Dive Brief:

• Car-sharing business ReachNow announced it is ceasing operations, exactly one year after it added ride-hailing services. ReachNow operated in Seattle and Portland, OR, and was operating in Brooklyn, NY for about 18 months before leaving that market last year.
• A company blog post says the parent REACH NOW arm will "now focus on building a multimodal platform and will no longer operate car sharing and ride hailing services" due to a realignment of the five joint venture mobility companies that BMW Group and Daimler AG announced earlier this year.
• ReachNow will close its offices in Seattle and Portland in the next few months and lay off half of its 75 employees, according to the Puget Sound Business Journal.

Dive Insight:

Some customers received an email in May announcing the cancellation of ReachNow's ride-hailing services, according to The Seattle Times. But this immediate ending of all services comes as a surprise to some. Just last month, the REACH NOW joint venture arm announced a partnership with ParkMobile to work on solutions to provide customers with more seamless mobility experiences for parking, transit and multimodal transportation. 

The news about the ReachNow car-sharing and ride-hailing service cessation does not affect the other REACH NOW (formerly moovel) businesses, the company clarified in its blog. The REACH NOW group will work with city partners to improve public transit accessibility. The changes also will not affect the car2go car-sharing business, previously owned by Daimler and now falling under the SHARE NOW venture mobility company.

The blog post says the realignment will allow REACH NOW to move faster with its efforts and SHARE NOW will become the only car-sharing operator in the YOUR NOW family.

ReachNow noted that it served more than 100,000 customers in its three locations over the past three years. Customers who enrolled in the program after June 1 will be refunded their $15 sign-up fee. 

The business closure illustrates the difficulty of sustaining a successful urban mobility business in a rapidly changing market with an abundance of competitors. ReachNow touted itself as unique because it was the first app-based business to offer car-sharing and ride-hailing. Diversifying company services by expanding into a new area often can boost business — at least temporarily — but ReachNow had fierce competitors on both sides of the business.

Trying to compete with ride-hailing giants like Uber and Lyft and gain enough market share to sustain the business proved challenging, even for a business backed by the well-established BMW Group and Daimler AG.

Operating businesses in urban areas that are solely car-based could present more difficulties in the coming years than in the past. With cities pushing strategies to reduce the number of vehicles on the road, and a plethora of new mobility options emerging, customers have more options than ever before and don't need to rely as heavily on cars for transportation.

In the past two years, vehicle-centric mobility businesses such as Uber and Lyft have quickly and extensively diversified their services through acquisitions and partnerships to include bike-share, scooter-share and transit deals.