Tuesday, December 31, 2013

2013 - Reflections on the Year in Carsharing

2013 has been another major year of carsharing developmentsm which are not only transforming urban mobility but transforming the carsharing industry itself.

Perhaps the not so surprising big news of 2013 is the continued rapid growth of membership and vehicles and the amazing take off of alt-taxi services.  I will admit, in the past I've been skeptical of the various projections of the size of the worldwide carsharing market made by various organizations and companies.  But, given the interest in big players, such as car rental and auto manufacturers, as well as the tremendous (insane?) amount of investment in dynamic ridesharing and alt-taxi companies like Sidecar, Lyft and Über, as well as the traction that carsharing, in particular one way/on demand carsharing, is getting I'm dialing down my skepticism.  We may hit those numbers in 2015 and 2020 - and apparently the auto manufacturers, insurance companies and others in the industry are starting to think so, too.

Overall, it's been another year of blurring the lines between carsharing and car rental.  Operationally, there's very little difference between traditional carsharing and putting a computer in a rental car and letting customers take them without going to the rental counter. The carshare/car rental companies themselves continue to blur these lines with varying strategies about insurance coverage (some state minimum liability only) and how fuel is handled (some with a "bring it back with the gauge at the same level as you picked up at").  I would argue that the big difference is where the cars are located - close to the customers or not?  (And even that may become moot when self-driving cars can come to you.)

There was another type of confusion among the news media, blogosphere and even researchers about about the differences between traditional "round trip" carsharing and one way/on demand carsharing services as if they were interchangeable.   One of my pet peeves for 2013 is headline writers who not infrequently title articles about ridesharing but call it carsharing.

So here are some thoughts about 2013 and what may be ahead in 2014.

Car rental companies take the next step in carsharing

In traditional round trip carsharing, the big news was the Avis Budget Group acquisition of Zipcar.  This bold move got Avis Budget off the sidelines and into game.  In only a few months, the new relationship appears to be providing some major operational benefits for Zipcar.

While a lot of attention was deservedly focused on the Avis Zipcar deal, I see it as part of the trend that the car rental companies putting technology in cars in efforts to increase convenience and lower transactions costs.  It's also part of the blurring of the lines between carsharing and car rental. 

Meanwhile in St. Louis, Enterprise finally made their next move - the acquisition of another local carshare - I-Go Carsharing in Chicago - and the rebranding of all their carshare services, including their extensive college and university operations, from WeCar (a name chosen in haste, I suspect) to Enterprise Carshare.   Although it's sad to see pioneer local operators (I-Go and earlier Philly Carshare) coming under the corporate umbrella, it certainly means that carsharing is going big time.

While Hertz was first to get into carsharing, their game plan seems to be closer to unattended car rental than classic carsharing. They've rebranded themselves for a third time, into Hertz 24/7 which ought to stick.  While they've got larger operations in Miami, Tampa and several other cities and campuses.  They've also created a nationwide network by placing a couple of cars with technology at many of their car rental locations, which should provide some convenience for travelers. 

(It's worth noting that US car rental companies aren't the only one's interested in carsharing.  In Europe Sixt has actively partnered with BMW and co-own and operate the DriveNow service in three cities.  EuropeCar had earlier partnered with Daimler for the car2go service operations, at least in Hamburg.   In Japan, Orix has the second largest carsharing fleet at about 1,800 vehicles at 1,100 locations.)

Where are the car manufacturers in all this?  Beyond the much publicized developments of one-way carsharing, the Volkswagen acquisition of Dutch carsharing company Greenwheels has largely been out of most peoples' attention.  If/when/how VW will integrate Quicar with Greenwheels remains to be seen.  Toyota has been quietly developing their Ha:Mo Ride ("harmonious mobility") service at headquarters in Toyota City and is preparing to put it on the street in Grenoble, France in 2014.  Toyota is also cooperating with the Hacienda Dash demonstration program, with 30 Scion IQ EVs in Pleasanton, California to be operated by City Carshare.  Meanwhile Nissan seems to be considering some sort of carsharing using the Twizy vehicle developed by Renault, and used in the electric Twizy Way demonstration project as well as the Bee (Be E) service in Naples, Italy.

P2P heads down two different roads

This year Getaround and Relayrides defined two somewhat different strategies - one with car technology, one without.  Both companies have punted on the issue of gas/mileage.

