DETROIT -- General Motors' app-based car-sharing service known as Maven is exiting some markets after nearly three years of expansion.
Maven's move to leave or reduce its services in some of the 24 markets it's in globally started earlier in May and will take a few months to complete.
"This is not an announcement, just the course of business," said Jordana Strosberg, Maven spokesman. "We want to give customers and members a heads-up and the right amount of time so people can be aware of when or if their reservations can be made or not."
The purpose behind the contraction is to shift "some of the offerings to focus on markets where we have the most current demands or growth potential," Strosberg said.
Maven, which started in Ann Arbor in 2016, is a car-sharing program that enables users to rent cars by the hour for as low as $9 for a Chevrolet Cruze compact. The cars also can be rented under the Maven Gig program for jobs such as Uber driving or meal delivery. It is focused on urban dwellers, offered in 24 cities in the United States, Canada and Australia.
In North America, Maven operates in 17 markets: Detroit; Ann Arbor, Mich.; Chicago; Washington, D.C.; Baltimore; New York; Jersey City, N.J.; San Francisco; San Diego; Los Angeles; Phoenix; Denver; Austin, Texas; Orlando, Fla.; Boston; and Kitchener-Waterloo, Ontario; and Toronto.
Strosberg declined to say how many or which markets will lose Maven services. She said Detroit is "a very important market focus, so Maven Gig and car sharing will remain here. There are still a number of markets where Maven will be available. "
Trade publication Automotive News reported that Maven will continue to operate in Los Angeles, but stop services in New York and Chicago. Seeking Alpha, an investor site, said operations will end in Chicago and Boston and keep running in Los Angeles, Washington, Detroit, Toronto and "other cities."
In some markets, GM is discontinuing all Maven services, Strosberg said. In others, it will offer selected services such as Maven Gig.
"It just started and will be happening over the next little while," said Strosberg.
The contraction comes on the heels of rapid expansion. Maven started in January 2016, then debuted Gig in January 2018 as it spread to numerous cities.
Last summer, it tested a peer-to-peer car sharing, dubbed Peer Cars, through the Maven app in Detroit, Ann Arbor and Chicago. Peer Cars allows those who own or lease a 2015 model or newer GM vehicle to list their cars on the Maven app for rent to others when the owners aren't using them. The owner keeps 60% of the revenue from renting the car; Maven gets the balance.
Maven also had a sudden leadership change this year.
Julia Steyn, a corporate star who came to GM in 2012 as head of mergers and acquisitions after stints with Goldman Sachs and Alcoa, left on Jan. 29. GM named Sigal Cordeiro to lead Maven in February.
According to Steyn's LinkedIn page, after leaving GM, she became founder and managing director of Adrigon Ventures LLC in New York from March until May. This month, she started as non-executive director of transportation services provider First Group PLC in London.
Maven's move out of some markets is not connected to the new leadership, Strosberg said. Rather, "Maven was one of GM's early startups, and we've been incubating, and Maven's shifted many times over the years.
GM has used Maven as an "opportunity to learn, test and pivot," Strosberg said. Changing some offerings in certain markets is a way to continue to test its products and business model and continue to "have partnerships in the communities where we are."
Analysts who follow ride-sharing, electrification and self-driving technology say automakers venture into alternative transportation businesses mostly to gather data to learn ways to make more money either through ride-sharing or making cars more to customers' preferences.
"They would like to expand and get new revenues," said Sam Abuelsamid, principal research analyst leading Navigant Research in Ann Arbor. "GM uses Maven as a model for different business models -- from the traditional ride-share program" to Maven Home for apartment buildings to have a car-share fleet so residents could have an alternative to car ownership, to Maven Gig and the peer service.
"The idea is to understand which of these businesses will work, where will they work and understand the pricing and how much are customers going to pay for this. And if we do this, can we build a viable and growing business?" said Abuelsamid.
In the first quarter, Ford Motor Co. stopped its shuttle service, Chariot, because it was losing money. Ford bought the company in 2016 for a reported $65 million but could not generate profits with it. Chariot was an app-based shuttle service that struggled with ridership. Its 14-seat commuter shuttle services ran limited, public routes in Austin, Chicago, Denver, Detroit, the San Francisco Bay area and in London.
Abuelsamid said Maven is likely not delivering profits either.
"All of these services are probably losing money at this stage," said Abuelsamid. "But if you look at it, at the overall business at GM, Maven is a tiny, tiny fraction."
The key is that Maven is using the data it gathers in each market, said Abuelsamid, to tailor offerings in specific cities.
"GM can collect data and then work with electric charging providers as to where are the best places to locate chargers in the future," he said. "They are probably collecting data about vehicle use and then feeding that into the product development process."
In that regard, he said, Maven is important to GM, but "by no means a big impact on their core business."
SundayMonday Business on 05/26/2019