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Car-Sharing: Where and How It Succeeds An administrator At least six drivers per car (after one-year start-up time) Adequate accounting practices Ownership by a legal entity Vehicle requirements (e.g. age, safety rating) 2.2A Brief History2 Early Programs Early attempts to establish car-sharing programs can be traced back as far as the 1940s, to the "Sefage" program in a housing cooperative in Zurich, Switzerland, which opened in 1948. Other European programs in subsequent decades included "Procotip" in Montpelier, France, starting in 1971; Witkar, Amsterdam, which opened in 1973; "Green Cars" in various places in Britain in the late 1970s; and "Vivalla Bil" in rebro, Sweden, opening in 1983. In the United States, meanwhile, Purdue University researchers ran the Mo- bility Enterprise program in West Lafayette, Indiana, from 1983 to 1986. In San Francisco, the Short-Term Auto Rental Service (STAR) was established as a demonstration project by a private firm and ran from 1983 to 1985. While all could be considered car-sharing programs, the form and technology used varied considerably. Procotip, an early attempt at using technology to enable members to pay for usage by distance, used in-vehicle "meters" fed by tokens. Witkar used electric vehicles, and users were limited to the city center. The STAR program served residents of a large apartment complex near San Francisco State University. The Purdue University experiment focused on encouraging participants to use smaller, fuel-efficient cars, and reduce their need to own additional vehicles, rather than dispensing with vehicle ownership altogether. Partici- pants were provided with a small "minimum attribute vehicle" for daily trips, as well as access to a shared fleet of special purpose vehicles such as large sedans and station wagons. (Doherty, Sparrow & Sinha, 1987) What these early programs did have in common, however, is that almost all folded after a short period of time, usually within a few years. A range of reasons has been cited for their failures, including inadequate planning, 2. For a more detailed history of car-sharing, the reader is referred to Shaheen, Sperling & Wagner (1998), and Britton (1999b). For more details on the European history of car-sharing, see Harms & Truffer (1998). Much of this section is based on these references. Page 2-5

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Chapter 2 State of the Practice marketing, and financial management; the small size of the service area or membership base; and lack of support from local governments. In many cases, the projects may have been overly ambitious given the technology available at the time (Harms & Truffer, 1998; Cousins, 1999). One of the few detailed post-mortem evaluations to be published examined the STAR service in San Francisco, which had mixed results, the researchers concluded. It was successful from a consumer perspective, and improved the mobility of participants while reducing their auto ownership needs. However, it did not succeed financially, with specific issues including vehicle reliability, a pricing structure that encouraged long- as well as short-term rentals, and a growing number of members who failed to pay their bills. (Cambridge Systematics, 1986) Recent Growth Car-sharing in its current form has its roots in Switzerland and Germany, where programs date back to the late 1980s. The first large-scale car-sharing programs began in Switzerland in 1987 with the independent founding of two cooperatives. These later merged to form Mobility Switzerland, which is still one of the largest car-sharing operators in the world. A year later, in 1988, StattAuto Berlin was founded, and, over the next decade, car-sharing programs began in other European countries, particularly the Netherlands and Austria. By 2004, there were approximately 70,000 car-sharing members in Germany alone, with a further 60,000 in Switzerland. One estimate puts worldwide car-sharing member numbers at 200,000, with a yearly increase of 20-30% (Schwieger, 2004). An estimate from February 2005 suggests that there are about 280,000 worldwide members, with nearly 75% of these in Europe (Shaheen, personal communication). The concept was slower to arrive in North America. The first formal car-shar- ing program began in Quebec City in 1994, with the launch of Auto-Com, the predecessor to Communauto. In the United States, a small operator Dancing Rabbit Vehicle Cooperative opened in 1998, as part of an "eco- village" in Rutledge, MO. The first large-scale US program, CarSharing Portland (subsequently sold to Flexcar), also opened for business in 1998, and the early years saw rapid, almost exponential growth in the number of members, vehicles and organiza- tions (Exhibit 2-3). By December 2004, 61,652 members were enrolled in the United States, sharing 939 vehicles, while 10,759 members and 528 vehicles Page September 2005 2-6

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Car-Sharing: Where and How It Succeeds were enrolled in Canada (Susan Shaheen, unpublished data). Car-sharing in North America is now available in 15 metropolitan regions, plus a number of smaller communities (Exhibits 2-4 and 2-5). Planning is under way in several more, such as Detroit and Minneapolis-St Paul where programs are scheduled to launch in 2005. As of April 2005, Washington, DC was the only region where operators (Flexcar and Zipcar) competed directly for members. Other regions, such as San Francisco and Toronto, have had brief periods of competition. However, both Flexcar and Zipcar have publicly stated that they are looking to expand in new markets, including those where there is an incumbent operator. Exhibit 2-3 US Car-Sharing Growth 75,000 1000 Members 60,000 800 Vehicles 45,000 600 Vehicles Members 30,000 400 15,000 200 0 0 1998 1999 2000 2001 2002 2003 2004 Source: Shaheen, Schwartz & Wipyewski (2004); Susan Shaheen, unpublished data. Note that 2004 data are for December, while 1998-2003 figures reflect June data points, meaning the chart overstates the rate of increase from 2003 to 2004. This report focuses on car-sharing; however, mention should also be made of bicycle-sharing programs. Typically, they allow a user to pick up a bicycle and drop it off at any rack within a defined zone, usually within a downtown. The concept has evolved into technologically advanced "public-use bicycle" systems, which have used electronic locks with card access to address earlier issues of theft. The programs can be operated by a transportation agency, as with German rail operator Deutsche Bahn through its Call-A-Bike initiative, or an advertising firm. The greatest success has been in Europe, particularly Page 2-7

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Car-Sharing: Where and How It Succeeds Exhibit 2-4 North American Car-Sharing Regions (June 2005) Page September 2005 2-8