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, December 31, 2014

2015 TRB Carsharing & New Mobility Sessions

January is TRB month when transportation researchers and practicioners in all fields  descend on Washington, DC. The AP020 Share Use Mobility committee Below is a list of committee activities for the upcoming 2015 Transportation Research Board (TRB) Annual Meeting (January 11-15, 2015) to be held in Washington, D.C.  Although I won't be attending, if you want to get an intensive dose of  wht's happening in the field, this is the place to be.

As in previous years there are a number of excellent papers scheduled to be presented, giving you a chance to hear the latest and interact with researchers. In addition the AP020 subcommittee and Ridesharing subcommittees will be meeting.  And before and after the sessions is a chance to spend time networking, including a reception sponsored by the Shared Use Mobility Center (below).  

Note that this year the carsharing sessions will be held at the Convention Center.
(Please confirm rooms with final program)

Workshop 138: Shared-Use Mobility: What Does the Future Hold? Part 1
Location: Convention Center, 144C

Workshop 184: Shared-Use Mobility: What Does the Future Hold? Part 2
Location: Convention Center, 144C

Session 224: Car and Ride-Share Use and Public Policy
Location: Convention Center, 150A

Session 285: Car and Ride-Share Operations
Location: Convention Center, 150A

Subcommittee Meeting: Parking Management Joint Subcommittee of AP020, ABE50, ABE20, ABE25
Location: Marriott Marquis, Supreme Court
Time: Monday, January 13, 2014, 1:30pm to 3:45pm

Subcommittee Meeting: Emerging Ridesharing Solutions Joint Subcommittee of AP020, AP025, AHB15
Location: Marriott Marquis, L’Enfant Plaza (M3)
Time: Monday, January 13, 2014, 3:45pm to 5:30pm

Committee Meeting: Emerging and Innovative Public Transport and Technologies Committee, AP020
Location: Marriott Marquis, Archives (M4)

Session 574: New Research in Car and Bikesharing
Location: Convention Center, 102B

Poster Session 654: Transit Operations
Location: Convention Center, Hall E

Poster Session 655: Carsharing: Public Policy and Operations
Location: Convention Center, Hall E

Subcommittee Meeting: Shared-Use Vehicle Public Transport Systems, AP020(1)
Location: Marriott Marquis, Mint (M4)
There are a number of additional sessions that mentioned carsharing in their summaries which can be searched in the TRB interactive program.

The Shared Use Mobility Center in Chicago will hosting a 
reception from 4:30pm to 6:30pm on Sunday, January 11, 2015, at Cuba Libre Restaurant & Rum
 Bar, located just down the street from the Walter E. Washington Convention Center. Light food and 
refreshments will be provided. The reception is sponsored by the Shared-Use Mobility Center, a new 
public-interest partnership working to connect the growing shared mobility industry with transit 
agencies, cities and communities across the nation.  For more information about the Shared Use 
Mobility Center or call 312-448-6202.

For registration information on attending the annual TRB meeting, please go to: www.trb.org.

Monday, June 30, 2014

Where Does Carsharing Fit in the Scheme of Transportation Modes?

When I was first getting interested in carsharing, way back in 1996, I came across a wonderful graphic that really helped me understand the role of carsharing in transportation.  You've probably seen this graphic in numerous Powerpoints — which modes are best for which types of trips, based on the Distance of the trip and amount of Flexibility (time, destinations) needed during the trip.

I first saw the graphic on Eric Britton's foundational website and e-mail discussion group at World Carshare Consortium, which is still alive and well (as is Eric, who has created more website and discussion groups since then than I can keep track of!)  He told me that the original source, from 20 years earlier, didn't actually call it carsharing but the term "paratransit"(after all the term wasn't coined until 1987 when carsharing as we know it got started, almost simultaneously in Switzerland and Germany).  Somewhere along the line, the word Carsharing got substituted and the chart became history.

 (From Ron Kirby and Kisten Bhat: Para-transit: Neglected options for urban mobility, Urban Institute, 1974)

Well, that graphic was history, until now. But even carsharing evolves and now we have a new flavor - one-way/on-demand carsharing (e.g. Autolib, Car2Go, Enjoy, JoeCar), which has somewhat different trip characteristics.  So I was very pleased to find an updated version of this chart from Marco Viviani of CommunAuto, Montreal, showing the place for One-Way.

