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Chapter 2 State of the Practice Taxicabs Early car-sharing programs were sometimes referred to as "self-drive taxis," and the most obvious difference between the two concepts is that taxis in- clude a driver. This difference makes taxis suitable for several types of trip that are not permitted or cost-competitive with car-sharing: One-way trips. As discussed in Section 2.5, car- sharing vehicles must usually be returned to the same location where they were picked up. Short-distance, long-duration trips. The user must pay for car-sharing reservations while the car is parked at the destina- tion. This can make taxis more cost-effective for long meet- ings, concerts and other short-distance, long-duration trips. Trips by users who cannot drive. Car-sharing operators are generally selective about their members, requiring a rela- tively clean driving record as well as a valid license, and usu- ally imposing minimum age restrictions of 21 years. Taxis, on the other hand, carry almost all passengers, including those too young to drive, people with disabilities, drivers with sus- pended licenses, and those who are temporarily intoxicated. Out-of-town trips. One of the largest markets for taxis is out-of- town visitors. Car-sharing is less suitable for this group of poten- tial users, since they tend to be unfamiliar with local geography and will not be in town long enough to justify membership. However, the two US car-sharing organizations with operations in more than one region, Flexcar and Zipcar, allow members to use cars in any city. In addition, two nonprofits, PhillyCarShare and San Francisco-based City CarShare, have a cross-usage agree- ment. Vrtucar in Ottawa has similar agreements with AutoShare in Toronto and Communauto in Montreal and Quebec City. 2.5 Current Practice Customer Groups Most car-sharing operators offer services to two distinct customer groups personal users and business users. Personal users join as an individual or household and use car-sharing vehicles for similar purposes as they would a private car. Most car-sharing growth, particularly in the early stages, can be attributed to personal users. Business users join in order to make car-sharing vehicles available to their employees. Businesses may be interested in car-sharing for several reasons (Brook, 2004), to: Page September 2005 2-18

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Car-Sharing: Where and How It Succeeds Replace, partially replace or augment an existing fleet Replace or partially replace car rentals or reimbursement for em- ployees using their own cars Replace subsidized employee parking Provide an incentive not to drive to work, by making a car avail- able for trips during the working day Save on parking charges for employees who drive to work In most cases, business members use car-sharing services in the same way as personal users. However, some operators offer more tailored programs for business users. Flexcar, for example, allows car-sharing vehicles at or near a firm's office to be reserved exclusively for employees of that firm, either during the working day ("semi-exclusive") or at all times ("exclusive"). As well as allowing car-sharing to tap a new market segment, business members have an important role in smoothing demand patterns throughout the day, and allowing operators to maximize utilization. Most companies tend to use the vehicle during the working day, rather than at evenings and weekends when individual demand peaks (for example, Reutter & Bhler, 2000). Pricing Actual rates vary considerably between different operators, and the national operators such as Flexcar and Zipcar charge different rates in different re- gions. However, most charge for usage on the following basis: Per hour reserved. Per mile driven. Some operators bundle a certain number of miles into the hourly rate but charge for additional miles. Monthly or annual administrative charge. Application fee. Penalty fees. These are often assessed for late returns, late cancel- lations, parking vehicles in the wrong location, and other viola- tions of terms of service. (Conversely, some operators provide credits for members who wash the car or undertake other tasks.) Refundable deposit. Not all operators charge this, and some use a credit check instead. For cooperatives, the purchase of a member- ship share generally serves as a deposit. Page 2-19

