The Successes and Failures of Car Sharing – What is Next?

What exactly do the practitioners — working on the front lines — think about the role of new technology, telematics, market demands, shifting consumer preferences, and the viability of new options for car sharing? Is the traditional rental model of car sharing the future or is peer-to-peer the next frontier? Does the EV revolution really fit into the car-sharing model? What challenges remain as the core obstacles to car sharing as a solution to urban congestion and localized air pollution? This workshop will delve into the potential for car sharing to transform the mobility and pedestrian experience of cities as well as their carbon footprint.

Transcript

Bill Reinert

Some of you might have missed the first panel this morning. We talked about urban transportation modes. I’m going to focus specifically on car sharing for this thing and with that, again, some of the world’s greatest experts here. Paul Hedtke next to me, from Qualcomm and their business solutions. Next to him is Rick Hutchinson from City CarShare, Mark Norman from ZipCar and my good friend, Susan Shaheen from UC Berkeley, Transportation.

I’ve got question for everybody. The way this is going to work ñ I ask everybody hard questions, I take copious notes and then I come back with the really, really hard questions.

So Paul, Qualcomm is known for If you guys don’t know who Qualcomm is, there’s a Google search for you, but you’ll be using a Qualcomm chip to do that Google search, I promise you. The smartest kids in the room. Okay. Telematics is pervasive now in the automotive sphere. We’ve got BMW here. They think they’re doing it right. Or not BMW, Mercedes Benz, BMW thinks they’re doing it right, we think we’re doing it right, you see what Ford’s doing. So what do you see, how do you see the intersection of telematics and automobiles in 10 years and how do you see the space between the providers and the auto makers emerging?

Paul Hedtke

Well, the word “pervasive” ñ I like that word. It’s pervasive “connected cars” ñ and I’ll use that term instead of “telematics.” Telematics has some connotations, being limited to safety and security services and unlocking your door, whereas I think the terminologies are broadening as more infotainment kind of services are enabled to connect two cards.

In terms of connected cars, we’d love them to be much more pervasive than they are because from our perspective every connected car has got one of our chipsets in it or has the opportunity for us to put one of our chipsets in. It is becoming much more pervasive, Bill, as you pointed out, but still today there are approximately 80 million automobiles produced on the planet and will be this year, and less than 10% will actually have connectivity built into it.

It’s more pervasive than it was, but there’s still a long way to go. I think from a automakers perspective in terms of connected car programs it kind of varies. Some automakers see the connectivity, their connected car program as a way to ñ and I want to come back a little bit to a comment you made this morning or a question you asked this morning’s panel about who owns the customer. Some of the automakers look at the connected services as a means to establish a much closer relationship with the consumer, with the customer.

Because if you think about it, for most of us, as consumers, when we go purchase an automobile we go to a dealer. We don’t actually interact with the automaker themselves, we interact with a dealer for the automaker. We purchase the car and then, going forward, all of our service generally is done with that dealer, which is typically an independent business from the automaker.

Many of the automakers that we interact with, of course, and through the ones that are putting connectivity in a car, they see these services as an opportunity to establish a continual-, a continuous running relationship with the consumer where they’re offering services that are branded. For example Mercedes MBrace service, BMW Assist, and so on, BMW Connect Your Drive. These kind of programs allow the automaker to establish a running relationship and also obviously the connectivity can be used and it is by various automakers to collect information about how the drivers are using the cars. The automaker can learn something about consumer usage of the automobile and factor that information into the next version of the automobile in terms of user experience or features and so on, and even fundamentally how the consumer operates the vehicle.

There’s this kind of different approaches depending on the automaker. Some of the automakers, I think it’s very well known, provide the service themselves, so they not only deliver the metal, as you were referring to this morning, but they’re also delivering the service themselves. They implement it themselves. Others outsource it to a third party, and so it’s not quite as bundled in to their business model, it’s more outsourced. So it really kind of varies.

Bill Reinert

I’d like to follow on with a question about that. So in my world, in the metal world, our product cycle is 6 to 8 years. It’s a long version and some of them are looking ahead 10 to 15 years out. But when I worked for Hewlett-Packard and I worked for Hewlett-Packard and then came to Toyota, our product cycle was three to six months and we were cannibalistic. The next product was designed to obsolete the one it was replacing. How are these cultures ever going to understand each other? What happens there?

Bill Reinert

That has been obviously an issue for the auto industry. I’ve been dealing with the auto industry now for almost 10 years, and I remember a lot of times, 5-6-7 years ago the very first things, words that would come out of the mouths of the people in the auto industry or in a particular company that I was meeting with is “Why doesn’t the wireless industry give us even the time of day? What do they ignore us?” And in fact, the big issue at the time ñ and you’re probably well aware of it, Bill ñ was simply Bluetooth, pairing up phones with the hands-free system in the car, that was such a headache for the auto industry because Bluetooth was not a completely defined standard, that it left the handset makers to find a lot of the profiles and how they work. Now all handsets work the same way, and so the auto industry had to deal with that and it was a nightmare for the industry.

