manage a fleet for several cars and offer them on multiple peer-2-peer carsharing platforms.
Pros and cons of different sharing models
Carsharing around the globe
Share of carsharing vehicles by region in station-based fleets (left) and free floating fleets (right)
As data by Berg Insight show, the Asia-Pacific region is dominated by station-based services – roughly 99% of the vehicles are station-based. Asian markets are often more regulated and station-based offerings are the preferred solutions to align with local regulations, especially with the better damage and vandalism control. Only small-scale services in China, Australia, and New Zealand use a free floating setup.
Meanwhile in North America, roughly 30% of the carsharing vehicles are free floating, the rest is station-based. Several companies tried to scale free floating carsharing but most of them reduced or stopped their services. Customers are showing a higher demand for peer-2-peer carsharing in the US. Multiple well-funded startups are building their networks across the country. The setup of peer-2-peer carsharing is more in line with the mobility and patterns and infrastructure in North America.
Due to the needed density of vehicles, free floating carsharing services focus on larger cities to get the chance to reach the needed utilization of their fleets. In Europe, close to 40% of the vehicles are deployed as free floating, with a big share in the tier 1 cities like Spain, Italy or Germany. In addition, around 50 different operators are active in more than 130 cities across the continent. The setup in Western Europe is still characterized by large operators like SHARE NOW, Free2Move or Zity that are financed by automotive OEMs. Eastern Europe is seeing an interesting dynamic of more independent and VC funded players.
Station-based carsharing services can also be found in smaller cities and towns, as a smaller user base is sufficient to utilize a smaller fleet, concentrated at selected locations. Interestingly, the UK is dominated by station-based schemes.
Diving into Germany, there are more than 14,000 free floating carsharing vehicles being used by 2.1 million members throughout 10 to 15 cities. In comparison, station-based services can be found in 830 cities and towns, with a fleet of 12,000 vehicles being used by 724,000 members.
Surprisingly, Russia has become the largest and one of the fast-growing carsharing markets in the world. Yandex, the “Google of Russia”, entered the free floating dominated carsharing market, creating pressure on the other players with low prices and large fleets. The two largest carsharing providers combined have more than 37,000 vehicles deployed in cities like Moscow, St. Petersburg, and Sochi.
Multiple carsharing providers are testing or considering multi-modal setups. The first ones were Poppy Mobility and Aimo, who did this by adding mopeds and kick scooters in cities like Brussels, Antwerp or Stockholm. Taking benefits of the increased demand for safe and low infection risk free mobility options, GoTo announced a multi-modal fleet launch with their expansion to Spain and GO Sharing is going from mopeds-only to a setup also including bikes and cars.
Changing pricing structures
Due to increasing competition and changing user behaviors, many carsharing providers are also experimenting with their pricing schemes. The goal is to offer a more flexible setup of pricing options linked to customer demands. Instead of offering predefined multi-hour packages that put users under pressure to return the car, operators work with so-called cost parachutes to limit the costs per day, week, or even month. Besides that, operators are testing monthly budgets or subscriptions, where users pay a monthly membership fee to get better rates per minute and also additional benefits in some cases.
Increasing share of EVs
An increasing share of service providers are electrifying their free floating fleets in multiple cities. Close to 40% of the free floating carsharing providers in Europe already work with a 100% electric fleet. This number is being supplemented by operators with hybrid fleets, a mix of ICE (internal combustion engine) cars and electric vehicles. So far, the carsharing companies are taking standard vehicles and equipping the cars with IoT devices to make them fully connected on their platforms. In China, the majority of carsharing schemes in dense urban areas rely on EV vehicles, also to comply with the stricter local zero emission policies.
The trend towards shared EVs is driven by the mission of the providers to offer shared and emission-free mobility. In addition, it also helps or is even required to win the public policy play with cities and authorities. Customers are showing an increased demand for emission-free mobility as well.
Models from multiple brands are being used for electric carsharing. The Renault Zoe, BMW i3, and Volkswagen e-Golf can be seen on many platforms. The launch of models like the Volkswagen ID.3, Peugeot e-208, and Fiat 500e is increasing the lineup of models to choose from.
Free-floating carsharing split in Europe based on engine type
Increasing share of purpose-built vehicles
In addition to using standard passenger cars for carsharing, operators are experimenting with special purpose vehicles (SPVs) or cars with smaller form factors. The focus is either on more durability or a smaller footprint for the devices. Getaround started a service with light electric vehicles for carsharing in Rotterdam, Enuu just launched with small pods in Berlin, and new entrants are preparing to launch in more cities in Europe soon.
Free2Move is the only OEM-funded platform that is already using a SPV for carsharing, the Citroen AMI, which is used on the platform in Europe and North America. Other OEMs like SEAT or Renault have teased small electric vehicles designed for carsharing, but have not announced any detailed plans with next steps. Overall, SPVs could lead to significant reduction of vehicle-to-market costs, as well as further customizing and fully integrating the user experiences.