Thursday, December 24, 2015

Los Angeles Thinks Big!

One of the lessons I learned from watching the growth of bikesharing was the importance of thinking big.  At the time, bikesharing was already happening in several cities in France but Paris took it a whole new level - really big time - and in a city that wasn't particularly hospitable to bikes!

I suggest the "think big" approach to many of the start up carsharing clients I work with because starting cautiously often means that investors won't take you seriously when you come back for round 2, that local government partners don't believe you will have a noticeable impact on city transportation patterns and customers may think of you won't be around in a year or 2.

The City of Los Angeles and Shared Use Mobility Center weren't my clients but I've got to hand it to them - the long-awaited RFQ from the City of Los Angeles shows just how big they're thinking: $1 million in incentives including $600,000 for startup expenses to the carsharing company, almost $500,000 for marketing and outreach expenses.

The city's goal is 110 EVs, plug in hybrids (and even fuel cell vehicles) into a carsharing fleet - at least 80 must be battery EVs.  (I'll save you the trouble - that's $9,000 per carshare vehicle over 3 years.)   The city will provide 150 on-street charging stations, including some of the new street light pole chargers (it's unclear if any will be level 3 stations).

The service area is in specified neighborhoods (identified in the RFQ) that have a high percentage of low income households and affordable housing projects.  The project envisions, 7,000 members and removing 1,000 vehicles from the road by the end of the 3 year period.  It's part of the city's Sustainable City pLAn.

Even with all that money, it isn't going to be easy to get to hit the 7,000 member target, even after 3 years.  Here's why:
  • In spite of the financial advantages that carsharing can offer, getting low(er)-income households to use carsharing has always been a challenge.  Many households do need drive every day, making carsharing less attractive as an alternative.  (And don't forget, even though these households may be spending a big percentage of their income on transportation, car ownership is  is still cheap in the USA - the real affordability issue is that wages haven't kept up.)
  • EVs themselves present challenges, for users the range limitations (or perception of) can be a deterrent, and for the carsharing operator EVs in carshare fleets have been shown to increased management requirements (to insure customers only get vehicles with sufficient battery capacity for their trip).
  • Los Angeles has traditionally been a challenge for carsharing companies.  In spite of having an amazing transit system, it's still a driving city.  (Even though Flexcar was once running more than a 100 vehicles in LA, Zipcar declined to continue the service when they took over Flexcar and has gradually reentered the market.) 
But there's reason for optimism, too.

  1. LA isn't the same place it was 10 years ago - with increasing population densities (good for carsharing) and increasing gridlock (also good for carsharing when it motivates people to consider transportation alternatives).
  2. Public transportation in LA has evolved considerably from during that period, with new light rail lines covering the city.
  3. EVs aren't what they used to be (even 5 years ago) - 100+ mile range is the new norm on the next generation of most EVs (and the 20% of fleet that can be plug in hybrid provides a good option for longer trips).
  4. Carsharing isn't what it was 10 years ago!  We know a lot more about marketing carsharing and we know a lot more about running a lean company, especially now that the major carsharing companies are owned by the big boys (and girls) in the auto world.
  5. And finally, LA is coordinating this effort with the parallel implementation of their long-studied Integrated Mobility Hubs concept, proposing that many vehicles should be located at the several multi-modal transfer points located in the proposed area.  These will include bicycle and bike share facilities to finally provide the kind of first-last mile connectivity planners have dreamed of.  And, the RFQ also mentioned possible interface between the carshare operation and transit payment cards.

I expect the usual suspects - Zipcar and Enterprise - will likely respond to this RFQ (due Feb. 5). At the present time, Zipcar has about 100 vehicles in the LA area, many at universities, so they're a natural. And there are some other possible applicants, including Alliance Autogroup.  And it certainly wouldn't surprise me to see Ford and GM respond, as well.  No, I don't expect to see any Teslas in this fleet, but who knows?