To your point about the life cycles. So even for us, Qualcomm, we ship over a half of billion chipsets a year to the consumer device industry and those devices, as you point out, your experience with Hewlett-Packard, they have the life cycle of 18 months or a development cycle of say 12 months, and then a life cycle of another 18 months or two years and then they’re trashed, basically.

Automobile, to your point, has a life cycle of 10 to 15 years, and the development cycle is 3 years. For us, for example, from the time the automaker, engineer or their tier 1 supplier in most cases picks up one of our chipsets, drops it onto a schematic, to the time that first wheel’s on the road with that chipset in it, that’s three years. By that time we’re quite a few cycles down the path already in terms of the technology incorporated into the next generation chipset.

So we actually have had to react to that by extending the life cycle of our chipsets for the auto industry specifically and we in fact have done that because our typical life cycle of one of our chipsets is three years, maybe four years, but for the auto industry we put a minimum floor of seven years under those selected chips that we offer to the industry in order to accommodate that life cycle.

There’s a three-year development cycle, typically another three to four years of manufacturing with that particular chipset, going into production cars. So you’re looking at about seven years. And then you have warranty support after that, even so. So it’s a very different life cycle, even from a purely obsolescence perspective. From a technology perspective the automobile sort of gets left behind rather quickly given the 10 to 15-year life cycle by the wireless technology industry.

Matt was describing where things are going in the future here over the next few years. For the auto industry to keep up with what’s happening just on the network side is difficult for them. The networks are moving along, they’re kind of left behind fairly quickly because of the long life cycle of the automobile.

Bill Reinert

Great. We’ll come back to that. Rick Hutchinson, CEO of City CarShare, here in the Bay Area not for profit car share. Rick’s in charge of just about everything. We talk to him a lot, we like him. A hard question for you, Rick. Is there a role for electric cars, like the little one you saw out here today? Is there a role for the electric car in car sharing and what are the hurdles?

Rick Hutchinson

I’ll give that a qualified “absolutely.” There’s a role for electric vehicles and car sharing for a couple of reasons. The major one is that car sharing exists to solve some social environmental inequity issues that exist in our communities. Anything that is going to lead us to reduce CO and greenhouse gas emissions but also to introduce communities to new and innovative technology is very important.

So with car sharing, when you have an electric vehicle in a car sharing network you have the opportunity to have many people use electric vehicles as compared to one person buying an EV and one person using it. What we’ve experienced so far, we have about 20 electric vehicles in our fleet. We had in the last 6 months almost 1,000 unique users of those vehicles, so that’s 1,000 people who have been exposed to electric vehicles, can become more comfortable with it and as importantly for us, we’re learning a lot about what it means to have and to manage an electric fleet.

So we can build best practices over time, we can share it with other car sharing organizations, we can share it with fleet management and we can determine how to better integrate the coming evolution of the vehicles, at least the automobile and especially with the electric vehicles.
As for barriers, there’s two main barriers. One of them is an operational barrier. We have to have infrastructure, we have a lot of chicken-and-the-egg thing going on here. You have to put in charge in-station infrastructure in order to have cars that can be charged. You need to have the cars and quite frankly cars at an affordable level that car-sharing organizations can eventually make money on. So we’re struggling with that right now. There has to be a balance.

There’s also operational issues, as Mark knows, in how people use it. And that brings me to the second barrier. It’s overcoming mindsets, it’s helping people become more comfortable, understand the utility, the function of electric vehicles and how they can quite frankly meet their needs but also be good for the community, and that’s going to take some time. It’s going to take time to have people feel comfortable.

Bill Reinert

Is there a different profile between your subscribers who actually prefer the electric car over the gas cars? Is there a different profile, a different person? Do you market to them differently? Will you market to them differently?

Bill Rick Hutchinson

Well, that’s a great question. We have only limited and anecdotal information on this. We have people who are super users. They’re going out of their way to find certain cars. We have 10 converted Priuses and a Volt as a PHEV. We have Mitsubishi, Ford, Nissan electric vehicles and we have people already determining what they like, so even if it’s not the closest vehicle, they will go and take the one that they think is going to meet their needs.

What we’re finding is, again, from the utility point of view, PHEVs make a lot of sense for people who are going on longer distance and longer duration trips, but if they are just doing the most common car-sharing trip, which is short distance, short duration, they’ll pick a smaller car in the city, quite frankly. They may go for whatever is the most compact and easiest one to get around. And they care less about whether it’s a PHEV or an EV.

Bill Reinert

And one last question about this. Do you see City CarShare ñ and this would be something for Mark to think about ñ do you see yourselves as getting in the role of infrastructure maintenance, infrastructure management? How does that work?

