Cities Share Cars to Save Cash

  • Cities have started to use car sharing programs in order to save money (Photo by Ed Edahl, courtesy of FEMA)

Car sharing has long been considered a green
alternative to owning a car. Both in terms of
expense and the environment. Companies like
Zipcar have made this concept mainstream in
a lot of urban areas. Now some cities are
trying out car sharing with their municipal
fleets. Tamara Keith has more:

Transcript

Car sharing has long been considered a green
alternative to owning a car. Both in terms of
expense and the environment. Companies like
Zipcar have made this concept mainstream in
a lot of urban areas. Now some cities are
trying out car sharing with their municipal
fleets. Tamara Keith has more:

Karyn LeBlanc works in the Washington DC department of transportation, so maybe it’s not surprising that she was one of the first to try out the city’s FleetShare program.

“It’s this one over here, right here, says 6067 is the license plate on it.”

A white Honda Civic powered by natural gas is waiting for her in a parking lot behind a city office.

She went online to reserve the car and it’s expecting her. At least the very smart computer transponder thingie in the front windshield is expecting her. LeBlanc presses something that looks like a credit card up to the device.

“So, we place this right here and you hear that little click and the car opens.”

The tank is full, the keys are inside, and LaBlanc is off and running.

(sound of driving)

“I would say I use fleetshare 2 or 3 times a week for any meeting that I need to go to or that I need to get to. So I go where I need to go. I park it. I go to my meeting. I get back in the car and I go back to the office.”

For people who use Zipcar this process will sound very familiar. The company has simply brought its car-sharing technology to Washington DC’s municipal fleet.

So far DC has about 60 new cars outfitted with Zipcar gear. But here’s the remarkable thing, those 60 cars are replacing 360. How? The new cars are getting a lot more use than the old ones.

“We’re getting up to 71% utilization on all these cars.”

When we spoke to him, Dan Tangerlini was DC’s Deputy Mayor.

We’re standing in the middle of a municipal parking lot. On one side there are empty spaces where the fleetshare cars park – on the other side there are just a bunch of white city cars.

“You see all this white iron around here. All these DC government vehicles that are kind of sitting static because these are assigned to individuals and those individuals don’t have a reason to be in that vehicle right now.”

Tangherlini says this system will save the city about 6 million dollars over the next five years – which is welcome at a time when budgets are tight.

Which might explain why Scott Griffith’s phone keeps ringing. He’s Zipcar’s CEO and says the company is now in talks with 25 cities.

“They all have the same challenges, not enough tax money, too many cars. They do need to move people around during the day and we’re trying to make that happen in the most efficient way.”

But this isn’t just about money. Griffith says when people share cars they end up driving more efficiently. When they have to book in advance rather than a bunch of individual trips they stack all their stops in one trip.

Car sharing isn’t new for cities like Chicago, San Francisco and Philadelphia. They’ve had programs in place for some time where city workers can use cars loaned out by private car sharing companies. They use the same one the public uses.

Eli Masser helped form the relationship in Philadelphia between the city and the non-profit Philly Car Share which he co-founded.

“One of the benefits of car sharing with municipalities or most businesses for that matter is residential demand is in the evenings and on weekends and most business demand and municipal demand is during the day.”

Which means those cars are busy well beyond the 40 hour work week. Critics say this model is far more efficient than what Zipcar is doing in DC. But Masser says there’s an even better model – a hybrid of DC and Philly.

Ideally cities would have a relatively small city-owned fleet of shared cars and even heavy machinery. But most city workers would car-share with the public.

For The Environment Report, I’m Tamara Keith.

