Why Car-Sharing Companies Keep Failing

The model comes with high costs that make it unsustainable without subsidies.

1 minute read

November 21, 2024, 7:00 AM PST

By Diana Ionescu @aworkoffiction


Close-up of hand holding up phone with car sharing app open in front of parked cars.

scharfsinn86 / Adobe Stock

Writing in Next City, Nithin Coca attempts to suss out why car-sharing companies keep going out of business: largely, their for-profit model, which doesn’t lend itself to the type of service coverage they would need to provide. 

According to Coca, “For-profit car-sharing models have a fundamental challenge: They need to set prices high enough to at least break even. Often, that means prices are too high for those in low-income communities, who tend to have less access to cars and public transportation in general.” For this reason, companies have stuck largely to more well-off neighborhoods where residents are already more likely to own cars.

One new California car-sharing service, Míocar, operates in low-income areas supported by a grant from the California Air Resources Board. “It’s also seeing high utilization rates, with cars sometimes booked months in advance.” However, Caroline Jane Rodier, Associate Director of the Urban Land Use and Transportation Center at the University of California, Davis, warns that “Without subsidies, it’s not going to work.” 

If successful, Míocar “could point towards a new non-profit model for car-sharing, where the focus is on equity, access and climate benefits from reduced emissions and fossil fuel consumption.”

Coca points out that ‘free-flowing’ car-sharing systems are thriving in other countries, perhaps signaling a stronger demand in places where car ownership is itself more expensive.

Wednesday, November 20, 2024 in Next City

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

White and purple sign for Slow Street in San Francisco, California with people crossing crosswalk.

San Francisco Suspends Traffic Calming Amidst Record Deaths

Citing “a challenging fiscal landscape,” the city will cease the program on the heels of 42 traffic deaths, including 24 pedestrians.

July 1, 2025 - KQED

Person in black clothing and helmet with red DoorDash box on back of electric bike on urban street.

DC to Launch E-Bike Delivery Pilot

The District will fund low-cost e-bikes and provide charging and battery swap stations for delivery workers to encourage e-bikes as an alternative to driving for food deliveries.

15 minutes ago - WUSA 9

Traffic jam on 5th Avenue in Manhattan, New York City with One World Trade Center tower under construction visible in background.

NYC Congestion Pricing: Still Working

10 million fewer vehicles entered the congestion pricing zone in the first six months of the program than last year, while pedestrian fatalities are at ‘historic lows.’

1 hour ago - New York 1

Google street view image of strip mall in suburban Duncanville, Texas.

Adaptive Reuse Will Create Housing in a Suburban Texas Strip Mall

A developer is reimagining a strip mall property as a mixed-use complex with housing and retail.

July 6 - Parking Reform Network