Rick Hutchinson/h4>

By default we are. There are more going into this space that we will utilize this on an outsource basis. At this point it is so small that part of the learning process here is to understand what we’ll need to do to maintain that infrastructure. For us, we are putting infrastructure in specifically for City CarShare cars, but in most of the real estate, most of the developments or garages we put it in, we’re also offering to put in a publicly available charging station as well, so that they can offer it to other people parking in their garages. In some cases we are actually sharing maintenance requirements with those facilities, and that’s been pretty well received at this point.

The other point I’ll make in regards to that is this idea of the connected car. With EVs it’s going to be much more important that we have information about charging, about usage, about where they’re going ñ not specifically where they’re going but how far they go and what the needs are. Getting information from the car on a real time basis is critical in order to scale.

Bill Reinert

Mark Norman, ZipCar, President. If there were a Xerox name in car sharing, it certainly is ZipCar. I think anybody who thinks about car sharing now, that name is high on the list. Back in history there was really Flex Car and Zip Car, and they really would head at each other tooth and nail. They were chasing the same customer and chasing the same territory, and Mark was CEO of Flex Car. He came there from Chrysler of Canada and finally they had the good sense to shut the war down and become one big company and Mark’s now president of ZipCar. I think I don’t really need that you guys have been around enough to know who ZipCar is. You can’t walk in any city in the United States without tripping over a zippy. A question for you, Mark. This is going to be another question here for Susan, in a different format, but the question for you, Mark ñ from a policy perspective what’s needed to start and maintain a car sharing program?

Mark Norman

Thanks for having me. I think getting tattooed with Xerox actually might be a little tough, but I haven’t bought paper in a long time. Susan and I met in the early days when Flex and Zip were blowing their brains out for who’s bigger and we used to say to the press, “It’s like two kids in kindergarten arguing over who’s taller and they both want to play football in college.” Clearly, the industry, and Rick knows this, too, it’s very much in its infancy. Low bearers to entry to your question, high bearers to scale, to Rick’s point on electric vehicle usage.

So what does it take to get started? You heard from the panel this morning, there are more and more mobility options in general with aps on your phone, and more and more car sharing options for any of you, really wherever you live. It was a few short years ago where it was only available in big cities with a satchel of public money. And now it is ubiquitously available in big cities with big piles of private money.

There are also alternative deployment models, whether it’s peer-to-peer, that helps deploy in a less dense area, it helps us get in a more suburban and outlying areas that wouldn’t have had the density or the asset turn to support traditional car sharing, but you even see it in some of the things that we’re doing with fleet sharing. You heard Scott talk about ZevNet at UC Irvine.

We’ve announced work that we’re doing with our technology in City of Houston owned cars ñ they’ve got two dozen leafs in operation with our vehicle. In a way, that’s almost like peer-to-peer, but within the same workgroup sharing of our technology in their cars. So between peer-to-peer, between city usage and then what we’re doing on college campuses, the barriers are lower than ever to get into car sharing and walk the talk.

So for policy makers or for business leaders to say, “What would it take to share my fleet, to be more efficient? What would it take to have our small suburban enclave on the map as a green-behaving operator?” It just wasn’t really that thinkable, even 5 years ago, and the barriers are lower than ever. I will say from a policy standpoint there are a couple of things that help be more hospitable. How you think about on-street permitting and parking is important. How you think about taxes and so many cities are used to rental taxes, funding new stadiums, but in fact it’s really taxing the behaviors that we’re trying to encourage, which is living car light not car less.

There’s lots of great things to do in a car, but to complement this great intermodal infrastructure’ The University of DePaul did a study and showed that the effective tax rates on car sharing in many of North America’s large cities were higher than that on tobacco and alcohol, all those syntaxes. And you sort of say, scratch your head and go, “Is that the behavior that we’re trying to encourage but we’re taxing it like smokes?” It doesn’t make sense. There are a few things that policy can do to be more hospitable, but the lift is lower than ever to bring car sharing near your place of business or place of residence.

Bill Reinert

My good buddy Robin Chase is unable to join us today, but Susan is here. The question for you, Susan ñ we’ll get back to another issue here, but this one I want to ask you ñ how does peer-to-peer car sharing exist in this space? Is it the next frontier or are we going to continue to see the traditional rented model dominate?

Susan Shaheen

Great question. I think there’s room for both. I think that the huge opportunity with peer-to-peer, I think it’s one of our holy grails, right? In the car sharing industry is how do we car sharing out of the densest urban cities into suburban areas? It’s a really interesting model in that you don’t have the high capital cost that ZipCar, City CarShare and other car sharing organizations face, but you do have other obstacles like fear of sharing, insurance considerations and that type of thing. But it has the ability to go into so many locations that traditional car sharing or neighborhood car sharing models would have trouble getting to, or it would take them so much longer to get to.

I see them as very complementary models and also I mentioned earlier in the first panel, this idea that I’ve had is why can’t shared use follow us through our life style? We start on college campuses and move into dense urban areas a lot of times after we graduate from college, and then we get married and we have kids. Maybe car sharing can’t reach us in those locations, but are there other shared use models that can follow us through the lifestyle and lifecycle phases of our lives, including taking us all the way to the baby boomer era and beyond as we grow older?

