GM Scales Back Maven Ride-Sharing Business-2nd Update
May 20 2019 - 5:47PM
Dow Jones News
By Mike Colias
General Motors Co. plans to wind down its Maven car-sharing
service in more than a half-dozen cities, the latest car company to
encounter challenges as it works to expand new transportation
ventures.
Maven, a car-sharing brand launched in 2016 by GM, will end
service in seven of the 17 North American cities it currently
operates in within the next few months, a GM spokeswoman said.
The cities where it plans to terminate business include major
markets, such as Chicago and Boston. Maven will continue to operate
in Los Angeles, Washington, D.C., Detroit, Toronto and other
cities, she said, declining to provide a full list of closures.
"We're shifting Maven's offerings to concentrate on markets in
which we have the strongest current demand and growth potential,"
the company said in a statement. GM declined to elaborate on the
specific reasons why it was ending service in the seven
markets.
An email sent to one Maven customer in Chicago said the service
would wind down there by July 26.
The move comes as Uber Technologies Inc. -- a ride-hailing firm
that served as a model for many car makers trying to diversify into
new transportation ventures -- has continued to post sharp losses
and its stock has slumped following its IPO earlier this month.
In January, Maven chief Julia Steyn left GM after leading the
division since its inception. GM didn't give a reason for her
departure. Ms. Steyn, a former Goldman Sachs and Alcoa executive,
didn't reply to requests for comment.
Like other car makers, GM has been testing new services that
allow people to get around without owing a car, including a plan to
launch a ride-hailing business powered by self-driving taxis by the
end of this year.
With Maven, GM is hoping to respond to the proliferation of
app-based transportation services that have become popular in
today's economy, which many auto executives view as a long-term
threat to car ownership.
Maven lets customers in urban areas to rent cars on a short-term
basis using an app on their smartphone. The brand also provides
short-term vehicle rentals to Uber Technologies Inc. and Lyft Inc.
drivers for their ride-hailing operations. Private car owners can
also use the Maven app to rent out their vehicles to other
individuals.
The car-sharing business, while around for many years, is still
tiny compared to the ride-hailing industry, according to
consultancy AlixPartners LLP. Car-sharing generated an estimated $2
billion in global revenue in 2016 and is forecast to grow to $5
billion by 2030, the firm said. Ride-hailing generated $36 billion
in 2016 and is set to grow to nearly $300 billion annually by 2030,
the consultancy said.
Other traditional auto makers have scaled back or scrapped
similar services in recent years after struggling to scale them
up.
In January, Ford Motor Co. pulled the plug on Chariot, a
private-shuttle service it purchased several years ago in a push to
diversify beyond its core car-manufacturing business. Chariot
operated van fleets in San Francisco, New York and Austin, Texas,
but struggled to expand beyond a fixed, bus-like route and was
losing money, according to people familiar with the matter.
Several other car makers, including GM's Cadillac brand, have
dabbled in subscription services for cars that let customers pay
one monthly fee to swap in and out of models. But some car
executives have said the business model is a logistical challenge
and difficult to grow.
Cadillac canceled its subscription business late last year but
plans to relaunch the services after making adjustments.
Austen Hufford contributed to this article.
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
May 20, 2019 17:32 ET (21:32 GMT)
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