The diffusion of carsharing in cities can potentially support the transition towards a sustainable mobility system and help build a circular economy. Since urban transportation is a complex system due to the involvement of various stakeholders, including travelers, suppliers, manufacturers, and the government, a holistic approach based on systems thinking is essential to capture this complexity and its causalities. In this regard, the current research aims at identifying cause-and-effect relationships in the diffusion of carsharing services within the urban transport systems. To do so, a causal loop diagram (CLD) is developed to identify and capture the causalities of carsharing adoption. On this basis, the main four players within the carsharing domain in urban transportation were scrutinized and their causes and effects were visualized, including (i) the characteristics, behavior, and dynamics of the society population; (ii) transportation system and urban planning; (iii) the car manufacturing industry; and (iv) environmental pollution. The developed CLD can support decision-makers in the field of urban transport to gain a holistic and systemic approach to analyzing the issues within the transport sector due to their complexity. Moreover, they can help regulators and policymakers in intensifying the diffusion of more sustainable modes of transport by highlighting the role of population, car manufacturing, the transportation system, and environmental pollution.