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Chapter 2 State of the Practice The relationship between these charges is a difficult balancing act, and no pricing structure will benefit all users. A high hourly rate and low mileage fee will benefit those who make longer trips but do not leave the car parked for long periods for example, dropping off a relative at the airport. A low hourly rate and high mileage fee, in contrast, will make shorter-distance, longer-duration trips more cost effective. Similarly, the level of monthly or annual fee will determine how administra- tive costs are allocated between frequent and occasional users, and whether car-sharing is attractive for those who need it as "mobility insurance." When CarSharing Portland introduced a membership fee in 2000, for example, about 30% of the members left. However, revenue changed little, since most were infrequent users (Brook, 2004). Many operators have introduced more sophisticated pricing mechanisms, in order to make car-sharing financially attractive to as many people as possible. Another aim of these different packages has been to maximize utilization, encouraging greater use of under-utilized vehicles and at off-peak times. The different approaches have included: Off-peak discounts. Most operators offer free or discounted us- age at night. For example, City CarShare provides a 50% discount on the hourly fee between 10 PM and 10 AM. Flexcar offers free hourly usage for members on prepaid plans between 11 PM and 7 AM, although mileage charges accrue. Maximum daily rate. Most operators cap the daily rate at a certain level. The Cooperative Auto Network charges a maximum $20 daily rate, and Communauto has a $12.50-$16.50 daily ceiling.3 Zipcar's daily rates vary depending on vehicle and region, but are typically $60-$75. Flexcar designates a certain number of "Free- dom" vehicles each month, for which daily charges are capped at 5 or 10 hours of usage. Different tariffs. Operators such as Vrtucar and AutoShare offer different membership plans depending on frequency of use. Occa- sional users can choose a plan with a low monthly fee and higher hourly or mileage fee, or a higher monthly fee and lower hourly and mileage rates. 3 Note that all prices are expressed in US dollars, using the March 2005 rate of $1.215 Canadian to $1 US. Page September 2005 2-20

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Car-Sharing: Where and How It Succeeds Bundled plans. Flexcar offers plans that provide a certain number of hours and miles for a fixed monthly fee for example, 10 hours and 300 miles for $80 per month.4 These are similar to cellphone plans, in that unused hours do not roll over to the next month, and any additional usage is charged for at a slightly higher hourly rate. Zipcar has similar "monthly commitment" plans, which of- fer discounted rates and waive the annual fee, with extra usage charged at standard rates. Some higher-value plans allow mem- bers to roll over unused credit for one to two months. There is great potential to use sophisticated, differential pricing mechanisms to maximize revenue and utilization, through encouraging usage at off-peak times and at under-utilized vehicle locations. Similar systems are used by most airlines. Differential pricing has also been proposed as a mechanism to rectify vehicle imbalances in systems where one-way trips are allowed (see Innovative Services in Section 2.6). In these cases, cheaper rates would encourage users to pick up a vehicle at a location with a surfeit of vehicles, and return it at another (for example, Schwieger, 2004). On the other hand, such pricing conflicts with the desire to keep rate schedules as simple and comprehensible as possible, particularly in order for consumers to be able to make decisions on the relative costs of car-sharing compared to other transportation modes. Exhibit 2-10 shows some of the different pricing plans offered by different operators. This table is not comprehensive, but rather aims to give examples of how monthly, hourly and mileage rates are packaged in different plans. The exhibit also provides costs for some sample trips. Where a range is given for a single operator, the exact cost depends on the chosen rate plan. Higher-usage rate plans will tend to work out cheaper per trip. The Cana- dian operators have the lowest rates. Of the US operators included in this comparison, Roaring Fork Valley Vehicles in Aspen and, for longer-dura- tion, lower-mileage trips, City CarShare in San Francisco, have the lowest per-trip rates. However, these operators also have higher application and membership fees, which are not considered in the sample trip costs. 4 Rate in Portland, OR as of March 2005. Page 2-21