Finally, I want to compliment the City for issuing an RFQ that's a model for specifying what you want but not telling companies how to do their job.  (Well, except for the part that the Advisory Committee will oversee marketing and street teams.)  And also for at least mentioning the issue that the contractor must provide usage data to the city planners.  (There is one thing I would have done differently: not specify the final number of cars you want to see at the project conclusion, even a minimum number - let the proposers tell you how many they're shooting for, and then fix that number in the final contract.)

Might there have been a better way to spend a million bucks promoting carsharing and affordable mobility in LA?  Perhaps.  But the decision has been made, it's well thought out and could make a difference.  I say, best of luck, LA!

Friday, October 23, 2015

Private Carsharing for Apartments and Condos

I recently got a question from a developer who wanted to offer carsharing to the residents of a building.  It's a great idea - offer carsharing as an amenity for the residents - making the pitch "your apartment comes with a car".

It's quite possible to do "in house" (literally) carsharing.  But unless you are willing to consider a pretty low tech approach, the set up costs of the software and installing the technology in the vehicles only a couple of vehicles can be a deterrent. 

One option to consider for only a couple of vehicles would be to contact any carshare companies operating in your city to find out what they would require to place vehicles in your building. They may suggest a "guaranteed monthly minimum" program, where you make up the difference between the revenues generated by users and the minimum amount - typically between $1,500 and $2,000 per vehicle per month, depending on the type vehicles that are placed.  The provider handles all aspects - placing the vehicles, maintenance, cleaning, etc. As with any carshare, drivers are responsible for filling the gas tank whenever it drops below 1/4 (using a fleet gas card), or plugging in a EV when they return it.  This guaranteed monthly minimum gives the building owner real incentive to promote the option to residents in order to reduce the monthly subsidy.

Example of a publicly accessible garage allowing
vehicles to be used by both residents and other
carsharing members.
If the building is located in the area where the carshare company has other vehicles, this further increases the attractiveness to your residents as there would be other vehicles nearby to choose from if the vehicles in the building were checked out, such as often happens on weekends.  

A consideration for condominiums is what's in the condominium agreement.  I've never seen one that allowed strangers (such as other carsharing members) access to a private garage.  And unless it's very early in the development process there's almost invariably one resident who will object.


Cell phone signals (needed for the on-board telematics unit
in each car rarely work in underground garages.
How the building's parking area is set up is a major consideration: if your parking area is behind a locked gate, the carshare vehicle is exclusively for the use of your residents.  If the garage is NOT behind a locked gate then you may have the option to allow other carshare members you may be able to set up the system so that only your residents can reserve and use the vehicles in your building (as well as you other carshare vehicles outside).  What options are possible depend on the capabilities of the carshare providers software system.

The Harbor Steps Case Study

For a couple of years the 720 unit luxury Harbor Steps apartment building in Seattle (see picture above) offered every tenant 5 hours of free usage per month.  While this offer sounds like it could be very expensive, it wasn't, for 2 reasons.  

  • They made a bulk buy of hours from the local carsharing company, Flexcar, so they got the lowest usage rate possible
  • They figured out that a substantial number of tenants didn't actually use their 5 hours every month so they were only paying a fraction of what it would have cost them if every resident had used their full amount.
(Yes, they eventually discontinued the offer, apparently because they didn't need to offer the amenity to attract renters.)

Note to carshare operators: this arrangement was also very attractive to Flexcar since it brought them a bunch of new customers, and, for those who used a car, their trips were often longer than the 5 free hours per month that Harbor Steps was subsidizing, so Flexcar got additional revenue at the normal retail rate.  (Warning: something that Flexcar didn't anticipate was how difficult it was going to be to program their software to split the trip charges at different rates.  So don't try this until you've talked to your IT department!)

Note: Don't get me wrong, low tech approaches can work just fine - in the right setting. Mechanical lockboxes, web scheduling and on your honor paper tracking of trips was the way many small carshares got started in the 1990s and early 2000s.  It's more definitely not as secure and much more labor intensive (although possibly a residents committee would take on the management).  The real challenge would be finding appropriate insurance, which won't be easy since typical carshare insurance is a specialized fleet policy, not available from the usual personal auto insurers. Insurance for this kind of "informal" carsharing can be a big issue and should be the first task in setting up this kind of service.

