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Car-sharing needs to be taken back to its historical roots

Stephen Marcus

It is always satisfying when a company finally does something that you have been preaching for some time, thinking it is a great idea. Today was one of those days. As a transportation analyst, it feels highly gratifying.

The news is that Toyota, in collaboration with three Japanese real estate companies – Nomura Real, Daikyo Incorporated, and Toyota Housing Corporation – is launching a condominium-based vehicle car-sharing program with plug-in hybrid Prius and iQ EVs in Spring 2012.

For a while now, it has amazed me that this “residential-based” approach to car sharing has often been ignored. It makes perfect sense that the best people to share a car with are those that actually live within your building. A little unknown fact is that this residential car sharing approach was utilized decades ago by Israel’s kibbutzim (collective agricultural communities) before the invention of online social networks and vehicle tracking tehcnology. The kibbutz would simply own a small fleet of vehicles that were shared among those that lived and worked on them.

Instead, car-sharing companies have placed thousands of vehicles throughout neighbourhoods. The nearest car-share vehicle can often be a 5-10 minute walk away from your home. Whilst having a short …

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Smart Transportation – innovating in a market worth 20% of GDP

Stephen Marcus

Mobility is one of the most fundamental and important characteristics of economic activity. We all have the basic need of going from one place to another – whether you are a business exec travelling across town (or even internationally) for a meeting, a manufacturer moving its product from the factory to the shop floor, or a parent dropping their kids off at school.

The extent to which mobility has shaped and changed society is not thought about enough. The development of the early rudimentary transportation networks was arguably the catalyst that led to the formation of the first multinational corporations, as well as enabled the major flows of international migration that has occurred since the 18th century. Today, transportation has become so integrated into our economies it accounts for 10-20% of total GDP spending in many major economies.

Whilst there is no doubt that more efficient mobility networks will continue to be a major contributor to future wealth creation and social welfare, it is quite clear that parts of our transportation networks are used above their designed capacity resulting in associated costs such as congestion (see: 2 week traffic jam on China expressway), accidents, and harmful urban air …

Car sharing – an opportunity for Auto OEMs in a tattered market?

Stephen Marcus

The dire financial situation of the auto industry is already well chronicled. Global car sales have fallen 6.3% from their peak of 71.4 million in 2007 down to 66.9 million in 2010, a rate of decline not seen for decades. Digging deeper into these numbers reveals a more dramatic story: sales have plummeted in America almost 40% below their highest point to levels last seen in the early 1970s, necessitating bastions of the American auto industry such as GM and Chrysler to have their balance sheets shored up by large government handouts.

Global Car Sales

Source: www.economist.com

In tandem with the recession-induced dearth of car sales, the total cost of car ownership is showing the opposite trend. According to the 2011 AAA ‘Your Driving Costs’ study, the cost of operating a sedan in the U.S. increased by 3.4% to $8,776 per year based upon 15,000 miles of annual driving. One of the biggest culprits was gas prices which, despite increases in fuel economy, had increased 8.6% to 12.34 cents per mile on average for sedans.

So far, so simple.

But adding further fuel to the fire is car sharing. The results from a North American shared-use vehicle survey …

RelayRides: Could it Zip past Zipcar?

Stephen Marcus

All eyes are on Zipcar this week to see how it fares in its scheduled IPO which, at the mid-point of its proposed range, would command a market value of $639 million and be the first car-sharing company globally to go public.

However, less-known but already emerging, is a “second generation” of neighbor-to-neighbor car-sharing companies. The leader of this up-and-coming business model is San Francisco-based RelayRides. (For a more detailed look at RelayRides, take a look at the company insight profile (subscription required)). In contrast to Zipcar which owns its own 8,000-strong fleet of vehicles, RelayRides’ fleet is comprised of privately-owned vehicles which people are willing to loan out in exchange for hourly and daily pay-as-you-go fees from drivers who want access to cars.

By avoiding the overhead cost of buying and maintaining its own fleet, the company says that it will be able to offer car-sharing at hourly rates that are $1 to $2 less than competitors like Zipcar. According to Zipcar’s S-1 filing, c.70% of its costs and expenses are associated with its fleet operation making its business massively asset intensive. Further, with RelayRides, the hourly rates may fall as more car owners join the scheme …

What can carsharing learn from Groupon?

Stephen Marcus

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. This phrase seems to be at the core of Germany-based Eileo’s carsharing vision.

Eileo is a lesser-known company in the smart mobility landscape when compared to its Zipcar and RelayRide counterparts – in fact I only came across Eileo because it was briefly mentioned at the end of Lisa Gansky’s new book, The Mesh.  (For those interested in hearing Lisa speak, she will be keynoting at the Cleantech San Francisco Forum next month). However, Eileo is creating a solution that has the potential to spread carsharing services at a pace and at a cost that business models such as Zipcar can only dream of.

Eileo works with budding entrepreneurs, major companies, and fleet owners to give them all the tools that they require in order to launch their own carsharing network. The full solution includes:

  • An online sharing application that allows members to quickly plan and book a car, manage customer relationships, as well as manage car maintenance schedules.
  • An easy-to-install, non-invasive, real-time and automatic system box with built-in GPRS-GPS-RFID-GSM/voice-bluetooth technology. This allows