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Car-Sharing: Where and How It Succeeds Exhibit 2-10 Sample Rate Structures Sample Trips Groceries Airport Hiking Operator Sample Prices (1 hr, 5 miles) (4 hrs, 75 miles) (8 hrs, 25 miles) City CarShare, San Francisco $10 monthly fee, $4 per hour ($2 off-peak), $0.44 per mile $6.20 $49.00 $43.00 Flexcar, Portland Regular Plan $35 annual fee, $9 per hour. Each hour includes 30 $7.00-$9.00 $28.00-$36.00 $56.00-$72.00 miles $0.35 per additional mile Bundled Plan for example, $35 annual fee, $80 per month including 10 hours and 300 miles. Additional hours at $8.50, including 30 miles. Other bundled plans range from $42.50 to $700 per month, including 5-100 hours and 150-3000 miles I-GO, Chicago Regular Plan $6 per hour plus $0.50 per mile $8.50 $53.50-$61.50 $60.50 Bundled Plans - $85-$225 per month, including 10-25 hours and 100-250 miles Roaring Fork Valley Vehicles, Aspen $10 monthly fee, $3.50 per hour, $0.20 per mile. Fixed daily rate $4.50 $29.00 $33.00 of $60 Zipcar, Boston Regular Plan $50 annual fee, $8.50-$12.50 per hour depending $7.23-$8.50 $28.90-$34.00 $51.00-$65.00 on vehicle, plus $0.20 per mile after 125 included miles Monthly Commitment Minimum $50-$250 monthly charge pro vides 10-15% discount, and waiving of annual fee. AutoShare, Toronto Simple Plan $0 per month, $6 per hour, $0.20 per mile $5.31-$6.96 $32.19-$38.77 $39.54-$52.70 Advantage Plan $20.50 per month, $4.30 per hour ($3.50 off peak), $0.20 per mile Communauto, Quebec Plan C $29 per year, $1.65 per hour ($1.20 off peak), $0.37 per $2.64-$3.50 $21.49-$32.71 $18.14-$22.44 mile (first 62 miles of trip), $0.24 per mile (subsequent miles) Plan A $288 per year, $1.65 per hour ($1.20 off peak), $0.20 per mile Cooperative Auto Network, Vancouver High Usage $33 monthly fee, $1.65 per hour, $0.24 per mile $2.84-$4.16 $24.47-$44.33 $19.13-$25.75 Lower Usage $5 monthly fee, $1.65 per hour, $0.50 per mile Source: Car-sharing operator websites, March 2005. All prices in US dollars, using an exchange rate of US$1 = CN$1.215. Note that most operators offer many more different pricing plans than those listed here. Sample trip calculations assume daytime weekend rates with a standard vehicle, and do not include membership fees, reservation fees or other administrative charges. Page September 2005 2-22

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Car-Sharing: Where and How It Succeeds Vehicles Most car-sharing operators provide services with a core fleet of four-door compact cars, such as Honda Civics or the Scion xA. However, most of the larger operators also make a range of specialty vehicles available to their members, for example to haul large loads. Most commonly, these are pickup trucks or minivans. However, Zipcar in Boston also provides higher-end vehicles (at a higher price) such as BMW 325s, and SUVs such as Ford Es- capes, Honda Elements and Toyota Highlanders. The fleet composition for a selection of operators is shown in Exhibit 2-11. Exhibit 2-11 Sample Fleet Composition Operator Core Fleet Other Vehicles Used City CarShare, San Francisco Scion xA Honda Civic/Civic Hybrid Scion xB VW Golf VW Beetle Toyota Tacoma VW Jetta (wagon) Toyota Prius I-GO, Chicago Honda Civic/Civic Hybrid Honda Element PhillyCarShare, Philadelphia Toyota Prius Scion xB Toyota Matrix Toyota Tacoma Roaring Fork Valley Vehicles, Aspen Ford Focus Zipcar, Boston VW Jetta Ford Escape Ford Focus Scion xA Honda Civic Toyota Prius Toyota Matrix Volvo S40 Scion xB BMW 325 Mazda 3 Mini Honda Element Toyota Sienna Toyota Rav 4 EV Toyota Tacoma Toyota Highlander AutoShare, Toronto Toyota Corolla Suzuki Aerio Toyota Echo BMW 3 Series Dodge Cargo Lexus ES 330 Communauto, Quebec Toyota Echo Toyota Tercel Vrtucar, Ottawa Toyota Echo Toyota Matrix Chevrolet Astrovan Source: Car-sharing operator websites, March 2005. Page 2-23

