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Chapter 3 Market Analysis The second section analyzes the geographic market settings of car-sharing, in terms of the types of neighborhoods where car-sharing has been intro- duced. It provides a qualitative analysis -- based on the existing literature, media reports and identification of existing locations -- and a quantitative analysis of the demographic and physical characteristics around each car- sharing vehicle location ("pod"). Finally, this chapter reviews some previous research forecasting the poten- tial growth of car-sharing and suggests lessons that should be learned and applied to the research results presented here. 3.1 Demographic Market Segments Attracted to Car- Sharing Market segmentation is the identification of distinct groups of customers who share specific characteristics and who are likely to exhibit similar purchasing behavior. Market segmentation can be used to highlight patterns of demo- graphic, spatial, behavioral, and attitudinal characteristics shared by persons who are currently using car-sharing services. These patterns demonstrate which kinds of persons (groups of customers, or market segments) are most likely to be attracted to car-sharing services. These persons can then be the focus of targeted marketing campaigns through which car-sharing operators can position their products and services by developing specifically tailored marketing strategies to appeal to the selected target markets. TCRP Report 36 notes that market segmentation can be used to "improve your agency's competitive position and better serve the needs of your cus- tomers." For the transit industry, market segmentation is said to be capable of providing (Elmore-Yalch, 1998): Increased ridership Improved share of mode choice New customers Better customers More satisfied customers Potentially more "profitable" marketing and service opportunities Market segmentation offers the same potential benefits for car-sharing or- ganizations and their partners. Page September 2005 3-2

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Car-Sharing: Where and How It Succeeds Methodology Web-Based Survey For this study, a web-based survey of current car-sharing members (ap- proved by the study's Project Panel) was conducted in May, June, and July of 2004. The survey questions are provided in Appendix C. All but one of the large car-sharing companies in the United States and Canada encour- aged their members to participate in this survey. (Zipcar, one of the two largest car-sharing companies in the United States, chose not to participate in this survey. Based on information received from Zipcar, and because it is believed that their membership and practices are not substantially different from those of other operators, there is no reason to believe that their lack of participation altered the results of the survey in any specific way.) Because car-sharing is a highly competitive private enterprise (at least in some metropolitan areas), the study team was not provided lists of car- sharing members. Instead, participating car-sharing companies contacted some or all of their members by mail or e-mail and encouraged them to participate. The members contacted were free to participate or not; if they decided to participate, they were instructed to connect to a specific website. No follow-up contacts were made with members who did not participate. Anyone who completed the survey was eligible to be one of five winners of a US$50 credit on their next car-sharing bill. Use of this methodology means that the study team did not control how respondents were selected from or contacted by each company, and there- fore cannot verify that the respondents are statistically representative of the members of each company. However, we do believe that the companies who participated chose potential respondents in a fashion which accurately represented their entire membership. This methodology obviously focuses on individuals who are Internet users, possibly slighting other car-sharing members who are not computer users. But most car-sharing companies now do the vast majority of their reservations over the Internet, so use of the Internet to survey members should not have introduced any significant bias. Page 3-3

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Chapter 3 Market Analysis Results Six companies (four of which were located in the United States) had more than 85 of their members respond to the web-based survey. Nine car-shar- ing companies, five in the United States and four in Canada, had 10 or more members respond, as shown in Exhibit 3-1. Three or fewer responses were received from members of five additional companies. (Thirteen respondents were members of other unidentified companies.) A total of 1,340 complete and valid responses were received, representing nearly 11% of those members contacted by their companies for this survey and almost 5% of the membership of the participating companies. (The majority of members who were not contacted are likely to be inactive ones.) While these response rates are not atypical for Internet surveys using simi- lar methodologies, some caution is advisable in interpreting the results of any survey with response rates in this range because of the possibility that non-respondents may differ from the respondents in ways that are not obvious. Most of the respondents (978) lived in the United States; 362 lived in Canada. The average respondent had been a member of a car-sharing organization for 19.5 months (the median membership period was 15 months). Exhibit 3-1 Companies with More Than 10 Respondents to Car-Sharing Member Survey Company Location AutoShare Toronto, Ontario Boulder CarShare Boulder, Colorado City CarShare San Francisco, California Communauto Quebec City, Montral, Gatineau and Sherbrooke, Quebec Flexcar Seattle, Washington; Portland, Oregon; Los Angeles and San Diego, California; and Washington, DC PhillyCarShare Philadelphia, Pennsylvania Roaring Fork Valley Vehicles Aspen, Colorado Victoria Car Share Co-op Victoria, British Columbia Vrtucar Ottawa, Ontario Page September 2005 3-4

