After Minneapolis, Car2Go now wants to downsize service in Denver
Earlier this week we reported how Daimler's Car2Go was hoping to downsize its service in lower-income areas of Minneapolis, to focus more on building up service in more profitable parts of town. Now it seems they are hoping to do the same thing in Denver, which would result in more than 8,050 Car2Go members in Denver neighbourhoods that have few transit options being dropped from Car2Go's coverage area. However, it remains to be seen if they will be allowed to carry out either of these service reductions because in Seattle, where the company has more than 69,000 members, the City Council passed an ordinance requiring the company to service all areas of the city.
More than 8,050 Denver-area Car2Go members — many of them in some of Denver’s lowest-income neighborhoods with decreased access to transit options — are being dropped from the car-sharing service’s coverage area Sept. 14.

The car-sharing service says the decision is based on user data and member feedback and is a necessary business move to better serve the majority of its Denver customers.

Car2Go notified its customers in an e-mail Wednesday that it is consolidating its “home area” — the area in which users can pick up or drop off a car — into the city’s core. That will eliminate neighborhoods including North Park Hill, West Colfax, Globeville and many others.

The decision was made based on “extensive market research,” including what Car2Go spokeswoman Dacyl Armendariz said is a common complaint: the unavailability of cars. “These evaluations are absolutely critical to our overall growth and sustainability of our business, and this was not an easy decision for us,” she said.

The areas that will lose service account for only 14 percent of the company’s overall usage in the metro area, Armendariz said.

Frequent Car2Go user John G. Ronquillo, an assistant professor at the University of Colorado Denver, said the notification that his southeast Aurora neighborhood was being eliminated was “quite a shock.” He said his household downsized to one car to be more environmentally friendly — one of the points Car2Go uses to tout its service.

Ronquillo said he understands businesses make tough decisions. He also said he wonders whether Car2Go is missing the big picture in a rapidly changing urban area with underserved transit areas and many residents being driven out of the city core because of higher rents.

“I feel Car2Go has a really keen opportunity … to equalize people of different socioeconomic statuses and transit needs,” he said. “Mechanisms like car sharing or B-cycle are such great equalizers. Having these transit options are key to really building a truly vibrant community.”

Car2Go has 350 cars for its more than 35,000 Denver members, according to the company. Comparably, Brooklyn, N.Y., has 450 cars for its about 32,000 members, and Portland, Ore., has 530 cars serving about 37,000 members.

This isn’t the first time Car2Go has faced issues with changing service areas. In Seattle, where the company has more than 69,000 members, the City Council passed an ordinance requiring the company to service all areas of the city.

This, the council said, would ensure social equity after concerns that “the floating rental services catered only to richer, whiter markets,” the Seattle Times reported in March.

“It might be a wise policy decision … if Car2Go is going to do business with the city, that they’re required to do business with the entire area,” said Matt Lanphier, 31, a Northeast Park Hill resident and frequent Car2Go user whose neighborhood was eliminated. “I certainly understand business decisions, but it just seems it might be inequitable the way they’ve done it.”

Denver offers a special permit to car-sharing services that allows members expanded free parking, including meters. Car2Go holds 350 permits, which adds $297,500 to the city’s coffers, the city says.

Public Works spokeswoman Nancy Kuhn said she is not concerned about the potential in decreased revenue, and the permits have no stipulation that the company has to keep the permits active for a certain amount of time.

The company also has 10 dedicated Car2Go parking spaces — at some RTD stations, Red Rocks and Dick’s Sporting Goods Park — bringing the city $250 to $750 each per year.

Those spots still will be available, Armendariz said, as will Car2Go’s spots at Belmar in Lakewood.

Car2Go says it hopes to return to some of the affected areas as the city grows — a decision that Ronquillo said makes sense.

“I hope as they move forward that will they will take as much consideration as they claim to have made this decision with and re-evaluate,” he said. “It may have been a data-based decision, but my opinion is that only the numbers that had dollar signs in front of them were the ones they made that decision with.”

Armendariz repeatedly refused to say whether Car2Go made any attempt prior to the reduction in service area to increase usage in the eliminated areas. She said the company “marketed to the Denver area.”

That leaves fewer options for members like Lanphier. He said he likely will use Lyft from now because it costs about the same as Car2Go and he would rather spend locally.

“The beneficiary of my money is a little closer to me, rather than someone out there in the ether, wherever Car2Go is located,” he said.