Monday, July 06, 2015

Naming the Varieties of Carsharing

Readers of my blog and Twitter feed (@carsharing_us) know that I'm a bit obsessed with using the correct names for various types of mobility services.  This is my attempt to sort things out:

First, there's the distinction between car rental and carsharing:
  • Car rental - centralized locations; usually daily rental; but there have been examples of half-day and even hourly car rental; usually requires completing a new rental contract for each trip, fuel and insurance (beyond mandated minimums) not included in the rates;
  • Carsharing ("car club" in the UK) - distributed locations, close to users home and work; electronic system allows unattended access to the vehicle; gasoline and full coverage (not minimum) insurance is included in per hour or per minute rates.
However, the distinction between these two is increasing getting blurred as car rental companies install carsharing technology in vehicles to enable unattended car rental.  Some Round Trip carsharing services, such as Enterprise Carshare, do not provide full insurance coverage and some Peer to Peer services do not include fuel but require the user to fill up the tank no matter how little the vehicle was use (not very convenient).

Then there are all the variety of carsharing.  Right now, here's my preferred naming for various types of carsharing:
  • Round trip carsharing— "classic" carsharing, must have a reservation with beginning and end time; vehicle must be returned to its home station
    • Peer to Peer (P2P) - a variation of Round Trip carsharing, the primary difference being that private individuals own the fleet;
    • Fractional ownership - several people go in together and buy a vehicle and share the use of it; examples: Audi Unité in Sweden and Germany or GoMore Leasing in Denmark;
    • Informal - such as neighbors buying a pick up truck together; usually a variation of Fractional Ownership but may be as simple as repeated borrowing of your parents' or neighbors' vehicle; usually no technology is involved;
    • Business or company carsharing - company or government fleets with carsharing technology (telematics and online scheduling) to improve fleet utilization and cost effectiveness.
  • Flexible carsharing (my current preferred term) — one way/on demand services like Car2Go or Autolib'; these may be either: 
    • Free floating - cars park on the street in any legal parking space,  like most Car2Go cities or Enjoy in Italy; or
    • Station-based - cars can only park in designated garages, parking lots or at electric vehicle charging stations (Autolib' & Bolloré BlueIndy).*
This chart, from Julian Espiritu does a nice job of laying out a continuum of round trip car sharing options - from rental car to P2P carsharing.

You may ask, why is this important?  For the simple reason that governments are forming partnerships, and sometimes providing incentives for carsharing, sometimes on the basis of little or no information about what the public policy benefits of carsharing really are.  In other cases, claims have been made, by companies who know better, of benefits that either haven't actually been demonstrated or are based on information that applies to a different type of carsharing.

*note that Car2Go in Toronto does not offer floating parking on street but all trips must be ended in authorized parking garages - more than 300 within the Home area. station-based.  And in San Diego, and Amsterdam, even though the Car2Go fleet is 100% electric the vehicles do not have to be returned to charging stations, but the provides users as incentive if they do.

Monday, April 06, 2015

Is Car2Go Black the next chapter of carsharing?

(This was originally published in February 2014, but I've extensively updated it.)

From about day 2 after the initial launch in of Car2Go in Ulm, Germany people have been wondering if/when/whether Daimler would ever to include one of their larger vehicles in the car2go fleet?  Well, they did in February 2014 — Car2Go Black — in Berlin and Hamburg with 100 Mercedes B-Class vehicles.  Now it's got locations in 8 cities in Germany.

(The Men In Black juxtaposition is mine, not Daimler's.)

it appears they're doing it with the same flair and originality that marked the first Car2Go.  They could have easily and simply seeded a city fleet with 20-30 B-class sedans and let them float around the city and called it good, but they didn't.