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Car-Sharing: Where and How It Succeeds Focus Groups Focus groups of car-sharing members were held in Boston, San Francisco, and Washington, DC. Five 90-minute focus groups were held with current members in January, February and March 2004. One 90-minute group was held with former or inactive members in September 2004. Participants were recruited from member lists supplied by Flexcar (two groups), City CarShare (two groups) and Zipcar (two groups). Fifty-six persons participated in a focus group. Each focus group member was paid $50 for their participation. Audio tapes were made of each session and the sessions were transcribed. Focus group discussions proceeded according to a Moderator's Guide that included questions on travel using car-sharing (including reasons for using car-sharing and for joining car-sharing, and how life changed for them as a result of using car-sharing); their assessments of the most attractive and least attractive features of car-sharing; what they thought about auto ownership; and their recommendations for improving car-sharing. Participants were instructed not to discuss the benefits or problems associated with particu- lar car-sharing companies. A copy of the Moderator's Guide is included in Appendix C. Focus group participants tended to be extremely positive about their car- sharing experiences, even those who were not currently using car-sharing services. Findings from the focus groups are included in this chapter and in Chapter 4. Demographic Characteristics of Participants Those responding to the web-based survey reported the following demo- graphic characteristics: Age: The mean age of the respondents was 37.7 years; the median was 35 years. (Note that, due to insurance issues, the minimum membership age allowed by most car-sharing companies is 21.) The lowest age reported was 20; the highest was 75. Thirty-nine percent of the respondents were in the 25 to 34 year old age group; 27.4% were in the 35 to 44 year old age group. Canadians were overrepresented in the 25 to 34 year old age group; US members were overrepresented in the much smaller age group of persons under 25 years old. Income: Half of the respondents reported annual household incomes of $60,000 a year or more. Thirteen percent reported annual incomes of $30,000 or less; 18% reported annual incomes of $100,000 or more. Incomes were higher in the US: 20% of the members reported incomes over $100,000 per year, while 12 % of Page 3-5

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Chapter 3 Market Analysis the Canadian members reported such incomes. Canadian mem- bers were more overrepresented in the income groups between US $20,000 and $60,000 per year, and US members were overrepre- sented in the small group of members with incomes under $10,000 per year. Education: A substantial focus on the highest education levels, with 35% holding a Bachelor's degree and 48% reporting some post-graduate work or an advanced degree. Only 2% of these respondents had less than some college education. As expected, respondents with the highest education levels had higher income levels than average. There were no significant differences between US and Canadian members in terms of their years of education. Gender: Slightly more women than men responded to the sur- vey, by a margin of 55% to 45%. However, 52% of the Canadian respondents were male, while 43% of the US respondents were male. Women were more likely to have been involved in post- graduate work than the men in our sample. Race/Ethnicity: Eighty-seven percent were white or Caucasian; 6% were Asian; 4% were "other"; and 4% were black. Three per- cent were Hispanic. Household size: Sixty-four percent lived with at least one other person; the average household size was 2.02 persons. Children were present in 24.4% of households. Canadian car-sharing mem- bers were more likely to live with someone else by a ratio of 71% to 61% for US members. Auto ownership: Overall, 72% of the respondents lived in house- holds with no cars, but 87% of the Canadian members lived in households with no cars, while 66.8% of the US members lived in households with no cars. Thus, the car-sharing members responding to the web-based survey had the following characteristics in relation to car-sharing members in other studies: Their median age was identical to those in other studies. Their incomes are definitely at the higher end of the scale, perhaps even higher than reported in other studies. Their educational levels are definitely at the higher end of the scale, perhaps even higher than reported in other studies. These respondents were slightly more often female than respon- dents in other studies. Racial characteristics and household sizes were essentially the same as those reported in other studies. Page September 2005 3-6

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Car-Sharing: Where and How It Succeeds Thus, the demographic information from our internet survey appears to be quite similar, although not identical, to findings from previous studies. This study employed an internet survey of car-sharing members, which means that respondents were self-selected from contacts originating from the car- sharing companies. It is possible that the results of this survey overrepresent findings from members with higher income and educational levels, since such persons are more likely to own and use personal computers. Offsetting this hypothesis is the fact that many car-sharing companies now strongly promote internet scheduling and reservations. Since actual membership characteristic data are closely held proprietary information, it is not possible to ascertain how closely the survey results represent the actual members of these private companies. Members of specific car-sharing companies had somewhat different demo- graphic characteristics than the averages noted above. It is not clear whether these differences are due to corporate marketing strategies, the demograph- ics of specific localities, or some combination of these and other factors. It is also not certain that the demographic characteristics reported accurately represent the demographic characteristics of all members associated with a particular company. Reported demographic characteristics for companies with the largest numbers of respondents are shown in Exhibit 3-2. More than 85 responses were received from each of these companies. Page 3-7