I see them as very, very complementary models, and I hope there is less biting than we saw in the early days of car sharing with the models. I think that stuff’s all getting sorted out, but I do think we need to talk more.

Bill Reinert

I’m going to use the chairman’s prerogative here and ask some car-oriented questions. This is for Mark. You see a lot of the OEMs now getting involved with their own personal signature car sharing. Toyota’s no different. We’re all looking at getting involved in car sharing. With the OEMs comes enormous capabilities, enormous manufacturing capabilities, but also comes a tremendous amount of overhead that you’ve got to pay. My guess is that, as one of the goals of ZipCar and City CarShare, you’ve reduced your overhead down to a minimum. Can the OEMs compete?

Mark Norman

You can do anything with enough money.

Bill Reinert

I mean compete and make money?

Mark Norman

The answer is that it remains to be seen. The models are it is an asset in terms of business. One of the things that we did in going public last year was build a compelling case at three levels of unit economics. Member economics ñ does a member drive profitable returns over their lifetime? Vehicle economics ñ does the car generate cash flow? And city economic ñ how does it roll up to make something that makes sense? And that’s one of the things that we’ve been able to show.

On college campuses, for example, is that you don’t have to have hundreds of cars to get used to make an enclave on a college campus be profitable. Can they make money? I don’t know, but there are other factors. You and I have talked about this. There are regulatory pressures that enter into a corporate financial equation that may trump unit economics in a car sharing operation.

I think at their core the best OEMs, and we have great respect for Toyota, it really is a lead among them, and I’m not just blowing smoke. We’ve done thinks with EVs dating back to 2003 with Bill and the team at the Toyota. But they are very good at design and packaging and power train efficiency, and have not historically been great service providers. It just hasn’t been their core business.

We are trying to build a business at ZipCar around purpose-built processes and being the most efficient at scale for this business that is truly disruptive. It’s very different from rental leave in that it is very pod or depot-dependent, lots of throughput of a lot of cars and a lot of labor through a certain site. Everything is self-serviced and distributed and to a degree upends a lot of things that a lot of traditional large rental companies are good at. I know Rick lives this, too.

Bill Reinert

One last OEM question. This is for everybody, not just’ Let’s start with Paul and let’s go down the line. I brought the cars up, the iQEV and the Think City ñ I didn’t bring them up just because we had nothing to do with their cars. I brought them up because you guys are experts in the audience from all over the world, and I was curious. If I was going to design or if the guys that work with me are going to design a perfect car for car sharing, what elements of those cars, if any, would you tell me to incorporate? What do I take back to our design engineers? Let’s start with you.

Paul Hedtke

Well, I had the opportunity to chat with you about that, Bill, down there, so I’ll steal a little bit of that conversation. A vehicle that’s easy to maintain, easy to keep clean, or that almost keeps itself clean, obviously that’s a vehicle that’s very reliable. For a car-sharing vehicle I think it’s going to be very important. For me, as I was describing, if I pull out my smartphone and I want to use a vehicle to go somewhere, I put in some criteria of what that trip is. My smartphone’s got the information and algorithms on it and access to the database about the vehicles in the vicinity. That’s all finding good and that’s probably pretty straight-forward in terms of how the business would operate, but I want to know actually more than that.

I think Mark, you talked about this a little bit ñ people will sort of gravitate to a certain type of car for a couple of reasons. One thing, we’re all’ [phone ringing] Sorry about that. Speaking of phones’ We all somewhat use an automobile to convey who we are to a degree. That came up this morning, as well, in your earlier panel. It’s a bit of an image thing, so what kind of car I drive might be important to me. What does it look like? Is it clean? When I get in the vehicle is it clean?

Going back to my perception or view really of the whole car sharing concept is having that connectivity and the sensors, if you will, or the ability to detect what kind of shape the car is in, what kind of car’ Obviously, I typically would know what kind of car it is, but I would want to be able to see ñ has this car got a bunch of gum wrappers all over in it or someone’s rotting sandwich in the backseat that the last person left? I want to be able to see an image of the interior of that car, I want to be able to know what this thing looks like, at least to a degree. It’s not covered in dust or mud or something and I have to get in to drive this thing. I’m not going to be able to see through the windshield, for example.

I think from my perspective the automobile would have to have not only the materials, as we were talking about earlier, that are easy to clean, but also the technology in the vehicle, sensor technology and the connectivity and enough battery to support that connectivity where I can get an image of the interior of that car and whether I really want to even go seek this car out and use it. Is it going to be acceptable to me when I arrive at the location? And things like that, so I think not only is it just whether the batteries or what the charge is on the battery, if it’s an EV or how much fuel is in the vehicle and so on? It’s things like that, which certainly can be determined. That information can be gathered and presented to the potential user right there on his smartphone in real time. I think that will be an important aspect of all this for the consumer.