Something that Viviani's graphic does very nicely is to convey what those swirly black line arcs in the upper graphics represent - the possible overlap between modes.

One might argue that the One-Way bubble should really be a big elipse that also slightly overlaps with Public Transit, since the most recent evaluations show a slight decrease in transit trips by one-way users.  (But, for what it's worth, I would suggest this should not be a big concern since these are likely trips that would have been difficult to do on transit - either because of time and schedules or because of the number of changes required.)

I suppose one could include Uber, Lyft and Sidecar in the Taxi category, if you really wanted to update it.  The next question will be where autonomous cars belong on the chart?

Hope this is useful.







Thursday, June 12, 2014

Two nice carsharing promotional videos - from South America

I'm always on the lookout for short, nicely done videos that promote carsharing and tell how it works.  Interestingly, the two most recent one's I've seem come across are from the South America, a huge area with lots of big cities (and a couple of megacities) and a whole lots of cars and traffic jams but, so far, very little carsharing.

The first video is from Joycar in Sao Paulo, a new carshare service placing cars in garages and at companies (joining long-established Zazcar).



The second is in one of my favorite animation styles - the hand drawn cartoon (as popularized by The Story of Stuff).  Who it's from is a bit of mystery (to me, at least).  @mobigo.cl is the only identification (tips welcome - just post a comment below.  Thanks).



If you've got some favorites, animated or not, let me know.

Sunday, March 30, 2014

Six Key Decisions For Every Carshare Start Up

As a consultant in the field, I've talked to many entrepreneurs thinking about starting a carsharing company.  Almost always their first question is about technology — the telematic device in the car and the software for reservation/billing/fleet and customer management.  The next question is often about what I think about their choice of vehicles.

While technology and vehicles are important considerations, they are almost never the first things to consider and probably not the most important, make or break, decisions you'll face.  Preparing and delivering the recent webinars in Metavera's Should You Become a Carsharing Operator series got me thinking about what these priorities are.  So I'd like to offer an overview.

First a couple of general comments: many carsharing services have been experiencing 30%+ membership growth rates for a number of years.  The demographic trends indicate that car ownership has peaked in North America and Europe, so I expect these growth rates will likely continue.  Half of the 50 largest cities in the US do not have large-scale carsharing.  And, outside of Europe, Australia and Singapore, the rest of the world is untouched.  (But it may look different in these areas, since carsharing can provide "automobility" for the large segment of the population that may not be able to afford, and probably doesn't need to own, a car.

There's a variety of service models that get called carsharing: traditional (round-trip) services, and variants serving specialized markets, such as college campuses, government and corporate fleet carsharing, and getting closer to car rental model, there's unattended car rental (with carsharing elecronics but regular car rental rates and requirements) and variations on all of above. And, of course, there's one-way/round trip services, which are getting all the attention these days.

No matter what type of service you have in mind, there are some key considerations.  Here's my short list:

Insurance 

If you're not going to operate in North America or Europe, or if you have in mind a P2P carshare service anywhere, identifying insurance should be your very first order of business.   Carsharing insurance is more like a commercial auto policy, such as a corporate fleet or commuter van company might carry, not a personal auto policy.  And it probably isn't car rental insurance either - which is typically minimum coverage (in hopes of selling the customer additional coverage).  This means you have to dig deep to find insurance brokers that specialize in transportation.

And you will quickly find that insurance companies are in the business to make money.  They want to see that your company is going to grow sufficiently that the premiums you pay are worth their risk.  Don't waste your time, and that of insurance brokers, until you have developed a pretty well-defined concept with at least some basic financial projections.  Finding insurance is a slow process.  I can help speed it up.

Pricing

While there are a couple basic pricing strategies that many companies use, this is one of the key factors that prospective customers will judge your service on.  While hourly with miles included is the norm for most of North America, it seriously limits the types of trips your service can be effectively provide.

