Car rental app that suffered string of Mercedes-Benz thefts is pulling out of 5 cities
Car2go, an app-based car rental service, is pulling out of five cities, including one where more than 100 of its vehicles were reportedly stolen earlier this year.
The service will exit Denver, Austin, Texas; Portland, Oregon; and Calgary, Canada, effective Oct. 31. It will leave Chicago effective Dec. 31, the company told FOX Business.
“The decision was not made lightly,” car2go said in a written statement. “We have had to face the hard reality that despite our efforts, we underestimated the investment and resources that are truly necessary to make our service successful in these complex transportation markets amid a quickly-changing mobility landscape.”
Car2go describes itself as a “free-floating carshare.” Its members can use the company’s app to rent any available car without a reservation, use it as needed and then leave it parked in a legal spot without refueling. The vehicles car2go offers include Mercedes-Benz CLA sedans and GLA SUVs and smaller smart fortwo coupes.
A car2go rental car (Credit: car2go)
Users in Chicago were able to misuse car2go’s app to steal more than 100 of its vehicles in April, FOX 32 Chicago reported. The vehicles were later found, and more than 20 people were charged in connection to the thefts.
The thefts forced car2go to suspend its service in Chicago for a week as the company worked to institute an “enhanced, multi-layered verification process,” according to the report.
Car2go said that the incident was unrelated to its decision to leave Chicago, saying that was a unique situation of fraud.
“The reality is, Chicago is a complex market — due to its growth and infrastructure — and requires a significant investment on the part of any mobility provider wanting to enter the city,” a car2go spokesperson told FOX Business. “While we still believe that Chicago is well-suited for free-floating carshare, we underestimated what was necessary for our business to grow in this market at this time.”
Car2go will continue offering its service in New York, Seattle, Washington, Montreal and Vancouver, Canada. The company said it would refocus its efforts and resources on those cities “that present the clearest path to free-floating carshare success.”
The service launched in North America in 2009. In its statement, car2go said transportation “has changed drastically” since then.
“The transportation market is highly volatile, especially in North America,” car2go said. “We are certainly not the only transportation player — from traditional automakers to ride-hail giants to micro-mobility disruptors — who have had to face this reality and adjust course. Ultimately, we know that in order to ensure the future of our business in North America, we have to think differently about where and how we operate.”