Bill Reinert

Rick, what do you think interesting in that course [unclear 28:31]? Is there anything there that grabs your imagination?

Rick Hutchinson

As far as car is the concern, it’s about user experience, and the fact is tht with car sharing, we are trying to promote multimodal transportation. You should be looking at walking, biking, the public transit, other shuttles and obviously utilizing cars. You’ve got a variety of experience among those options. If you’re going to be in a shared car, you have a different responsibility than if you’re in your own car. Anything that’s going to both heighten your awareness of that responsibility, but also provide quite frankly a reason to stay with car sharing is important. The connected car is critical.

If we were going to ask the OEMs to change one thing was give us more access to ODBC and the CAN bus connection. That computer that is on wheels driving around the street can provide more information, so we can make a better user experience for people.

There’s lots of little things over the years that we’ve shared. I know ZipCar’s shared with the OEMs on little things that matter for cars. In the early days, on some Toyota cars we noticed that on the gas cap the lever was opening so much that they were breaking. That little kind of thing we gave feedback to Toyota on that, so that they could strengthen that. I use that kind of minor not-very-important example to say that car sharing is different, and therefore with lots of people using a car constantly over time between effectively 8 to 12 hours a day in a single car, mostly on short distances, that car is going to be used differently. We need to have more information about it, about the use.

Bill Reinert

And Mark, how do you’?

Mark Norman

I totally agree with everything you guys said. Making it really seamless and easy and simple is what makes car sharing not giving up a car, but getting access to a whole network of cars. And the more seamlessly you can port your profile between cars, the more engaging and personal and less stressful, frankly, it’s going to be.

I mean, we talked this morning about just discovering transit in a new city. It’s hard. You have that awkward pause in front of the machines that spit out cards and stuff. The first 10 maybe 15 minutes are kind of awkward and then after that you’re blitzing through, and now I’ve got 5 transit cards in my wallet or something. How do you make a car version of that? It’s easy to port between’

I really applaud Toyota for asking these questions from us. Five years ago, six years ago, when it was like, “Gee, I don’t know. We’d better start thinking about that.” We think a lot about it now and so, to Rick’s point, we think about durability. There are certain colors that don’t work for us, because they show dirt. The materials that the thing is made out of, that are dent-resistant, recycled plastics and composites ñ those help a lot. Parkability ñ the footprint really matters. How do I get the most package in the smallest space really matters. By the way, I have more than one friend, so I might need a backseat. Things like that matter.

The iQ has done some pretty ingenious things in that regard, but then how do we use connectivity to deliver function and features that matter? John, I think from San Francisco, talked about checking the traffic ap. I mean, that should pipe into the nav display, so you know exactly what’s ahead of you. It’s got my destination. They’re secure; the next user can’t see them, things like that. It’s important ñ my preferences, my playlists, my addresses, my destinations, and can bring that with me, with my reservations and my secure access via my smartphone or card and it’s completely blind to the next person. That’s a pretty attractive connected car.

Bill Reinert

And Susan, over the years I know you’ve done many, many, many car sharing.

Susan Shaheen

I’ve started and run to, so durability is huge, it’s totally huge, but I don’t want to repeat a lot of what other folks said, because I think they’ve nailed a lot of it. I think interoperability when you go to put your telematics into the vehicle is really critical. I think also being able to stream into the CAN bus, making that easier for operations is really critical. Particularly, Bill, as we move into using electric vehicles, alternative-fuel vehicles more, being able to track and understand those better, somehow making it more seamless for the car sharing organizations to link into the CAN would be great.

Parking ñ so you mentioned streaming traffic. I think streaming real time parking information into the vehicle would be really critical, so with the neighborhood car sharing you go into and out of the same lot. One way you’re moving all over the place, but also when you’re renting or accessing a short-term vehicle that goes into and out of the same lot. A one-way model, you still often need to find parking, and I think linkages to things like SFpark, which is a dynamically available parking system here, in San Francisco. Linking to that I think would be critical as well as traffic information.

Bill Reinert

Great. Well, that just triggered another question. I think we all agree that we’re going to see car sharing in a lot of ways become ubiquitous in the city. Does car sharing start to shape the way cities are designed or redesigned over time? Do you start cutting out space for car sharing and eliminating space for individually-owned cars? I assume it’s happening here. I don’t know that it’s happening in other places and I’m very curious as to that. Anybody who wants to join in, that’s great.

Susan Shaheen

Can I just say some stuff about car sharing and car sharing benefits?

Bill Reinert

Yes.

Susan Shaheen

I really want to say that because I think this ties really closely to Mark’s comments about the DePaul University taxation study, which I collaborated on ñ really, really amazing study that looked at that, but also to the parking benefits.