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Chapter 3 Market Analysis Exhibit 3-2 Reported Demographics of Car-Sharing Companies Demographic characteristics more frequent to that Car-sharing company company than to all respondents in general Company A Age 25 34 Live with someone Males Few car owners Company B Age 35 44; not age 45 54 Females Bachelor's degrees Incomes $75,000 and above More grocery shopping trips Company C Age 25 34 Live with someone Males Very few car owners Incomes $50,000 - $60,000; not $75,000 and over More recreation trips Company D Live alone More car owners Company E Ages 24 and under and 55 and over; not 35 44 Post-graduate education More other shopping trips Company F Age 35 44 Few car owners Bachelor's degrees Incomes $60,000 to $75,000 Note: Companies are not identified by name for proprietary reasons. Previous Research Findings Previous research suggests that factors such as age, income, education, and auto ownership may significantly influence the market segments which are receptive to car-sharing. A meta-analysis of the previous studies is presented in Exhibit 3-3, followed by discussions of individual factors. Page September 2005 3-8

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Car-Sharing: Where and How It Succeeds Exhibit 3-3 Literature's General Consensus Regarding Typical Characteristics of Car-Sharing Members Characteristics Typical Car-Sharing Member Age Mid 30s to mid 40s Income Upper middle class (but real variations here) Education Upper levels (college degree(s)) Household size Smaller than average (1 2 persons) Auto ownership Half own one vehicle Gender Slightly more attractive to males Age Analysts seem to agree that car-sharing is attractive to a relatively narrow age range: Average ages of US car-sharing members are in the mid-30s (Brook, 2004). The 24 to 44 age bracket is overrepresented among Cooperative Auto Network members in Vancouver, BC (Jensen, 2001). Most members of Communauto, Quebec, are in the 30 to 49 age bracket (Robert, 2000). PhillyCarShare members are mostly in the late 20s and 30s (Lane, 2004). Members of car-sharing programs are typically identified as young families (30 to 50 years old) (Hope, 2001). The typical car-sharer in Germany as well as in the Netherlands is of a medium age (31 to 40 years) (Harms & Truffer, 1998). Car-sharing members in Germany, Norway, Switzerland, and Swe- den are described as being middle aged (Klintman, 1998). Average age of car-sharing members in Gothenburg, Sweden is between the ages of 29 and 49 (Polk, 2000). Education High levels of education are the norm: "[High] Education levels seem to be the strongest predictor of whether someone becomes an early adopter" (Lane, 2004). US car-sharing members are highly educated and most have a col- lege degree (Brook, 1999, 2004). High education is a hallmark of Austrian members (Steininger, Vogl & Zettl, 1996). Page 3-9

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Chapter 3 Market Analysis The typical car-sharer in Germany as well as in the Netherlands is well educated (Harms & Truffer, 1998). The average member of the Majornas Car Cooperative in Gothen- burg, Sweden, is a university- or college-educated male or female (Polk, 2000). Car-sharing members in Germany, Norway, Switzerland, and Swe- den are described having a higher than average formal education (Klintman, 1998). Income Median or higher than average incomes are the norm: Income is variable but 31% are in the highest bracket (over $40,000 Canadian) (Robert, 2000). Incomes are near the median for all US car-sharing organizations (Brook, 2004). There are higher than average incomes in Gothenburg, Sweden (Polk, 2000). In Germany, 20% belong to a low-income group; 18% belong to a very high-income group (Harms & Truffer, 1998). Gender Previous literature indicates that, contrary to our survey, car-sharing is more attractive to men: Car-sharing members are evenly divided as to gender (Brook, 2004). Car-sharing members in Germany, Norway, Switzerland, and Swe- den are predominantly male (Klintman, 1998). Car-sharing members show a predominance of well-educated men in Norway (Berge, 1999). Household characteristics There are some substantial disagreements in the previous literature concern- ing household characteristics: Members are evenly divided as to marital status and home owner- ship (Brook, 2004). Members are typified as young families (Hope, 2001). The typical car-sharer in Germany lives in a small household (one to two persons) (Harms & Truffer, 1998). Most members live in a rental apartment with a partner and/or child (Polk, 2000). Page September 2005 3-10

