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7 Steps Toward Shared Vehicles in 2010

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Whether they run on gasoline, electricity, or even Christmas ‘nog, our own vehicles can take us only so far on the road to cleaner, less congested roads. Fact is we’d be better off with fewer cars on the road, more efficient use of private vehicles (i.e. more carpooling, less solo driving) and more convenient ways to get around via mass transit, walking and cycling.

Widespread access to so-called “mobility as a service,” is a crucial piece of this greener transportation puzzle, making it easier for us to go car-free more frequently. Over the course of 2010, a rich ecosystem of services, startups and innovations began to take shape.

As envisioned by MIT researchers, a fully fleshed-out Mobility on Demand system would involve a comprehensive network of services in which city residents could rent an electric car, scooter or bicycle when and where they need it in order to bridge the “last mile” gap between public transit stations and a final destination.

The effects of sharing bikes and vehicles could extend well beyond the transportation sector. According to a report out this fall from research firm Latitude, car-sharing is kindof like a gateway drug for the growing trend of using the web to help people share physical things. People who try out car-sharing services are more likely to join in other web-based sharing services, and folks who share vehicles share significantly more than non-car-sharers across a range of categories, from living space to food to media. Here’s seven steps taken this year toward shared transportation.

Bike Sharing Boom: Bike sharing networks, in which city residents or tourists can rent bicycles by the hour or day, have been around for years. Paris, with the Velib program it launched back in 2007, helped popularize the idea, but it wasn’t until this year that bike sharing — often enabled by mobile access to the web and GPS — began to gain momentum stateside. Programs launched in Denver, Minneapolis, Washington, D.C., and other metro areas.

New York City is up next, as the Big Apple’s transportation department requested proposals last month to set up a high-tech system for borrowing or renting bikes for short trips, starting around the spring of 2012. Across the pond, London launched a program called Barclays Cycle Hire in July and by November it was set for expansion, having already logged more than 1.5 million journeys and signed up over 100,000 users.

Green Light for AB 1871: In September legislation called AB 1871 passed in California that paves the way for distributed or “peer-to-peer” car sharing programs, which let car owners rent out their personal vehicles. The legislation establishes rules (going into effect January 1, 2011) for when a vehicle owner’s insurance policy stops applying, and when a commercial policy held by a service provider like RelayRides or Spride Share would kick in.

Distributed Car Sharing Revs Up: Following passage of AB 1871, startups including Spride Share, RelayRides and Get Around (which started as a team project at Peter Diamandis and Ray Kurzweil’s Singularity University in Mountain View) have launched services to facilitate distributed car sharing. Big-name investors have put some skin in the game, too. Having launched in the Boston area in the fall, RelayRides expanded to San Francisco this month, and announced its first round of investment from Google Ventures and August Capital.

Zipcar Guns for IPO: The car sharing market fielded its first IPO registrant this year, with Zipcar (s ZIP) filing in June to raise up to $75 million in a public offering. Plans for proceeds from the offering include, among other things, repaying more than $40 million in debt, developing new services, expanding its fleet and paying some $5 million to shareholders in the recently acquired Streetcar. Then again, the company raised a $21 million Series G financing round earlier this month, which could mean the IPO is on the rocks.

Streetcar Acquisition: In its latest bid to expand across Europe, car sharing heavyweight Zipcar bought London-based car-sharing firm Streetcar this spring in a deal valued at about $62 million. Zipcar CEO Scott Griffith called the deal (which came on the heels of an investment in Spanish car-sharing startup Avancar late last year) a key step toward making the company a “truly global” car-sharing network.

UK antitrust authorities halted integration of the two companies while they looked into whether “the transaction may result in a substantial lessening of competition in any relevant market in the United Kingdom,” but ultimately approved the transaction this week.

Big Auto Starts Sharing: With the launch of a pilot project that will let customers rent any current BMW model by the hour from the company’s event center in Munich, BMW Group broke into car sharing this fall. It wasn’t the only example of a big auto company moving into Zipcar’s turf in 2010. Daimler expanded its two-way city car sharing program Car2Go (pick up a Smart Fortwo in the Car2Go fleet, drop it off at any open parking spot in the program area).