From a policy standpoint car sharing has been documented. We did a 2008 study at UC Berkeley. These guys all participated among many other car sharing organizations, and here’s just some data, Bill, that came out of that study. Four to six vehicles actually sold per car-sharing vehicle put on the ground. Nine to thirteen vehicles taken off the road, combination of sold vehicles and postponed purchases from a single car-sharing vehicle. We see things like 25% of people from that survey said that they actually sold a car due to car sharing; 25% said that they postponed a vehicle purchase due to car sharing. That totals up to 50%. We saw everything ranging from 27% to 43% reduction in CO2 emissions, carbon dioxide emissions, and vehicle miles, vehicle kilometers traveled.

The reason why there’s a range like that is our methodology took into account what people would do if they actually postponed a purchase. So the higher end of that spectrum, that 47% actually takes into account both sold cars, as well as postponed cars. These are pretty dramatic numbers for those of us who study transportation alternatives and look for benefits and think we need to do a better job of communicating these benefits directly to policy makers. In the context of climate change, cap and trade programs, possibly getting some of those funds directed toward shared use expansion, towards parking management taxation issue.

So that was something I really wanted to say earlier because we’ve got hard data. These are serious numbers that came from a North-American survey that was done in 2008. It deserved notable numbers that I think should be used in a policy context. In terms of land use, I think the parking connections, we’re going to see a stronger connection to that, Bill. I know San Francisco is working on a shared use vehicle policy, trying to really expand the number of on-street spaces and we need to just do more of that. But I think we can’t forget about the social and environmental benefits that are delivered with the car sharing concept in particular.

Bill Reinert

I want to build on that, and this is for all of you. What kind of shifts in regulation, investment and policy really, really need to occur so we can make this work, so we can really find an exit strategy to be totally self-sufficient?

Susan Shaheen

I think Rick might want to jump in. Did you want to jump in and then’?

Rick Hutchinson

There are a couple of things. First of all, enlightened municipalities are already driving some of the policy initiatives. There are not enough of them out there doing this, but there are people who get it. As far as making car sharing or having car sharing be in new communities or having more spaces for car sharing, San Francisco has had policy since 2006, which requires car sharing and new developments of a certain size. Other cities have put in similar policies.

Just this last year, for the first time that I’m aware of, we’ve got car sharing into the Federal Transportation Bill. That’s very, very important because it not only opens up car sharing to being able to get more grants or more money, but it also will start a definitional process. As Mark pointed out very well earlier, there’s issues of insurance, taxation, policy that are real issues for the car sharing movement. I’m a big believer that you want to incent behaviors you want and you need to create some distant centers for those you don’t want. So we have to be very careful, in fact, with policy building over time and definition of what car sharing is, is part of that.

I wanted to make one comment on multimodal transportation, as I think that’s very important for policy. This isn’t just about car sharing. It’s about how people get around and how they could get around better not just in cities but in other areas, as well, college campuses being a big one. So peer-to-peer car sharing isn’t car sharing in the older sense, but it is an expansion. There are all these aps and other ways of accessing transportation within cities. It’s all part of the solution, but it’s getting ahead of policy. At this point cities are struggling quite frankly to deal with the collaborative consumption and sharing economy environment, and policy is lagging behind some of the innovations that are coming up in this area.

Bill Reinert

Thank you. Okay, do you want to a question? You guys don’t mind if we just take some questions now? Yes, go ahead.

Orson Watson

My name is Orson Watson and I work for the Garfield Foundation. I’m coming from a philanthropic perspective where we fund a lot of transit equity, transit advocacy issues around low-income urban communities. That notion of car sharing has tremendous implications for this, when we’re talking about how do you get low-income people to work etc, etc. One of the things that I find a little’ I find it interesting that probably because you’re coming from an automobile industry, the income of your end-user is predetermined, so you said, “Oh, we all go to college, we all drive to this'” That’s people in a certain socio-economic group, but what I do not hear is I do not hear your’

You talk about choosing car sharing as a choice, choosing not to own a car but to share it as a choice, but there’s a very large segment of the population in America who would choose car sharing because they can’t afford a car, and I see that as tremendous opportunities for the whole notion of car sharing, but I don’t hear any of you including that in your business models.

Bill Reinert

Actually, I work with the University of Missouri, Kansas City. Kansas City Intercity is one of the poorest Intercities in the United States and we’re addressing that directly. We don’t have good solutions, and not just that. It’s the whole idea of sustainability and of the Intercity pool and how you deal with that.

Mark Norman

We probably spend more time on the choice element because that’s the hardest perception to break. Clearly, at the core is, as Susan said, a well-documented research on commute reproduction, on CO2 reduction and greenhouse gasses. Again, car purchase deferment, more walking, more transit usage. Again, the testimonies we get from members on “Let me tell you how you changed my life. I can afford another bedroom in the city. My partner doesn’t have to work a second job. I lost 5,000 pounds because I shed my SUV and I lost 25 pounds walking to work.”

