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Key lessons from a
world wide car club tour
Section two - North America
Summary of notes made by Jo Taylor, Carplus Director, in Autumn 2003 following a tour funded by the Winston Churchill Memorial Fund
North America - San Francisco
City carshare are the operators on the west
coast of America. They have 3000 members sharing 80 vehicles at 40
locations. They see car clubs as an urban service with the density
and parking pressure as crucial. In suburban areas they have been
less successful but do gain members who require a 2nd or 3rd
vehicle.
Vehicles
They have used the lime green Beetle as their signature car so far. They are now gradually transferring to new navy blue Toyota Scions Xa. The Beetles were not very comfortable to drive and restricted visibility.
Funding
The San Francisco County Transit Authority provided $200,000 over two years. This was supplemented with funding from private foundations. Other district authorities have provided pots of between $15-40,000 for local operations and in some cases use the car club instead of an in-house fleet. Currently 65% of operating costs are covered by revenue.
CCS have also benefited from free parking spaces in city owned parking lots for two years. They now get a 50% discount.
Modal Shift
A study published this year by University of California at Berkeley followed hundreds of members of City CarShare over an 18-month period. Results include:
Since joining, 30% of City CarShare households in San Francisco have sold one or more of their privately owned cars.
67% have chosen not to
purchase an additional car.
Overall car travel
among members has dropped 47%.
Use of public transit, walking and bicycling by CarShare members has increased.
Each day City CarShare is saving 13,000 miles of vehicle travel, 720 gallons of gasoline, and 20,000 pounds of carbon dioxide emissions.
Utilisation
85% of City CarShare members use the service at least once per month; 30% use it once per week or more. Most trips are made outside of peak rush-hour periods. The biggest use of City Carshare is shopping (29.5% of trips) followed by personal business (19.2%), recreation (12.5%), travel to work (10.7%), social (8.3%), medical (5.6%), eating out (4.7%) and other (9.5%).
The study authors compared the cost of individual trips based on time and distance and wrote that 84% of trips taken during the period of research were cheaper using City CarShare than they would have been using taxis or traditional car rental.
Welfare to work programme
Metropolitan Transport Commission for Bay Area
are funding LIFT (low income flexible transit) programme which is
linked to welfare to work.
CCS work with Calworks (certain type of welfare available to working
families - typically single mothers). For a 3 year period CCS will
waive start up fee, monthly fees and 50% of the hourly rate for
Calworks users. Offering access to a car at $2 - 3 per hour. CCS are
opening 4 additional pods in areas with a high density of Calworks.
16 people joined under this scheme so far, the target is 300 members
by the end of 2006. Those who have joined so far don't use the
vehicles for commuting as it is not cost effective. Although CCS are
encouraging car pooling to work in CCS vehicles. Members use cars to
make day to day trips easier e.g. shopping, taking kids to
childcare, travelling to health appointments. Car ownership is a
major financial drain on household budget of working poor.
Marketing
CCS have found word of mouth marketing is key. They also rely on the visibility of the vehicles, press coverage and "door hangers". The message has changed from environmental to mainstream as they developed the service. CCS have bought mailing lists which target those who rent their homes rather than owning them. They have attracted corporate membership through articles in professional journals.
Public transport
There are three car stations at train stations.
Research shows that 50% of trips in these vehicles are from those
travelling to the station and 50% from those living in the
surrounding area. The latter group are deemed necessary for the
viability of the car station. A single public transport pass was
launched in 2003 for the Bay area and CCS would like to integrate
with it.
North America - Zipcar
Zipcar have 10,000 members across Boston, Washington and New York. They have 25-30 members per car.
Charging and marketing
They have made a conscious decision to
include
all costs when calculating charge rates. They think th
at other clubs
are in effect subsidising motoring and not encouraging use of other
modes of transport. However in Washington where they are head to
head with Flex car they are trying a $20 annual fee. It is
attracting low users but they are useful for word of mouth
advertising.
They have also offered a 60 day trial which gets people in quickly
but there is a big turnover. They need to evaluate whether it is
worth it and if they can get their recruitment cost per member to
under $100.
The most successful marketing is around the subways targeting urban public transport users using catchy headlines which direct people to the website. Banner adverts on lifestyle websites were not cost effective. They are also offering events eg: museum trips, cocktail evenings and volunteering opportunities in an attempt to be more than a car hire service. Sending a member to speak at a community event is also good advertising.
They have attracted many student members as their age limit is 21 whereas most car hire companies restrict those under 24 from getting cars.
Low car housing
City of Boston has included car clubs in its 'Parking in Boston' guidance document and refers developers to local car club operator zipcar. Zipcar currently has agreements with developers to integrate its services into eight high end developments totalling around 4000 properties. They request free of charge parking spaces for car club vehicles and will seek an operating subsidy in less favourable locations. They assume 4% take up of membership in the first year, so 500 units would support 1 car.
