Car2Go suspending business indefinitely in Miami, Miami Beach
Blaming low ridership and state taxes, car-sharing service Car2go announced Thursday it will pull its fleet of 300 two-seaters out of Miami and Miami Beach on March 1.
The company’s withdrawal from South Florida won’t entirely leave its 32,000 area members in the lurch, since other car-sharing companies operate in Miami-Dade. But the exodus of the first car-sharing service to make a major commitment to South Florida represents a blow to the region’s burgeoning efforts to expand transit options and wean drivers off the personal automobile.
In an email to members, the company described its decision as a suspension. A car2go spokesman said Thursday that the company hopes to return, but made no guarantees. It’s possible executives are waiting to see if the state will waive a $1 rental-car tax levied on car2go users every day that they use the service.
“While we believe Miami can benefit greatly from a service like car2go, Florida’s rental-car tax doesn’t reflect the innovation we bring to the rental-car sector, making Miami one of the most expensive cities in North America for one-way carsharing,” members were told in Thursday’s email. “This, in part, has contributed to a slower adoption of our service in Miami compared to other car2go cities.”
Members will be able to hop into one of the company’s many blue and white Smart cars until Feb. 29, and after that will still be able to use the service when traveling outside of Florida. Miami officials said Thursday they’ve been told car2go hopes to redesign its business model in Miami and return, possibly with more options than just the tiny Smart cars available today.
“We're obviously disappointed to suspend our service in Miami,” said car2go spokesman Brad Ducey.
The company, a subsidiary of German corporation Daimler, offers an app-based service that allows members to pick up the cars off the street and drive with a swipe of a special card, paying 41 cents per minute. Car2go brought its first 250 blue-and-white buggies to Miami in 2012 and expanded into Miami Beach in October.
At the time, the service was, for Miami, a forward-thinking initiative. But, in the years since, other car-sharing programs have set up shop, and ride-hailing like Uber and Lyft have grown popular in Miami-Dade County, offering greater competition. The company is also still grappling with a civil suit stemming from a 2013 incident in which a drunk car2go driver T-boned a pickup truck, killing her passenger.
“A dollar a day tax has caused them not to continue their business? That's interesting. That sounds like a really good excuse for a bad business model,” said Miami Beach Mayor Philip Levine.
Ducey said the tax doesn’t seem like much, but is the primary reason the company is leaving the market. He noted that car-sharing services exist in the company’s other markets as well.
“We're this new, innovative mobility option that's being taxed heavily, but this tax doesn't factor at all into ride-sharing” in Florida, he said.
Art Noriega, the executive director of the Miami Parking Authority, the agency that first brought car2go to Miami in 2012, said he’d heard they would stop their business in Miami. But he said he “wasn't under the impression that drop-dead they were pulling out.”
“They're going to certainly make a strong effort [to return]. I think what determines that is their leadership in Germany,” he said. “Our arms are going to be wide open to get them back.”
This story was originally published January 21, 2016 at 8:16 PM with the headline "Car2Go suspending business indefinitely in Miami, Miami Beach."