Instead, it appears they've given a lot of thought about how to provide a flexible, convenient service.  They decided to place these "black" vehicles in several strategic locations around a city and let the customers come to them (I'm sure they're hoping it will be in a Car2Go Smart).  Black vehicles can be unlocked via RFID card of smartphone app.  The key is in the glove box, not on the dashboard as in the Smart cars.

Reservations are required and They system allows one-way trips between Car2go Black cities but the destination must be specified at the time of reservation.  Reservations can be made for up to 14 days, with trip start and ends in 15 minute increments.

Car2Go Black pricing (PDF) is a model of simplicity and seems competitive with the car rental service it is — (as of April 2015) 14.90 € per hour including 50 kilometers per trip with additional distance at 0.29 € per km. or 89€ per day, including 200 km/day and same price for additional km.  For cities with airport locations, there's a 4.90€ additional fee.  Locating, unlocking and billing will be through the Daimler Moovel app.


I think Daimler has come up with a very clever compliment to its original Smart Car2Go system.  And should be pretty efficient to operate, as well, given that it's basically a largely unattended car rental service.

They may not know it, but Car2Go has pretty much implemented mobility guru Dan Sturges' ideas of "near cars" (Car2Go Smart) and "far cars" (Car2Go Black) as a complete urban automobility solution.

And Car2Go Black already has a ready pool of thousands of existing customers signed up and in their system - credit cards and all!  From an OEM's point of view Car2Go Black could be to be a great way for Car2Go customers to try out the "move up" B-Class model, just in case they're is in the market for a new car! (I don't know about whether this was done in Europe, but Car2Go in the USA did a member promotion offering a discount on the purchase of a new Smart car a couple months ago.)

So, around town, Car2Go Black will be a premium car rental.  But 14.90 € per hour (the same price as Car2Go Smart cars) is quite a bit more expensive than what other carshares charge for their most luxurious vehicles (not Mercedes, admittedly) and is similar to DriveNow's hourly rate for Mini Coopers and BMW 1-series.  However, Avis would be glad to rent you a B-class for around town use in Berlin or Hamburg for a similar price, but which wouldn't include fuel or insurance (but would be a lot more if you wanted one-way trip between cities).

A trip from Berlin to Hamburg would be about 120 € in a Car2Go Black (assuming the Autobahn cooperated), which is about what a high speed train trip for 1 person without a discount card would cost (in fairness, the train makes the trip about 50% faster).  How often the one-way between cities option will get used is anyone's guess. And it's worth nothing that the one-way between cities is not original with Car2Go — a similar one-way option to travel between cities is already offered by DriveNow between Köln and Dusseldorf.

As with all flavors of carsharing: Customer Convenience = Car Utilization.  And how convenient this station-based carsharing will be depends at least somewhat on how convenient the parking / garage locations turn out to be.  Car2Go Black is a particularly good strategy for Daimler, since the Smart vehicle is such a specialized "city" car.  DriveNow, with it's more versatile fleet, can provide similar, if not greater convenience for longer, out of town trips with it's floating fleet vehicles.  Both approaches have pluses and minuses so it's really up to the customer!

As a reminder about the bigger picture, Car2Go isn't the only trick up Daimler Innovation's sleeve.  They have made substantial moves into the ridesharing market as well.  In addition to their investment in, they have invested in the trip planner app Moovel and now bundled their full suite of mobility services (from themselves and partner) under Moovel listed here (don't ask me why it show up under the Mercedes name).  Integrated mobility coming soon to a smartphone near you!

I know I'm not the only person who will be watching Car2Go Black closely.  Best of luck, meine Damen und Herren.

Tuesday, March 24, 2015

How does Flexible Carsharing Change Mobility & Car Ownership?

The two leading flexible carsharing (one way/on demand) providers in Europe, DriveNow and Car@Go, have made a useful contribution to understanding the effects on members' transportation patterns with the release of a summary of a Joint Mobility Study By DriveNow and Car2Go.

The companies surveyed 2,881 members in Europe, all of whom had been members for at least 3 months and had used a vehicle in the past 30 days.  There was a fairly even distribution of ages from 18-50 and somewhat lower representation above that.  Over 2/3rd of those responding to the survey were male and about the same percentage had no children in the household (the report makes no statement whether the demographics are representative of the membership of the organizations).

