The Fuse

Carsharing Displaces Private Vehicle Ownership, Says car2go     

by Matt Piotrowski and Paul Ruiz | May 11, 2018

As the sharing economy continues to grow in urban areas, car2go is looking to expand its services with plans to launch this year in Chicago, the country’s third most populous city. High utilization of car2go’s vehicles has allowed for rapid expansion of its customer base and the penetration of more markets in North America and Europe, helping displace private vehicle ownership in urban areas.

“We operate in cities with high density and where people are living without a car, or in a city that wants its people to have fewer cars in households,” Aaron Landry, a General Manager at car2go and also a SAFE Energy Security Fellow, told The Fuse in an interview.

Carsharing in urban areas

Besides launching in Chicago this year, the company is in talks with other major urban areas that are looking to carsharing for its environmental, economic, and quality-of-life benefits. car2go—which has captured 30 percent of the global carsharing market—has 3.2 million unique users and 14,000 vehicles in its fleet worldwide, and is operating in 11 North American cities.

Utilization rates for car2go vehicles have increased sharply as of late, with Washington, D.C.—where there are 80,000 users—seeing significant growth.

Washington, D.C.—where there are 80,000 users—has particularly seen significant growth as of late. From 2016-17, utilization in the D.C. area increased by 76 percent, and it reached a record in April, as registration for the service rose 49 percent last year. The high rate of growth in D.C. is noteworthy in part because of concerted efforts by the city government to provide more transportation options in order to reduce congestion and vehicle ownership. In the past year, D.C. has led North American cities in growth for car2go among the millennial age group.

Carsharing allows individuals to be able to access vehicles when necessary but do not have to deal with hassles and costs of owning a car. car2go vehicles are available for users on the street and in selected lots throughout participating cities. In order to make its service more attractive, it has added options that suit a users’ specific needs. They can pay by the hour or by the day instead of having the cost calculated on a per-minute basis. As a result, the average trip length continues to increase.

Fewer vehicles on the roads, of course, reduces urban traffic congestion and opens curbside space to ease parking constraints. According to a 2016 study by UC Berkeley Transportation Research, each car2go vehicle replaced 7-11 privately owned cars in the five cities studied, when taking into consideration older vehicles sold and avoided purchases together.

While carsharing has led to a reduction in vehicle ownership in certain cities, it has a difficult time attracting users in low-density suburbs.

While carsharing has led to a reduction in vehicle ownership in certain cities, it has a difficult time attracting users in low-density suburbs. Low-density suburbs and rural areas tend to experience much higher rates of household vehicle ownership than high-density cities. Moreover, in some cities where driving is the main mode of transportation and public transit is limited, the appeal of carsharing diminishes.

“Our sweet spot is density. When someone drops off a car2go vehicle, we want someone else around to be able to utilize it,” said Landry. “Though there might not be high demand for carsharing in parts of the suburbs, we’re seeing car ownership rates declining in the urban cores of many major cities across the country, which means there is an increased interest and growth in carsharing.”

Complementing other modes of transit

Carsharing is designed to work alongside other forms of transportation, such as ride-hailing, urban mass transit systems, and bikesharing. Carsharing can both substitute and complement other services, and cities see it integrating well with other mobility choices to help cities move with efficiency.

Cities see carsharing integrating well with other mobility choices to help cities move with efficiency.

“People can walk to work, use bikeshare or use an electric scooter to get around town, but for those in households without a car or considering selling their car, we can fill that gap whenever they need a vehicle,” said Landry.

He added: “In D.C., the success of Capital Bikeshare in addition to the ways the city has adopted all the free-floating options validate the work we do since we target the same demographics. We’re not trying to peel customers away from other services–in fact, our model integrates seamlessly into other transportation options. We all complement each other.”

In a reflection of this combined effect of different mobility serves, when car2go saw its highest utilization in D.C. in April, Capital Bikeshare also hit a record. And although ridership of the city’s struggling metro system has declined in part due to new mobile services, ridership has not collapsed.

Electrification and autonomy

car2go believes flexible carsharing can serve as a push toward electric mobility. The company has already been integrating electrification (see here for its white paper on the subject) and new vehicle technologies into its fleet. In three European cities—Stuttgart, Madrid, and Amsterdam—electric vehicles (EVs) are available for customers. It has also started a pilot program for EVs in Montreal, while its partnership with Daimler is expected to help grow the EV portion of its fleet. Daimler, along with its subsidiary Mercedes-Benz, has its own electrification goals, and plans to expand the number of advanced fuel vehicle options offered in its lineup in the coming years. One priority for car2go is to contribute to cities improving access to charging infrastructure so it can increase the number of EVs in its fleet.

car2go believes flexible carsharing can serve as a push toward electric mobility.

Using EVs in carsharing can help reduce customers’ anxiety about electrification. Since EVs are not yet mainstream, most motorists have yet to become comfortable with the new technology. The use of EVs in carsharing fleets provides incentives for cities to build the necessary charging infrastructure and enable widespread adoption. Other benefits include positive reinforcement that EVs can be utilized for everyday use; cleaner air in cities; and the opportunity to test other innovations and mobility solutions.

car2go has also incorporated other new technologies into vehicles, including rear-view cameras, blind-spot assist, and other next-generation features, which add to the company’s programs that offer driving safety reeducation to its users and its participation in “Vision Zero”—a program among cities that aims to eliminate vehicle accidents and deaths. “These measures benefit our bottom line and develop mutual relationships with municipalities,” Landry said.

The company’s ultimate goal is to leverage the synergy between autonomy and electrification, to increase safety, reduce costs, and broaden carsharing’s appeal. “We all know that everyone is moving in the direction of EVs and autonomy, and carsharing, in general, is a great stepping stone to get there,” said Landry.