Does The Twin Cities Have Too Many Car-Sharing Services?

Does The Twin Cities Have Too Many Car-Sharing Services?

The market is increasingly crowded by both local and national brands.

When St. Paul-based Hourcar debuted in the Twin Cities in 2005, there was no buzz yet about car-sharing. But local traffic has been steadily accelerating. Today there are five car-sharing operations in the metro; the latest entrant, a local startup, hit the gas in December.

The arrival of new competitors has not slowed the operation, says Megan Hansen, Hourcar’s program manager, who notes, “We’ve seen growth overall.” Hourcar is operated by the Neighborhood Energy Connection, a nonprofit. Hourcar’s fleet has grown from a dozen vehicles to 65 cars today.

But three national and global players have hit some potholes.

The seemingly ubiquitous car2go took 16 percent of its distinctive pod-like vehicles off the streets in March, paring back from 535 to 450 automobiles. The company began local service in October 2013. Josh Johnson, general manager for car2go Twin Cities, says low-traffic locations were cut, but notes, “We’re the leader here in the Twin Cities and worldwide in one-way car-sharing.”

Other services have fixed stations where cars are picked up and left; a car2go vehicle can be parked just about anywhere.

Zipcar started here in 2005 serving the University of Minnesota campus. It opened a local office and began serving the general public in March 2013. But Zipcar lost its university contract to Hourcar in 2013. Zipcar bills itself as the world’s largest car-sharing service, with more than 500 global locations and over 950,000 members, but in the Twin Cities, Zipcar has only 30 vehicles on the street, fewer than Hourcar or car2go.

Brian Harvey, market manager for Zipcar Minneapolis, says that many U.S. cities have only one, possibly two, car-sharing services. “The Twin Cities is somewhat unique.”

Zipcar is owned by New Jersey-based car rental kingpins Avis Budget Group Inc. Car2go is owned by Germany-based auto manufacturer Daimler, which makes its micro-cars.

Enterprise Rent-A-Car parent Enterprise Holdings offers Enterprise CarShare on several local college campuses, but it pulled the plug on retail service last year. Minneapolis-based REVL pulled into traffic in December, rolling out an upscale car-sharing program with Mercedes-Benz and Tesla vehicles.

“We’re a luxury lifestyle product,” says co-founder Dan Hobbs, who reports that REVL has 15 cars primarily in downtown Minneapolis. Monthly rates start at $200. Hobbs says he feels more kinship than competition with Hourcar. “Hourcar is very local to Minneapolis,” says Hobbs. “I respect them a lot. We don’t step on their toes.”