Developing a good pricing model is more difficult than it seems, since people don't have much to compare carsharing rates to.  Ask yourself: is my pricing simple and understandable for the first-time user?  Does it provide a discount for more frequent users, both individuals and businesses?  The area of pricing, including membership plans and other fees, is a major topic that I spend time helping customers define and refine.  

Customer Service

Perhaps the aspect of carsharing that gets the least attention from start ups is fully developing a  customer support side of the business.  When you own a car, you provide your own customer service.  When you're a carsharing company, how you relate to the customer during the crisis times is where your reputation is defined.  And customers will let the world know when you screw up - via Twitter, Instagram, email to friends - but not necessarily back to you.  This cannot be overstated.  It's not necessarily about money, it's your companys attitude, as well.

Competition

Carsharing is still a new concept for most people.  Two competitors in the marketplace actually legitimize something that many people may have thought was marginal.  So your biggest competitor in your customer's mind is car ownership - not another carsharing company.

You have to address these concerns that your prospective customers have:

  • Will your service be reliable (a car available when I want it)? 
  • Will it be convenient (easy to make reservations or on-demand; ideally no more than 5 minute walk to the car?)  
  • Will it be economical (less expensive than owning a car, including parking)? 

Brand

What is the personality you want your proposed company to convey?  This is so essential it's often overlooked when working through all the financial and operational details of starting a new company.  What kind image is your service going to have: functional, fun, youth-oriented, luxury, cool, reliable, a cooperative/"sharing economy" business, a "local company" or a corporate brand?  As a good example, I point you to Autoshare — they have done an amazing job with their Keys to Wonderful campaign, moving beyond the functional "how does it work" and creating a lifestyle brand.   Beyond a great image, conveying that brand throughout everything you do is a challenge.

Business Plan

In addition to these questions, your business or operating plan needs to show how the day to day operations will be handled: Where will the cars be parked?  Are the assumptions in your pro forma financial projections realistic/reasonable? How many staff people do you need? Do you have a viable marketing strategy?    Are the vehicles leased or owned?  How often do you clean the cars?  Who's handling on-call duties on evenings and weekends?  And, of course, there are the telematics and carshare software platform decisions that may have been your first consideration.  I will offer this hint: rarely does it make sense to start out building your own system - you don't know how all the pieces of your business fit together yet, so how can you design a system to manage it?

Carsharing is a low-margin business so you really need to hit come out of the gate running - whether you're a car rental firm planning a carshare subsidiary, a non-profit in a small community, or a large corporate venture.  As a consultant,  I know I can help you avoid wasting a lot of time and money getting your business off the ground  — you know your local market, I know the industry.  

I am flexible in the way I work with clients — by the hour or day, or by the project.  The most basic way I work with start ups is by reviewing the business plan and offering comments and suggestions.  In addition, using the resources of Team Red I can also provide demographic and geographic analysis to help identify the most promising neighborhoods, conduct survey, etc.

Here's a link to the slides from Should You Become a Carsharing Operator webinar presented by myself and Julian Espiritu of Abrams Carsharing Consulting and sponsored by Metavera.  If you'd like to contact me use the link at the top right of this page.

Friday, March 07, 2014

Does it really cost $9,000 per year to own a car in the US?


I saw it again: another article quoting a statistic of how much it costs to own a car!  You know, the one quoting AAA's calculations that it costs $9,000 per year. 

I am so tired of seeing that statistic!  Not that's it wrong, mind you, but because I don't think quoting it (without some context) actually makes people more aware of the cost of car ownership. Let me explain why.

First of all, if you own a car, you're probably NOT spending $9,000 per year, and I think the chances are slim that you even know someone spending that much each year (unless they own a very fancy car and live in a big city with very expensive rented parking space).  

It's not that the $9,000 number isn't true - I think the AAA did their homework, since it matches up very closely with Intellichoice cost of ownership numbers.  But as the AAA chart (PDF) shows, it's only true for very high mileage drivers in new, medium size cars - and, I would argue, these people aren't the people likely to join and use carsharing.  

