How A Rental App Lost Control Of Its Cars

In a bid to expand, Car2Go eased background checks. The Mercedes thieves were ready.

- Joshua Brustein

April 15, a Monday, should have been sleepy this year for the Chicago team at Car2Go, a car-sharing service that automaker Daimler AG introduced more than a decade ago. Weekdays were generally slow, and Chicago’s streets were slushy the day after an unusual late-season winter storm. Who wants to deal with a rental car in the snow?

On that day, apparently, a lot of people did. There was a spike in rentals for Car2Go’s higher-end cars, Mercedes CLA sedans and GLA sport utility vehicles. And these rentals lasted much longer than Car2Go’s average 90-minute ride—in fact, many of the Benzes weren’t being returned at all. Instead, employees at Car2Go headquarters in Austin watched on a digital map as dozens of their vehicles congregated on a few blocks in West Chicago, in a neighborhood right outside the company’s coverage area.

Car2Go sent several workers to retrieve the vehicles, only to find that a group of thieves had claimed them as their own. Some blocked the vehicles in to prevent repossession; others threatened the company’s employees, according to someone with knowledge of the situation who spoke on condition of anonymity. Car2Go has the ability to remotely disable vehicles, but the confusing situation made it tough to know which ones to target in time to do much good. Previously unreported accounts of the few days that followed from people with knowledge of the thefts, along with police reports and contemporary social media posts, offer a surreal lesson in the risks of businesses built on smartphone-enabled car-sharing. “This was a unicorn incident for us as a company,” says Kendell Kelton, a Car2Go spokeswoman. “We’ve never seen this type of fraudulent activity at this scale ever, ever.”