Ride-hailing pioneer Uber is shutting down its Australian-based ride-sharing service, just two and a half years after acquiring the business for $105 million.
UPDATE, 1:10 p.m. August 22: Uber Carshare has now confirmed to car owners using its service that it will shut down on September 12 in Australia and September 11 in the US and Canada.
Our original article, published at 9:30 a.m., has been revised to reflect Uber Carshare’s confirmation of the service’s demise.
In an email to owners using the platform, Uber Carshare said it would be shutting down due to external factors affecting its business model.
“Due to rising costs and operational challenges related to insurance, theft and vehicle repairs, we are making changes to our business model.
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“We are shifting our focus from peer-to-peer car sharing to partnering with car rental companies at scale through products like Uber Rent.”
Uber Carshare is born in December 2022 after the US ride-sharing pioneer acquired Australian startup Car Next Door in January of the same year for $105 million, initially focusing only on operations in Australia although there were plans to bring the product to North America.
The company’s business model is shaped like Airbnb for cars, allowing owners to rent out their vehicles to app users – theoretically reducing the number of cars that are owned outright and used only when needed.
“Combining our ride-sharing service with Uber’s range of mobility options means Australians now have access to better transport – whether they’re catching a ride-share for a night out or borrowing a local van to move house,” Uber ANZ general manager Dom Taylor said in December 2022.
An email sent to Uber Carshare owners, dated August 8, said the company would strengthen its anti-theft and anti-damage policies, end its referral program on August 30, and reassured owners that the winter slump in bookings would soon be resolved.
The email to car owners reads: “The winter months are always slow seasons for the car rental market.”
“The drop in income you may experience during the winter months is largely due to the seasonality of the rental market in general and based on historical trends, trip volumes start to pick up again from September onwards.”
Competitors to car-sharing platform Uber in Australia include US-based Turo and locally developed Drive Mate, while there are also a number of subscription services such as GoGet that own the cars they deliver.
The closure of Uber Carshare will not affect Uber Rent, the company’s new venture that partners with traditional car rental brands Thrifty, Budget and Hertz in Australia and New Zealand.
Uber Rent allows users to rent cars through established businesses, including Uber Carshare owners, if they don’t have their own car.
Earlier this yearUber Carshare has enlisted Formula 1 star – and Australian recruit – Valtteri Bottas to promote its product, while also allowing the public to rent out the Finnish driver’s “second Australian car”, a Holden Commodore pick-up truck.
THAN: Uber renames Car Next Door, prepares to take Australian business global
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