General Motors (NYSE:GM)
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6 Months : From Apr 2019 to Oct 2019
By Mike Colias
General Motors Co. said it will wind down its Maven car-sharing service in eight of its 17 North-American cities, becoming the latest car maker to face challenges in expanding into new transportation ventures.
Maven plans to terminate its business in major markets such as Chicago and Boston within the next few months, said a GM spokeswoman, who declined to provide a full list of closures. The service, launched in 2016, will continue to operate in Los Angeles, Washington, D.C., Detroit, Toronto and other cities, she added.
"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 eight markets.
An email sent to one Maven customer in Chicago said the service would wind down there by July 26.
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 also view as a long-term threat to car ownership.
The move comes as Uber Technologies Inc. -- a ride-hailing firm that served as a model for many car makers trying new transportation avenues -- is facing its own difficulties. Its has continued to post steep losses and its stock has slumped following its IPO earlier this month.
GM, like other car makers, also has been testing other 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.
Maven lets customers in urban areas 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. GM also operates Maven in Australia.
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.
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 grow them.
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 19:11 ET (23:11 GMT)
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