I think the number that is more realistic to quote is the AAA number for a small sedan at a lower annual mileage of 10,000 miles per year - about $5,900 per year.  And these are big numbers:
  • $12 per day
  • 60¢ per mile (10,000 miles/year)
  • 46¢ per mile (over 15,000 mi/yr)
So my second objection to the $9,000 per year price tag is that it probably doesn't apply to a big percentage of the prospective customers for round-trip, station-based carsharing.*  Remember these AAA numbers are for new cars and would apply to vehicles less than 5 years old.  But most of the cars on the road today aren't new and especially those owned by prospective carsharing members.  The average age of cars on the road is almost 11 years -  34% of all cars are between 6 and 10 years old and another 36% are older than 10 years.   I would suggest that probably 40-50% of the vehicles on the road would be considered fully amortized (no depreciation or finance charges in the AAA chart) - these owners are probably looking at operating costs in the 25¢ per mile range.

It well known that most people who own a car don't have a very clear ide of what their car is costing them.  So, they don't have a good reference point to compare carsharing rates to ownership.  The closest comparison might be cost of car rental, so carsharing may seem expensive, since most rental rates have a lot of hidden costs - fuel, insurance, inconvenience of renting, etc.  And, unless they are familiar with bicycling/walking/transit use, it can be difficult to imagine accomplishing much of one's life without a car parked out front.

Don't get me wrong, part of any marketing campaign for carsharing needs to include the cost of ownership comparison.   But people make their decision to join carsharing based on many factors, one of which is cost comparison, but for most people the fundamental decision is a "value" question - "carsharing is convenient and less hassle and I get to drive to drive a variety of cool cars."

So, let's get out there and tell the world how expensive car ownership is - but give them a believable number in a context they can relate to.

*  Although, the $9,000/year number might apply to a greater percentage of prospects for one-way/on-demand carsharing, they are probably interested in one-way service for the convenience aspects not the money-savings.)

Thursday, February 13, 2014

Is Car2Go Black the next chapter of carsharing?

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, now they have — Car2Go Black — launching any day now in Berlin and Hamburg with 100 Mercedes B-Class vehicles in each city.


(Note to Daimler PR: the Men In Black juxtaposition is supposed to be humorous.)

And 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).


Sounds kind of like car rental, doesn't it?  But with a twist — they're only available on-demand — you can't reserve the Black cars, only hold them for 30 minutes, just like Smart car2go, so you have time to get to the location.

The vehicles can be returned to any of the Black parking garages/locations, including the originating location.  This includes one-way trips between Car2go Black cities.

And Car2Go Black pricing is a model of simplicity and very interesting positioning — 9.90 € per hour including 50 kilometers with additional distance at 0.29 € per km.  Locating, unlocking and billing will be through the existing Car2Go system.

Commentary

Daimler has come with a very clever compliment to its original Smart Car2Go system.  And should be pretty efficient to operate, as well.

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.)

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. 100 vehicles is about the size of a small rental car location (at least in the US) and in this case, it seems likely there will be several locations of 20-30 cars — probably a decent sized for a rental location that only had premium vehicles (and only 1 model, at the present), particularly if you don't have a lot of staff involved.

The interesting challenge for Car2Go Black will be the on-demand-only aspect of the service.  The limited number of garages/locations is going to make their job of staging the Black cars easier for Car2Go, and should allow them to provide good vehicle availability, since they only have to keep vehicles at a limited number of locations, not hundreds of two and three vehicle pods, as in traditional carsharing.  Still, whether will be able to meet demand on the first major spring holiday weekend will be the test.

Pricing for Car2Go Black is less than the hourly cost of the Smarts in Car2Go (and it needs to be if they expect very many people to take longer trips in them).  But 9.90 € per hour is quite a bit more expensive than what other carshares charge for their most luxurious vehicles (not Mercedes, admittedly) and is very close to DriveNow's hourly rate for Mini Coopers and BMW 1-series.

So, around town, Car2Go Black will be a premium car rental.  And that 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).  However, Avis would be glad to rent you a B-class for around town use in Berlin or Hamburg for a similar or lower price, but which wouldn't include fuel or insurance (and would be a lot more if you wanted one-way trip between cities).

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 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 Carsharing.com, they have  invested in the trip planner app Moovel.  Integrated mobility coming soon to a smartphone near you!

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