That benefit on affordability, our average member saves over $600 a month versus owning a car, and to your point, if you said, “Well, they couldn’t have contemplated owning one,” then they only gave themselves half that raise or they had freedom and mobility options that they didn’t have before. I know Rick can speak to this, too. We are in so many working class urban neighborhoods that really are the lifeblood of what we do in addition to folks that literally shed Aston Martins to use this service. There aren’t that many, I can probably count them on one hand, but there are thousands and tens and hundreds of thousands more that are really making city livability affordable and solving those problems that you’re raising.

Orson Watson

But are you building a business strategy around [unclear 42:55]? For example, NSTAR, which is being used by used car companies to get rid of the [unclear 43:06]. You don’t pay your car bill, they can simply just shut your car down. And that’s a very conscious business strategy, and so I’m curious, are you actually building a strategy around attacking that certain income segment of the market?

Mark Norman

Yes, our focus is on community development. I mean, the mission is enabling simpler and responsible urban living. Is the focus in and of itself 100% on underserved communities? No. Is that part of our expansion as we grow adoption? Absolutely.

Rick Hutchinson

Yes, just really quickly. This is a huge issue in the car sharing discussions that go around all around the world and there are certain areas where car sharing makes money in certain areas where car sharing doesn’t. I don’t mean geographical areas, I mean because of performance, because of cost, in different parts of the world insurance and liability costs are much lower than in other parts of the world, so all of that comes into effect here.

Are there programs in car sharing? Absolutely. ZipCar has absolutely expanded into a lot of other areas. Here locally we have our community share program, which is oriented toward low and moderate-income people. We’re bringing them into car-sharing. We work with Affordable Housing Developments and we’re putting cars in every affordable housing development that wants them so that we can serve that community. We have our Access Mobile program, which is a wheelchair-accessible vans that are made available for the disabled community. We are looking at underserved communities and we are very actively doing advocacy and education where we can.

Susan Shaheen

I really appreciate your comment, and I’ve studied this industry for a long time and there is a lot of discussion about it. It tends to not be what is featured in a particular panel or a topic, but this discussion is happening also around the concept of peer-to-peer. It’s also happening in the concept of one-way.

I know there’s been a lot of discussions when Car2Go, for instance, is going into a city, to make sure that when they zone that area where they go in that they’re actually also going into lower income areas. This discussion is also very active in the public bike sharing community. We should probably try to do a better job of making sure we also bring this up, but I think it’s in part just because I think a lot of our message is about choice, but I do think choice is being integrated towards other segments than just college students and young adults coming out of college.

Neal Peirce

I have a question. Is the mic on? I’m Neal Peirce for the Washington Post Writers Group. I’ve been writing occasionally about car sharing, even as Robin Chase was chewing my ear off about it several years ago. I think it’s a fascinating concept and personally I’m a ZipCar member, but I’m wondering. I wonder if you all could give me an overall view of those who are looking from outside at this movement of the car sharing and then the peer-to-peer. How fast has it been growing and what is the outlook for it to have a really substantial impact on the transportation choices that are made and on automobile usage and patterns and on the development of cities? I just don’t have the sense for that, how fast it’s growing or if new steps need to be made into undertaking for it to grow much more rapidly?

Susan Shaheen

I think we all should take a stab at this question. We’re often asked this question. I think the potential is phenomenal, particularly when you look at the addition to neighborhood car sharing of all of these other types of models, like peer-to-peer and one-way. I haven’t seen a study that collectively looks at the expansion capabilities of all of those, but I know there’s been a lot of people throwing around numbers.

I did a study a number of years ago that came up with a number of 7.5% of the population of urban areas with drivers over the age of 21 being the total market capability of this. At this time I think that number would be higher than that because of the capabilities of peer-to-peer to now go into suburban and rural areas. I also think the one-way model, which we don’t know much about yet, is probably capturing a whole different market segment than we understand yet.

I think there’s a tremendous growth potential, but something does seem to be holding that back. I think that’s in part capital cost, I also think insurance costs, I think parking costs, taxation issues. I think a key question in transforming in transportation is how can public policy and governmental support at the local level or regional level, state and federal, international levels come together to help accelerate the deployment of these things. I’ve been looking at this a long time and I thought we would be beyond the million mark at this point for North America. I don’t think we’re behind but I think we could be a lot further ahead if there was more support from a policy standpoint.

Mark Norman

Just from ZipCar’s standpoint, we invested in wheels of peer-to-peer service earlier this year and made a minority investment in business because we think it is very interesting and is a big part of a larger, broader solution. To Susan’s point on penetration, when we’ve seen neighborhoods display upwards of 15 or even 20% penetration of ZipCar membership in certain areas. We say, “Wow! That could be certain parts of town. How do we extend that uptake in larger areas and through a combination of more expanded service definition with peer-to-peer?” Why has it not happened more in the last few months? I think Susan has some of the issues, insurance and awareness and mindset, but we’ve definitely got skin in the game and are paying real close attention to it.

