Free-float Car Sharing Companies in Hungary and a Comparison to Germany

Abstract

Car-sharing companies’ key argument is the heavily advertised sustainability element in their operation, which can partially be confirmed; however, this study sheds light on the importance of the connection between sustainability reports and financial statements. In order to gain more confidence and provide objective support to voluntary sustainable reports, the key question is if it possible to reconcile these statements to their financial performance and their assets and liabilities. In light of recent market changes in Hungary and the expansion of German car-sharing companies, this is an increasingly important question. Additionally, the study also addresses the significant 2019 market change in Hungary after the penetration of the car-sharing service based in Germany. The reviewed sustainability reports contain insufficient information to be reconciled to financial statements. Additionally, the aspects related to sustainability are recognised through the parent entities’ books under environmental liabilities. Each of the reviewed companies considers itself as “the most sustainable entity” in the given segment, which raises serious doubts regarding the reliability of the information. From the perspectives of the basic analysis and profitability, the German companies reported better results than the Hungarian ones; besides, in Hungary, the service providers applied different fleet-financing models and used leases or purchase transactions. The reviewed car-sharing companies seem to operate on profit rather than a sustainability basis. Although these services do contribute to a more sustainable future, without proper alignment, the real impacts cannot be validated or traced back to the relevant financial statements. The lack of transparency, as an example of climate-related consequences, could have a significant effect on the companies’ performance, and this may be vital and relevant information for investors.