The current transformation of the automotive industry is going to affect both BMW and Daimler. The two German giants announced last year that they will be joining forces to offer alternative means of getting around in busy cities through five joint ventures. Now, a statement from the two companies says that one of those ventures, ShareNow, will be pulling out of five major US cities.
According to the report, the two companies are re-evaluating their mobility offerings in the US in an effort to cut costs to a minimum. The foundation of the ShareNow car rental offering cost the two German companies $1.1 billion in investments initially and now their efforts are being cut short. Beginning October 31, the operations of the ShareNow app will no longer have a presence in Austin, Texas; Calgary, Alberta; Portland, Oregon; and Denver. Chicago will follow starting December 31st.
“We have had to face the hard reality that despite our efforts, we underestimated the investment and resources that are truly necessary to make our service successful in these complex transportation markets amid a quickly-changing mobility landscape,” the company said in a statement.
“This decision was not made lightly,” the company added. For now, ShareNow will be focusing its efforts on other markets, with more success, such as New York, Washington, Montreal and Seattle.
This isn’t the first such exit from a car-sharing company so far. Other car makers had to make such drastic decisions earlier this year, in an effort to cut their losses. This includes subscription programs as well. Ford and Lincoln have bowed out of Canvas last month, while GM’s Maven brand left eight US cities in May, New York, Boston and Chicago being among them.