Rick Hutchinson

One of the points I’d like to make on this is that the kind of car sharing that has been popular and has expanded in North America has been a model that is either transit-oriented or cars-on-demand-oriented and it has been an innovation. It continues to be new an is driving the market. One of the reasons I think that’s important is we see the OEMs, we see rental car agencies, we see new small startups, all are trying to find a way to get into this idea of sharing your vehicle, so that you don’t have to own your own.

Quite frankly the fact that car sharing isn’t bigger is partly because there are market gaps that need to be filled in different ways and those market gaps are being filled by some new and not necessarily well established business. There’s a peer-to-peer taxi kind of idea going on.

All of these things provide more options so that people can drive less, don’t have to own a car, can around the city in a greener, more socially-responsible way, but also with a lot more convenience. I think all of those things together are going to help car sharing actually grow even faster in the future.

Paul Hedtke

I can’t speak to the car sharing business model or policy issues because I’m just not close enough to that industry, but I think one thing is that, especially in the US, the US consumer, the automobile, maybe not for the 19-year olds, like my son, so much, but for most of us the automobile is a very personal device, and I think one of the things that we can do to create greater acceptance is with the use of technology.

Obviously, coming from Qualcomm I would obviously say this and one of the best ways to do that is this device we all carry around on us called our smartphone or our phone. A lot of times now it has all our personal contacts, it has our music, it has our entertainment, it has movies and so on. If the automobile, back to Bill’s question earlier ñ what’s the right feature set in a shared automobile? ñ when I step into the vehicle or sit in the vehicle, if that vehicle and my smartphone now become one integrated solution that I don’t have to do anything, all my infotainment is right there because my phone and that automobile have synced and I can use the applications that are on my phone or I can use my phone in other words for navigation, for all my infotainment’

I think at least that will help close the market gap perhaps a little bit, where people feel that they’ve now brought a little bit of themselves or they’ve customized that car to them, made it a little more personal, and I think technology can do that, or it can help do that. Obviously, it’s not going to do it by itself, but it can help contribute to that, improving that user experience and again, just based on the personal impression that we and our automobiles have a thing. It’s kind of the American consumer mindset.

Rasheq Zarif

Rasheq Zarif from Mercedes Benz Research and Development, specifically in the Business Innovation group, so thank you, Susan, for mentioning Car2Go throughout the day. It’s great to see the rest of you guys up there. I have two questions. First of all, we’re definitely a supporter of peer to peer right sharing, and we kind of envision that eventually there might be a hybrid solution between car sharing and ride sharing.

For example, ZipCar not only will have car sharing, but you can utilize car-pooling within ZipCar. So what are your thoughts about that, of having a hybrid solution? And then the second question is as state legislators are really, really pounding down on this ride sharing of programs, like Uber, Lift and so forth, how can we all work together to go against them? Not go against them, but work with the policy makers to say, “Listen, this is the way of the future and we should be supporting this rather than beating down on them.”

Mark Norman

To the first question on ride sharing, ZipCar has had a partnership with Zimride for a while now and they help aggregate people going to different places and take those trips in ZipCar, so you can start a ride pool without a car. We’ve also done something called ZipTogether, which encourages ZipCar members ñ Zipsters we call them ñ to crowd-source destinations. If you’re going to a concert, again, ZipTogether to get there and cut the costs.

Definitely seems seamless, again, to some of the themes that have been raised here, more options, more flexibility, more intermodality, as it relates to ñ the question on regulation I’ll turn over to the rest of the group, but there’s a lot of constration these days on cities and particularly with the taxi regulations and what’s going on with Lift and SideCar and Uber.

Rick Hutchinson

Yes, there’s a really interesting model, innovative startup companies trying to do new things with technology and quite frankly again, policy is lagging. Policy doesn’t exist to support or quite frankly even know if it’s a barrier in place. In the case of Lift and SideCar ñ does everybody know what those services are? Some people have called it P2P taxis. It’s effectively you’re in your own car and through a matching service, through an ap you can pick somebody else up along the way and get them to their destination. Because of certain laws, you can request a donation rather than actually get paid for it. Those are effectively how they work. Uber’s a little bit different. Uber’s a dispatch system effectively for limos.

Right now, at least in California, the CPUC is concerned. They’re concerned for people’s safety, they’re concerned for how it will be used. Obviously taxi services and policy makers are trying to understand more about what its impact is. The point I want to make is that these innovations are very important, even if something doesn’t work. The innovations are driving the multimodal movement, if you will.

The sharing economy is going to include and continue to include services that don’t make it and don’t work. They’re going to include ones that bring us to a new level and I think, again, it’s going to be a matter of policy and innovators getting together and figuring out what is helping us meet our community goals, as well as people’s personal needs as far as transportation is concerned.

Bill Reinert

We’re a little overtime. All of these folks will be around during the break. I encourage you to chase them down, stalk them, get your answers. Thanks.

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