The developments tend to be high value and there is a demand from developers for up-market vehicles. A trial BMW is doing well. At the other end of the scale Zipcar are involved in a low income housing project. This is helping residents get bank accounts and computer training, which are both needed to use the service. It is a low risk venture for them as the location is ideal for attracting members from outside the development too.
Community work
Zipcar offer cars for use by volunteer drivers
taking senior citizens to hospital. Vehicles are allocated in some
off peak time.
North America - Flex Car
Growth and funding
Flexcar covers 16 counties of 8 states,
including California, Washington DC and Chicago. They expect to have
50 cars and 60,000 members by Dec 2004. They are adding 800 members
per month currently. Once they reached 40 cars in Seattle members of
the public started calling them, rather than Flexcar having to reach
them. Seattle is the 73rd densest city so there is much room for
expansion in the US. They plant to break even in 2005/06.
There was an investment of $4 million last year from Honda to help with their expansion programme. They also received $200,000 per annum funding plus a secondment from Seattle Transit Authority (Metro) all of which allows lower charges. Corporate members account for 5% of income in LA and San Diego, and 25% in Seattle and DC.
Metro wanted to help carsharing grow quickly to a size which would allow effective integration with public transport. The cash funding has now finished and the secondment reduced to 25% FTE but they are now funding incentives for workplace travel plans. They encourage season tickets to be purchased by paying for discounted Flexcar membership and matching any investment from employers $ for $. Metro also attracted a grant to pay for the difference in cost between standard cars and hybrids.
Utilisation and marketing
They require a minimum of 150 hours / week to start a new location and 200 hours / week for it to be sustainable. Developers have been asked to contribute by buying 100 hours/week of car club use at $625 / month for 3 months and 50 hours / month for remainder of the first year. The developer can then give this time in terms of "Flexbucks" to anyone in terms of free car usage as a promotional tool.
Flexcar pay neighbourhood champions $300 for 15 hrs / week to raise awareness. They also use the big bang approach by bringing in a promo car, place posters and make offers to members who have not used cars recently to incentivise use. For example they offer $10 free hours if you use the car within the next x days. When they added a raffle for a free meal they doubled the success. Their approach is deliberately more community orientated in the neighbourhoods and more corporate in the city centre.
There is fierce competition between Flex and Zipcar in Washington. Flexcar don't request a deposit and forced Zipcar to do the same.
Membership profile
60-70% of members rent rather than own their own
homes. They describe their membership as bi-polar attracting young
professionals and older people but not those at the family stage in
between.
Environmental record
Flexcar offset 100% of their emissions and offer
members the opportunity to do the same to double the offset. They
also use Hybrid vehicles.
Canada - Co-operative Auto Network
Growth and marketing
CAN started with 7 people sharing one car. They
now have approx 1600 members sharing 77 cars, (20:1) across
Vancouver and Vancouver Island. They are attracting 50-60 members
per month.
The most effective advertising for CAN is on public transport. CAN are offered unsold spaces by Translink They also seek articles in local papers and adverts in community papers. Word of mouth advertising is increasing.
Low car development - Electric Avenue
The co-operative set up a for profit subsidiary
to develop the Electric Avenue car club. The development has 456
suites in the city centre. The developers negotiated reduced parking
standards by incorporating the car club.
At Electric Avenue the developer, Wall Financial, gave 10 vehicles
to Co-operative Auto Network and provide free parking spaces.
High profile marketing describes how purchasers can pay off their mortgage six years earlier by joining CAN rather than owning a private car. Car club membership was sold as an integral element of the property. When selecting options such as interior finishes, purchasers could opt in to car club membership and add CAN $500 to their final purchase cost. The Electric Avenue development gave the car club service a high profile backed with a financially persuasive argument. Adding CAN $500 car club membership fee is relatively painless when purchasing a property starting at CAN $167,000. They achieved 26% opt in to the car club.
Operations
CAN use a call centre after 8.30pm. The service is not always satisfactory. A new on-line booking system has reduced administrative burden.
CAN have had little success in lobbying Vancouver authorities for parking spaces whereas suburban authorities offer free parking. Members can use any space in the parking permit areas of the city, when on hire, for $50 / year.
The annual fees paid by members currently pay for the office costs and the usage charges pay for the cars. Until they broke even the co-operative shares paid for the shortfall, now they pay for the development.
Social projects
CAN are exploring the idea of a members supported fund. Members are offered a 2% discount on their bill if they pay within a certain time. The 2% would then be donated to a fund to help other members join. The scheme has attracted much support.
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