Ever since its first business plan competition, Getaround has been working on the CarKit.  I'm not sure what version they're on any more but they appear to have overcome most of the limitations of earlier versions, including immobilizer control (or lack of it) - the perennial friction point for all carsharing technology.  After launching Portland, Austin and Chicago Getaround has concentrated its efforts on refining its San Francisco Bay Area operations and now, has even obtained on-street parking places (like Zipcar and City Carshare) which puts it in the "big leagues" in a parking challenged city.

Getaround annoyed carsharing purists with a promotion for customers to buy a new Smart cars and include them in the Getaround fleet.  While it was counterintuitive (even to me), it's a clever strategy to get more vehicles listed and fuel efficient one's at that, and quite within the parameters of the P2P insurance rules set up in California, Oregon (and Washington which went into effect on January 1, 2014).  Unfortunately, Getaround's focus on San Francisco has somewhat dampened their participation in a major federal research project (Value Pricing Project) in Portland to track vehicle owner behavior after making their vehicle available for carsharing (but I, and others, are hopeful that they will get back on track in 2014).  

Meanwhile, just around the corner and down the street P2P competitor, RelayRides, announced in September they were going to forgo in-car technology altogether and pursue a nationwide - all states are open for business strategy.  All transactions are executed with "key swap" between the vehicle owner and renter.  This results in longer, more car rental-like trips and probably has somewhat lower transaction costs; nevertheless, it certainly appears to be a viable business approach.  The shift away from in-car technology means the much ballyhoo'd partnership with GM/On-Star is essentially moot.

FlightCar jumped into the P2P world with a focus on airport rentals, going after the home turf of the big car rental companies.  In the process they got itself in trouble and back out again, as San Francisco International Airport came to terms with P2P carsharing.  In a fit of marketing pique, RelayRides claimed to have more vehicles at more airports, but so far, even including automated rental company Silvercar (now at five airports), these challengers are only flies buzzing around the rental counters and kiosks of the big rental companies.  

One Way/On Demand, Point to Point, Flexible Carsharing

Whatever you choose to call it, one way/on demand been the media darling of carsharing in 2013.  

Daimler's Car2Go continues its Smart car blitzkrieg (I couldn't resist) of launching new cities, now with 12 cities in North America and 13 cities in Europe and UK.  The services appear to be doing well, and, at the per minute equivalent of $24 per hour (after the recent price increase to 41¢ per minute), it certainly would appear tohave the potential to make money.

Car2Go shown admirable willingness to experiment - offering all-electric fleets in San Diego and Amsterdam (which do not have to be returned to charging stations, similar to other cities with gas-powered Smarts) and all off street parking in Toronto, in 250+ city-owned and private parking garages.  

But one way carsharing is not restricted to the big guys.  In Montreal, very successful round-trip carsharing operator CommunAuto started a new chapter by operating a one way/on demand service called Auto Mobile.  It started as a pilot project with 25+ Nissan Leaf EVs serving a limited area, but in only a few months has expanded the number of vehicles and neighborhoods served and is including hybrid vehicles as well.  A few months after the launch of Automoible, Car2Go entered the Montreal market, so it is now the first city in the North America with competing one way services.  My hat is off to CommunAuto as it joins StadtAuto Hannover and Mannheim as the only other traditional carshare to jump into the waters of one way.  But more are on the way for 2014: there's talk that Mobility Switzerland may get into the one way carsharing and a long awaited RFP in Tel Aviv will likely be awarded.

Meanwhile, in the US BMW's DriveNow continues to struggle without on-street parking in San Francisco.  While they have developed is very handy SFO and Oakland airport service - with drop off at off-airport parking locations (I know not as green as taking BART but still it's electric).   San Francisco isn't the only city in the US, so perhaps they have something up their sleeve for 2014?  

While I'm back on the subject of airport carsharing again, I would mention that the Avis connection for Zipcar enabled them to start placing vehicles at airports - lots of them.  These vehicles must be returned to the airports and are not one way.  Hertz 24/7 and Car2Go have allowed airport pick up/drop off for several years - Hertz in New York City and Car2Go in Austin.

This past year Bolloré/IER announced they would be bringing a version of the Paris Autolib' service to Indianapolis, Indiana.  Indianapolis is rapidly evolving into a very livable small city and just a few hundred miles from Car2Go's unexpected location of Columbus, Ohio.  Few specifics have been announced beyond a 2014 launch date.