Here's how members said they used vehicles:

Since the earliest days of Autolib' in Paris, there has been a concern that flexible carsharing would take passengers from public transport, and contribute to traffic on city streets.  Although the report indicates that carsharing members continue to use public transport and bicycling, there were some situations where users did subsitute flexible carsharing for a transit trips - when the transit trip would have been long or required several changes (echoing a finding from the early studies of City Carshare by Robert Cervero).   The main reason members gave for using flexible carsharing were when it was "the best and quickest way to reach my destination" (80%).  In addition to improved convenience over a transit trip, members used flexible carsharing if they believed the trip was less expensive than a taxi (62%) or if cycling was not convenient (43%).

Another concern about flexible carsharing has been that it might not have the same effect of motivating people to reduce the number of cars they own (and hence the temptation to use those cars) as traditional round-trip carsharing.  In the survey, 37% of members reported giving up a vehicle - of which more than 3/4s gave up their primary vehicle.  That's impressive!
Cars given up by flexible carsharing service members by year

What members said they liked about flexible carsharing were:
  • I have the option to use a car spontaneously, if required (54%)
  • The majority of my destinations are also accessible via other types of transport (53%)
  • The upkeep of my own car was too expensive for me (45%)
  • I hardly used my own car (42%)
  • My life situation has changed (40%)
Regarding the growth of flexible carsharing, members indicated they would use it more, "If the cars were more reliably available in my area when I need one" (74%; which just about every user of flexible carsharing can testify is an occasional problem) and, "If I could use the cars for longer at a reasonable price, e.g. for weekend trips" (43%; an attraction of car ownership, as well as lower-priced traditional round trip carsharing).

Not too surprisingly, the report concludes that since the benefits of flexible carsharing are real, "upscaling the services would increase the beneficial effects" for cities.  I agree.

Industry report or not, I compliment both companies for providing a snapshot of their members.

(Sorry readers, I can't locate a link to the full report and charts online.  Here's the press release in German.)

Tuesday, February 03, 2015

Another update to the classic urban mobility options graphic

My recent post showing updates on a classic graphic of transportation modes based on flexibility-distance received a lot of interest.  I recently came across another variation on this chart from Vincent Pilloy of the Paris-based transportation consultancy Innov360.

Unlike the other conceptualizations Pilloy's conceptualization includes walking and car pooling - useful additions to the chart, I think.  However, I'm not sure why P2P carsharing would be more useful for longer distance carsharing trips.

It was part of a blog post describing the various types of carsharing - round trip, one way station-based, free floating, etc.  Nicely done.

Wednesday, January 21, 2015

City Mobility Scores and Carsharing

The success of carsharing clearly isn't just about how good the operator of the service is, it's also based on the overall balance and richness of the transportation environment of the city (and how the operator designs their service to fit into that environment.  Figuring out some way to "rate" cities on mobility seems like a key to greater understanding for policy makers, as well as a way for the carsharing operator to understand the city they're serving better.

This is interesting and useful attempt to define a set of criteria and develop ratings for 84 world cities in this full report The Future of Urban Mobility (PDF) report by Arthur D. Little for UITP organization.

The author's, François-Joseph Van Audenhove, Laurent Dauby. Oleksii Korniichuk, Jérôme Pourbaix
have divided the mobility factors into Maturity and Performance categores, and include both carsharing and bike sharing in the Maturity ratings.  (I wonder if they'd include Uber if they'd been writing the report in 2015?)  These factors were weighted and the index score calculated.

Of course one can quibble.  I would have substituted "smart PHONE penetration for "smart card penetration" and, ideally, some sort of land use rating to describe the proximity of neighborhood services that enable residents to not make trips at all.

While developing a index is can be useful, much can get lost in the process.  I noticed that Lost Angeles scored slightly better than Portland (my home town) but it's hard for me to imagine that LA really has a "better" urban transport system?