Car2go suspending Twin Cities service at year's end

A Car2Go sits outside St. Paul City Hall
A Car2Go sits outside St. Paul City Hall.
Peter Cox | MPR News 2014 file

The car-sharing service Car2Go announced Friday that it will suspend operations in the Twin Cities.

Car2Go members received an email from the company shortly before 3 p.m. saying that the final day of service will be Dec. 31.

The company decided to suspend service in the Twin Cities because of high taxes on rental cars in the state, Car2Go spokeswoman Blaire Kniffin said in an emailed statement.

"That has made the Twin Cities one of the most expensive places in North America to operate our service and still be able to offer affordable pricing to our Twin Cities members," she said.

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Minnesota's combined taxes on rental cars amount to slightly more than 21 percent. Rental companies can keep 5 percent of that and use the money to pay for license tabs.

Kniffin said the company hopes to "one day resume operations here as taxation policy evolves" and more people embrace car-sharing.

The little white and blue cars that were operated by the company, which is owned by Daimler, have been a common sight in the Twin Cities since launching in Minneapolis in 2013 and St. Paul the next year.

But it's repeatedly scaled back its service area in the region. It also suspended service in Miami and Miami Beach earlier this year.