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Car Sharing Gets Profitable

  • Through car sharing programs, users rent cars on an hourly basis. (Photo courtesy of Zipcar)

There’s nothing unusual about renting a car by the day.
It’s commonplace at airports nationwide, but for most Americans,
renting a car by the hour is a strange notion. Renting a car by the hour
is often called “car sharing.” Car sharing is good for the environment
because its users only get the car when they need the car. They usually
take buses and bikes to get around. Car sharing has caught on in a few big
cities on the east and west coasts. That’s largely due to the efforts of a pair
of private companies, Zipcar and Flexcar. Now those firms are poised to
expand their operations. The Great Lakes Radio Consortium’s Todd Melby
has this report:

Transcript

There’s nothing unusual about renting a car by the day. It’s
commonplace at airports nationwide, but for most Americans, renting a
car by the hour is a strange notion. Renting a car by the hour is often
called “car sharing.” Car sharing is good for the environment because its
users only get the car when they need the car. They usually take buses
and bikes to get around. Car sharing has caught on in a few big cities on
the east and west coasts. That’s largely due to the efforts of a pair of
private companies, Zipcar and Flexcar. Now, those firms are poised to
expand their operations. The Great Lakes Radio Consortium’s Todd
Melby has this report:


For the past six months, a nonprofit called the Neighborhood Energy
Consortium has had the Minneapolis/St. Paul car sharing market to itself.
The non-profit group has raised about $450,000 to buy 12 cars. Those
energy-efficient hybrids have attracted about 140 people to join the
HourCar program. That’s Hour with an “H.”


(Sound of bus stop and rumble of passing truck)


On this Saturday morning, Mary Solac is shivering at a bus stop, waiting
for a ride to go pick up her HourCar. Despite the obvious inconvenience,
she says it’s worth it.


“You don’t have to worry about insurance. You don’t have to worry
about gas. It’s like okay, I’m paying what I’m paying and I don’t have to
worry about fixing the blasted car either.”


After a short bus ride, Solac does have to worry about more mundane car
concerns… such as scraping the ice and snow off the window.


(Sound of ice/snow scraping on the windshield)


To date, Solac’s only choice for renting a car by the hour has been
HourCar. That’s about to change.


The nation’s largest car sharing company — Zipcar of Boston — is
invading HourCar’s Minneapolis turf. Nearly 50,000 people now take
turns driving about 500 Zipcars, mostly in Boston, New York and
Washington, D.C.


Scott Griffith is the CEO of Zipcar.


“Over the last several years, we’ve really focused on those cities and getting
them past profitability, past the break even point, to prove that at the
metro market level, that we can make money in this business.”


That track record enticed a venture capital firm to invest $10 million in
Zipcar.


Another big new company is also getting an influx of cash. The nation’s
second-largest car sharing company — Flexcar of Seattle — is about half
as big as Zipcar. It too has a new investor: AOL Founder Stephen Case.
He rented a Flexcar, liked it and bought the company.


In Chicago, Flexcar has paired with a local nonprofit to put 47 cars on
the street.


Zipcar, meanwhile, is also trying to get into Chicago. It wants
government agencies in the Windy City to commit to using its cars
before entering the market. The company hopes that happens sometime
this year.


Business professor Alfred Marcus at the University of Minnesota says it’s
not unusual for emerging businesses to seek government help like this.


“To get this sector going, to stimulate it, it makes sense for their to be
some public involvement, but you would hope this could take off on its
own. I think this is transitional – these public and private partnerships,
and that’s very typical when industries start.”


In Minneapolis/St. Paul, the University of Minnesota is guaranteeing
Zipcar a $1,500 per month per vehicle subsidy, but once Zipcar meets the
$1,500 minimum, that subsidy goes away. Zipcar says it expects to do
just that in three months.


At the moment, Zipcar is growing fast. It had revenues of about $15
million in 2005. CEO Griffith says it expects to double that this year, but
Alfred Marcus with the University of Minnesota says over the long-term,
Zipcar faces big hurdles.


Zipcar has only had success in large, densely-populated cities. Its target
market is young people without cars who are highly price sensitive, and
then there’s the question of where to keep the cars. They have to be
conveniently located to the people who might want to use them.


Marcus says that if these start-ups continue to grow, someday they might
be gobbled up by bigger companies.


“The ultimate aim of Flexcars or Zipcars may be to build up a fringe
business, get it going and have a rental car company buy them or have even
have a conventional automobile company by them.”


But the car-sharing company owners say they have other plans. Zipcar
boss Scott Griffith says he’s working on a 10-year plan to make Zipcar an
international company. Flexcar owner Stephen Case says he bought that
firm “to build it” and not to “flip it.”


For the GLRC, I’m Todd Melby.

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