The expansion of one way/on demand carsharing has been hampered by the reluctance and slowness of cities to develop policies that would allow these services to operate.  These include on-street parking permission and payment mechanism for metered parking.  To this end, in early December Dr. Susan Shaheen at UC Berkeley Transportation Sustainability Research Center, convened One Way Carsharing Workshop.  In addition to discussing data privacy issues for several upcoming research projects, Dr. Shaheen's proposal for the creation of a consortium of one way operators was well received.  I was pleased to be able to attend this meeting and be able to include my colleague Hannes Schrier from team red Germany via phone.

Ridesharing, Bikesharing and Transit

While my focus has always been carsharing, the rapid growth of dynamic ridesharing and alt-taxi companies, such as Sidecar, Lyft and Über, the media buzz and incredible amount of venture capital that flowed into the space certainly suggests some big changes are ahead. Bikesharing is another new transportation mode that is very popular in cities.   While some may see these new services as minor players, it's worth remembering that several auto manufacturers see the future in providing integrated transportation solutions.  Daimler has also invested in Moovel and BMW, in addition to DriveNow has a parking finding service called ParkNow, and an "app" of lifestyle and transportation called My City Way.

As mentioned above, one of the major challenges is helping institutions, local, state and federal governments update their thinking and their policies to enable these new services to compete fairly with existing transportation services and modes to the benefit of all.  To this end the tireless Susan Shaheen, Madonna Camel and the entire TSRC staff at UC Berkeley, organized the Shared Use Mobility Summit in San Francisco on October 10-11.  The audience packed the Hilton ballroom for two days of sessions with industry and government leaders, and top thinkers in transportation.  I was pleased to moderate the session on policy recommendations.

And speaking of conferences, I was also pleased to speak at the Carshare Europe conference in Brussels in July.  It was sponsored by New Transit magazine in the UK and brought together a wide array of industry people for a very interesting conference.

EVs and Technology

In spite of the high hopes of EV enthusiasts, most carsharing continues to be powered by gasoline.  Given the higher cost of battery electric vehicles (EVs), without special funding or incentives most carsharing programs have only a few EVs in their fleets.  Car2Go has demonstrated the feasibility of operating a one-way service with the vehicles mostly untethered from the charging stations - in San Diego and Amsterdam.  As mentioned above Renault has demonstrated the feasibility of a Twizy-based one way service in a suburb of Paris, and a stand-alone Twizy service opened in Naples, Italy.  Meanwhile, Toyota, never short of innovative vehicle concept ideas has developed their own lightweight electric vehicle, the i-Road, which will be incorporated into the Grenoble Ha:mo project mentioned above.  But in 2013 Kandi Technologies in China appears to have the most fully developed EV casharing service (see this post).

In carsharing technology the platform providers, such as Metavera, Mobility InternationalJustShareIt, RentCentric and Cantamen continued to add features.  Hardware providers, such as Invers ConvadisC2G Logic (Pointer/Cellocator)Miveo (formerly Pilotfish), and others have moved closer toward simplifying installation and reliability.

A Side Note about Marketing

Regular readers are aware of my interest in marketing, so I can't help but pay my respects to the people that came up with Lyft's pink mustache campaign.  It's genius - friendly, funny and easy to identify.  I think it converted a potentially disastrous challenge to the taxi industry in several cities and played a part in challenging government agencies to at least begin to update their policies to begin to recognize these new modes while continuing to protect riders.  

And honorable mentions goes to CommunAuto for the name of their one way service Auto Mobile, a great play on words in French and English.

Also to Zipcar for continuing to do a great job developing their lifestyle brand and their relentless pursuit of "millennials", through research reports, such as this one about the benefits of "pay as you live" lifestyle from the UK and their latest effort being the creation of Ziptopia, an online lifestyle magazine.  While I don't expect to see it in doctors' offices anytime soon, I will read it on my iPad whenever it comes out.  

And to Car2Go for their often inspired and incessant use of Twitter.  I especially enjoyed the picture (above) of newly married couple in their car2go.

Finally, although it isn't from a carsharing company, I can't resist including one of the cleverest ad videos I've ever seen - the Honda "Hands" commercial.  It follows on from earlier commercial "Cog" commercial.

Thanks to all my friends, colleagues at team red and correspondents in the carsharing and transportation world - 2013 was a good year.  Here's to an exciting, prosperous and somewhat disruptive 2014.