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Chapter 2 State of the Practice Clean-fuel technology has been of particular interest to many car-shar- ing operators. Usually, this has been introduced through gasoline-electric hybrids, which offer improved fuel-economy compared to conventionally fueled vehicles. Most of the larger operators have some hybrids, typically a Toyota Prius or Honda Civic. In the case of PhillyCarShare, hybrids account for half of the fleet. The Dancing Rabbit Vehicle Cooperative in Rutledge, MO, meanwhile runs its fleet on biodiesel, and BioCarShare in Eugene, OR has a single car that also runs on biodiesel. However, a program by Zipcar in Denver, using compressed natural gas (CNG) vehicles, was abandoned due to the limited fueling infrastructure; according to Zipcar, members did not want to drive across town to the CNG station. Battery electric vehicles have also been used, but typically for station car programs and research pilots such as IntelliShare at UC-Riverside, or for limited programs where outside funding has been made available specifically for the vehicles. For example, the IntelliShare research program mainly uses Honda Electric EV+ vehicles. Zipcar has received donated RAV-4 electric vehicles from Toyota, while City CarShare previously operated Ford Th!nk City vehicles following a grant from Weststart-Calstart. Most mainstream operators, however, have been reluctant to place electric vehicles into their fleets, due to higher operational costs, the limited range of the vehicles, and the downtime required for recharging. City CarShare (2005) puts battery electric vehicles in the category of "what not to do" in its guide for starting up a car-sharing organization, due to cost and reliability issues. "In summary, the huge advantages of electric vehicles in terms of emissions reductions have to be set against the cost and practical draw- backs," it says, suggesting that gasoline-electric hybrids may be a better fit for car-sharing at present. Schwieger (2004, p. 127) concurs, pointing out: "The combination of electric vehicle and car-sharing appears as a `dangerous' combination of two difficult topics. The failure of one part determines the fate of the other, despite the fact that they might be successful if they were brought on to the markets as independent products and services." Operators and their partners also face current difficulties in procuring elec- tric vehicles. For example, the planned Montral program a partnership between Communauto, Agence Mtropolitaine de Transport and other agencies is now intending to use hybrids instead. Page September 2005 2-24

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Car-Sharing: Where and How It Succeeds Technology Most earlier car-sharing programs, in both Europe and North America, pro- vided members with universal door keys or relied on the manual, physical "lock box" model of access. For example, the keys for each car might be contained in a wall-mounted safe at each location, which members could access with a master key or personal identification number (PIN). Users telephoned a live operator to make a reservation, and obtained their vehicle key through a self-service, manually controlled key locker. Billing was based on the honor system, with users filling out a trip log including mileage. (Shaheen, Sperling & Wagner, 1998) Even in the late 1990s, manual systems were the norm, and manual key lock- ers are still used in many European countries (Traue, 2001). Recently, how- ever, the largest North American operators along with the newer entrants to the European market have transitioned to automated reservations and access systems. These systems allow the user to reserve a car online; open the doors with a smart card or electronic key fob (or, in the case of Helsinki, Finland, with a mobile telephone); and drive off, sometimes after entering a PIN. Time and mileage are recorded automatically. The development of advanced technology has been cited as one of the key factors allowing the recent growth in car-sharing. Manual systems offer significant disadvantages at scale, such as a lack of accuracy for reserva- tions and billing, and vandalism and theft (Shaheen, Sperling & Wagner, 1998). Automated systems, in contrast, streamline routine tasks particu- larly reservations and allow a smaller staff to concentrate on higher-level functions. The components of modern car-sharing technologies generally include (adapted from MOSES, 2004): Reservation management system. This allows reservations to be made, modified and cancelled. Various interfaces allow access by call center or customer service staff, and directly by members via the web (Exhibit 2-12) and, in some cases, an automated voice-acti- vated telephone system. The telephone service can be particularly useful for extending a current reservation while the member is on the road. Member database. This contains contact information, marketing preferences, date joined, and other information specific to each member. Fleet and parking system. This component identifies the types of vehicles in the fleet, and their locations. Page 2-25

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Chapter 2 State of the Practice Invoicing. Other components. These may include tariff management, a commercial database, performance reporting, emergency manage- ment, system configuration, and so on. Exhibit 2-12. Most North American operators now have advanced web-based reservations systems. These examples are from City CarShare (left) and Zipcar. In addition, each car is equipped with an on-board computer and access control mechanism. These handle functions such as access including, if desired, verifying that the user has a valid registration and recording time or mileage. Some operators also equip their cars with a Global Positioning System (GPS) device, which allows vehicles to be located in the event of theft, late return, or being parked in the wrong location. Despite these general common features, technologies vary markedly be- tween different operators, and there is little standardization to date (see, for example, Shaheen, Meyn & Wipyewski, 2003). There are several competing "off-the-shelf" commercial systems, while some operators have developed their own proprietary technology and in some cases licensed this to other operators. Page September 2005 2-26