In a push to capitalize on its fastest growing North American market, Daimler-owned car-sharing service car2go just added Mercedes-Benz CLAs to its New York City fleet.
Twenty new CLAs are joining car2go's tiny 550 smart fourtwo vehicles in the Big Apple, its second-largest market. Car2go grew by 70 percent year over year in the city, where it has operated for three years.
"Transitioning to Mercedes-Benz in previous cities has gone very well, as the usage is two to three times that of the smarts," regional director Josh Moskowitz told CNBC.
The NYC upgrade comes as car2Go tries to build momentum in the U.S., after several setbacks during the past five years.
"Two cities that I oversaw — Minneapolis-Saint Paul and San Diego — we closed operations," Moskowitz said. "We were, and still are, pioneers in this space, and along the way we've learned which cities can successfully support car sharing."
As a wholly owned subsidiary of Daimler, the company's profitability is kept under wraps. Car2go declined to disclose its financial information.
Car2go is the world's largest car-sharing service by both members and vehicles, beating out Avis Budget Group-owned competitor Zipcar. Paul DeLong, president of car2go North America, said the slower development compared with Europe is "in a nutshell" due to countries overseas being "generally more progressive when it comes to mobility policy."
"We are in advanced discussions with several major North American cities," DeLong said, noting car2go plans to open in additional North American locations next year.
The company would not confirm further details. However, car2go did point to six major U.S. cities it does not have operations: Chicago, Los Angeles, San Francisco, Boston and Philadelphia.
Moskowitz said the company considers several criteria before launching a fleet — especially measurements of population density, total population, alternative transportation options and major destination points.
"Car2go works where vehicle ownership is very low, where people don't own or have only one car but still need access," Moskowitz said. "We're seeing people starting families and wanting to live near the urban core but don't need a vehicle. Car2go fills that void."
Car2go will take a gradual approach as it introduces the CLAs, and eventually GLAs, into the NYC fleet. The prime example, Moskowitz said, is Washington, where car2go introduced the Mercedes earlier this year.
"Initially we only had 50 in the fleet, as we wanted to take time to measure members' reactions," Moskowitz said. Now the fleet is more than three times that, with 180 Mercedes-Benz vehicles.
Members of the service either pay by the minute or purchase hourly packages, using a smartphone to find, reserve and rent nearby cars. Registration requires a valid driver's license and a credit card. While there is a registration fee of $5, car2go gives new drivers $10 of free drive time. The smarts cost 41 cents per minute while the Mercedes cost 47 cents per minute.
A vehicle rental is ended by finding legal, unmetered parking in the home area — which is currently limited to Brooklyn and Queens. Car2go does not have plans to expand that home area because the company "wants to ensure we provide reliable service," Moskowitz said.
The Daimler subsidiary also has a "good, solid relationship" with the city's Transportation Department, according to Moskowitz. But parking still remains one of the sticklers for expansion, especially when it comes to providing airport access. While cities like Austin, Texas, and Seattle have car2go airport parking, the company has not been able to negotiate access at New York's LaGuardia or Kennedy airports.
"It's been a huge hit" in other cities, Moskowitz said. "Airport access is something we need to dust off and take another look at."