Daimler Withdraws Car-Sharing Service From U.K. on Poor Demand

May 30, 2014 3:49 am ET

May 30 (Bloomberg) -- Daimler AG, the maker of the Smart city car, is withdrawing its car-sharing service from the U.K. because of a lack of demand from consumers.

“The unique challenges we encountered were more significant than expected,” the Stuttgart, Germany-based automaker said in statement on its website. “Taking the U.K.’s strong culture and tradition of private vehicle ownership into account, we have decided to withdraw from the U.K.”

The move marks the first time that Daimler is pulling Car2go from a country. The service started operating in parts of London in 2012 and extended to Birmingham last year. The program ends in the U.K. today.

Car manufacturers including Bayerische Motoren Werke AG have been ramping up city-based sharing programs offering rentals by the minute to appeal to drivers looking for an alternative to vehicle ownership. Car2go will continue to observe the U.K. market for “cultural changes toward the ‘free- floating model,’” Daimler said.

Car2Go, which operates with a fleet of two-person Smarts, is the world’s biggest car-sharing operator, available in 25 cities globally with over 700,000 customers. U.K. account holders will still be able to use Car2go in its 12 European cities, according to the statement.