Car2go Upgrades Smart Car Fleet to Mercedes-Benz Vehicles

author: Michael Cheng   

Car2go is known for its massive fleet of tiny smart cars. The Daimler-owned business offers Smart Fortwo vehicles for car-sharing services in various cities around the US.

Recently, the startup announced it will gradually phase out the compact fleet, trading the cars in for Mercedes-Benz CLA and GLA vehicles. Car2go slowly started the phase out a few months ago. In Austin, the business already swapped out over 300 units for the luxury sedans. It is important to consider that Daimler is also the owner of Mercedes-Benz.

Fleet Upgrade in the Works

In Seattle, the transition is almost complete. Earlier this year, Car2go managed a fleet of 750 smart cars in the area. At the moment, 550 of those units have been switched out. According to the startup, the big move should be finished by the end of this year.

Competition in the urban location is very competitive, which likely contributed to the decision for the fleet overhaul. In the area, ReachNow also offers similar transportation services, with an impressive fleet of BMW cars and MINI Coopers. The city happens to be Car2go's largest market in the country, with over 100,000 customers residing in the location. The business first opened operations in Seattle in 2013.

"We'd love to continue to offer a smart or similar size vehicle again if and when that becomes an option once more," said a Car2go spokesman.

Interestingly, Car2go will maintain its membership fee after the transition. However, the new Mercedes-Benz fleet comes with a higher per-minute rate than the compact smart vehicles. The startup's operations in Denver, Colorado will also receive the upgrade.

Challenges in North America EV Market

Car2Go's strategy strongly revolves around EVs and compact cars. Unfortunately, both elements are having a difficult time thriving in the North American market. Starting with EVs, it seems that the US is creating barriers for adoption, through a recent proposal to remove federal tax credits, amounting to $7,500, for EV purchases. Some senators have spoken out to reassure individuals about preserving the incentive.

The current tax credit scheme for EVs is capped at 200,000 units per manufacturer. Surprisingly, even with lax distribution guidelines, no establishment in the auto industry has maxed out the quota in the country.  

"Car2go does operate three successful EV fleets in Europe (Amsterdam, Madrid, and Stuttgart) but they're successful because those cities have infrastructure necessary to operate EV carshare at scale," explained a Car2go official.

"We believe that electric is the future, and when conditions evolve in North American cities we'd be glad to revisit EV carshare in the US and Canada."

As for compact cars, the vehicles are widely popular in populated European and Asian cities. The units, including the Smart Fortwo, allow drivers to execute tight maneuvers around curbs, alleyways and parking lots. Furthermore, due to their small size, drivers can park perpendicularly, with the back of the car facing the sidewalk and the front of the vehicle facing the road.

While tolerated in other countries, US-based law enforcement groups discourage such parking positions. 

Michael Cheng

Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.