It was only six months ago that the two car companies Mercedes and BMW pulled the ripcord in carsharing.

After years of unsuccessfully trying to build up a convincing business model, they handed over their shared provider, Sharenow, to the Opel parent company Stellantis, the world's fourth-largest automaker in terms of sales, which includes brands such as Fiat, Citroën, Peugeot and Maserati.

Christian Muessgens

Business correspondent in Hamburg.

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The next consolidation step is now pending in the market.

The Wolfsburg car group Volkswagen is selling its provider Weshare to Miles Mobility, a start-up that was founded in 2016 and has since grown to become one of the largest providers in Germany.

This will make “car sharing available to even more customers across the board,” said Christian Dahlheim, head of the VW finance division responsible for mobility services, in a conference call on Tuesday.

VW speaks of a "partnership" that will help to further advance its own "change to a mobility provider".

In fact, the step is also associated with the admission that the company's own goals for setting up a provider of fully electric, short-term bookable sharing fleets were too ambitious.

Actually, VW wanted to roll out the Weshare service globally within a few years.

So far, however, it has only started in Hamburg and Berlin, where the fleet together comprises around 2000 fully electric Volkswagen ID.3 and ID.4.

Weshare is not yet making any profits

Miles, on the other hand, is one of the major European providers alongside Sharenow with a fleet of more than 9,000 vehicles, the vast majority of which are combustion models.

The provider is currently active in Berlin, Bonn, Düsseldorf, Duisburg, Hamburg, Cologne, Munich and Potsdam.

Brussels and Ghent will also be added in autumn 2022.

The plan is now for the fleet to “develop further along with the electrification of the Volkswagen Group,” as Miles Managing Director Oliver Mackprang announces.

Even now, 70 percent of its own vehicles come from the VW Group.

Starting next year, another 10,000 cars will be purchased from the Wolfsburg company, gradually increasing the all-electric proportion in the fleet.

The companies did not comment on the purchase price for Weshare including the existing cars.

According to Miles, it is profitable, while Weshare continues to make losses, even if VW manager Dahlheim emphasizes that the minus is not as big as it was some time ago.

With Weshare, VW has succeeded in proving that fully electric car sharing is technically possible.

However, calculating the costs is difficult.

Due to the high demand for e-cars from private buyers, the vehicles are expensive for sharing providers, while customers of the services are not willing to pay a surcharge if they book an electric car via the app instead of a combustion engine.

Under these circumstances, profitable business is currently only possible with mixed fleets, such as those operated by Miles.

VW emphasizes that the sale to the partner does not mean exiting car sharing.

The Miles offer can be booked via its own platforms.

In addition, the company is also pursuing a strategy with the recently acquired car rental company Europcar that includes similar offers.

Another example is Vienna, where VW entered car sharing via Porsche Holding Salzburg.

The market is big enough and the partnership with Miles is not exclusive: "I don't think we'll step on each other's toes there."

Miles Managing Director Mackprang said he wanted to continue expanding his company, but he wasn't interested in covering as many cities as possible in a short period of time.

The priority is to consolidate the business where one is already active today.

Miles also works with various partners and will continue to do so.

Alliances were formed primarily with providers of local public transport, such as the HVV in Hamburg or the BVG in Berlin.

In addition, Freenow is one of the partners, a successor to the Hamburg call service Mytaxi.