Daimler also launched the Twitter of ridesharing, Car2Gether, which identifies and links passengers and drivers with empty seats that are nearby and heading in the same direction. What’s a German car company doing getting into social networking and tech-enabled carpooling? Trying to figure out new business models for an era of accelerating urbanization, declining car ownership and expanding access to the mobile web.

Hertz Snaps Up Flexicar: In October, rental car giant Hertz (s HTZ) announced an agreement to acquire Australia’s largest car sharing provider, Flexicar. Already making inroads with car sharing in Berlin, London, Madrid, New York and Paris, Hertz added Melbourne and Sydney to its Connect by Hertz footprint with this deal. The companies planned to integrate Flexicar’s 2,500 members into Connect by Hertz shortly after closing the deal (expected this month).

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10 Responses to “7 Steps Toward Shared Vehicles in 2010”

  1. Hi Josie,

    Just letting you know GoGet is actually the largest car share company in Australia at over 4 times the size of Flexicar. In fact GoGet has almost as many cars as Hertz’s car share operations worldwide.

    Cheers Catherine

  2. I’d also nominate the expansion of Daimler’s car2go service to Hamburg, Germany (and reportedly to Vancouver, BC) as indicating they are past the demonstration phase. It’s definitely a step beyond existing carsharing programs – allowing on-demand, open-ended trips, including one way trips by the minute anywhere in a rather large area of Austin. 10,000 members in Austin, Texas in less than a year is pretty impressive.

    Daimler is very savvy to call car2go “personal public transportation” since it provides a hint of the possibilities that the Paris Autolib program (and other “mobility on demand” ideas that have only been dreamed of) may offer.

  3. Justin Benson

    Shameless plug for guys I know (but have no financial relationship with) is ZimRide out of the Bay Area. You have to enable drivers to monetize sharing. I think that’s how you get mass appeal. For better or worse – and you touch on this – sharing for the sake of sharing is a small active population. Allow a student to offset the cost of that car by getting $3 * 3 passengers each way to class and now you have the real chance to take adoption to an entirely new level.

    • Yeah, it will be interesting to see in the next few years how much consumers warm up to tools that link online social networks (hello, 500M+ Facebook users) and ride-sharing/carpooling/car sharing. Monetization is an important piece of the puzzle, sure. But another part of the challenge is changing the mindset that we just hop in our own car and hit the road solo whenever we have somewhere to go.

  4. … And, with all this promise and expectation for electric cars and car sharing, there remain HUGE challenges for our industry (how far will you drive on your 4 hour rental, what charge will be left, and when can I rent it again?), which is often still not earning a profit.

  5. Actually, for both electric cars and Google’s self-driving cars the important point I think is that these Major Industrial Players specifically mentioned car sharing as markets for their products. Even a few years ago car sharing simply would not have been understood, much less planned for. With our major urban footprint, and 40+ people per month driving each car, car sharing organizations are going to be able to help introduce electric cars to the public – infrastructure, usage, feedback, acceptance, or not – and clearly are an import market for the OEM’s too, with orders the size off Hertz etc. As for Google, who also invested in RelayRides recently, I don’t think anyone could have guessed how far ahead on this idea they were. Personally I’m not convinced that cars that drive to your house, or to your destination, are ‘shared cars’ versus taxis versus a whole new type of transit, but importantly, this issue is forcing all of us to start thinking about what could be here in less time than we’ve already been sharing cars (15 years).

  6. If we add in the selection of Bolloré to run Paris’ massive Autolib project, Google’s self-driving cars (which they see as having a car sharing application), and the imminent arrival of electric cars seeking early fleet adopters (such as Communauto, Hertz and Enterprise), then our 2010 Lists match well ;-)

    Kevin McLaughlin

    PS for the record, the Aussie company is Flexicar, the Seattle-based company was Flexcar :-)

    • Hi Kevin. Noteworthy milestones, for sure, but it seems to me that we’re a long way off from putting self-driving cars to work for shared transport. As for the arrival of electric cars in commercial fleets: It could certainly be a step toward cleaner transportation, but electrification doesn’t necessarily mean a shift away from personal car ownership and single-occupancy vehicles. Right?

      P.S. Thanks for catching that missing ‘i’. Fixed!