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Car-Sharing: Where and How It Succeeds Review of the Literature The consensus of the previous literature is that the typical car-sharing member is likely to be: Well-educated (college or post-graduate degree) Possessing a higher than average income Between the ages of 25 and 45 From a small household Our survey supports all of these conclusions. The literature also suggests that the typical car-sharing member is slightly more likely to be male, which was not supported by our survey. Behavioral Characteristics The internet survey of car-sharing members provided some information about the behavioral characteristics of car-sharing participants. Behav- ioral information was gathered about trip purpose, auto ownership, trip frequency, expenses, miles driven, and alternatives to car-sharing. Trip Purpose Respondents were asked to report all the different purposes of trips made using car-sharing, the major purpose of the last trip they made using car- sharing, and trip frequencies. The second question allows some estimates to be made of the relative importance of each trip purpose. Responses were relatively evenly distributed and are shown in Exhibit 3-4. Canadian members were more likely to use car-sharing for recreational trips than their US counterparts. Page 3-11

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Chapter 3 Market Analysis Exhibit 3-4 Car-Sharing Trip Purpose % Using Car-Sharing for This Purpose Trip Frequency Purpose On Any Trip* On Last Trip (Trips per Month)** Recreation / social 55.4% 16.0% 1.7 Other shopping 50.9% 16.8% 1.3 Grocery shopping 49.4% 16.2% 1.7 Personal business 44.5% 24.7% 1.6 Work-related 21.2% 12.2% 2.2 Unspecified / other*** 9.5% 11.9% 2.2 To and from work 5.5% 2.1% 3.1 * Multiple responses permitted; therefore, percentages add up to more than 100%. **Frequencies only apply when trips were actually made for that purpose (i.e., zero values are not included). This is particularly important related to trips to and from work, since only 5.5% of respondents made trips in this category. ***Other trips included transporting family and friends (2.5%), moving furniture or hauling large loads (1.7%), medical appointments (1.1%), and visiting relatives (1.0%). Reasons for using car-sharing for particular trips also illuminate important market segmentation information. Respondents to the car-sharing survey reported that their main reasons for using car-sharing for this last trip (up to three responses permitted, so percentages add up to more than 100%) were: Had things to carry 47.8% Needed a car to get to their destination 37.8% Had multiple stops to make 25.8% Cost was acceptable for this trip 24.0% Too far to walk 17.9% More comfortable than other options 16.7% Cost was better than for other travel options16.0% Ease of drop-off [no parking hassles or cost]14.0% Didn't want to use public transit 13.2% Other reasons for using car-sharing for this trip included: Arranging and picking up a rental car would have taken too long Can't get there except by car Car-sharing was faster and/or more flexible than the other options I had to go multiple places in a short time Public transportation was not available for this trip Public transportation would have taken too long Page September 2005 3-12

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Car-Sharing: Where and How It Succeeds Exhibit 3-5 Most Disliked Features of Car Ownership Feature Percent Respondents Cost of insurance and upkeep 38.3% Hassle of owning a car 28.8% High purchase costs of cars 15.9% Parking hassles and costs 9.2% Other factors* 5.2% * Negative environmental consequences and social costs were a large portion of these other factors. Trip Frequency Respondents reported making an average of 3.34 trips per month using car- sharing. The median number of trips per month was two. US members were overrepresented in the lowest trip frequencies (less than three per month); Canadian members were overrepresented in all trip frequencies greater than three per month, but especially those trip frequencies of more than six per month. The number of trips per month varies considerably depending on the trip purpose, as shown in Exhibit 3-4. Monthly Expenses Respondents reported paying, on average, slightly more than $60 per month for their use of car-sharing services. Mileage Driven Respondents reported driving, on average, about 3,850 miles per year at the current time. This figure applies both to shared vehicles and vehicles owned by household members. This is approximately 63% of the mileage that they previously drove, which is a substantial reduction in driving. Alternatives to Car-Sharing If car-sharing services stopped, the current car-sharing members reported that they would: Use transit more often 38.6% Get rides from friends 35.7% Use taxis more often 33.9% Buy a car 30.5% Walk more often 14.8% Other responses 23.1% Page 3-15

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Chapter 3 Market Analysis Multiple responses were permitted, so these percentages add up to more than 100%. Among the hundreds of other (open-ended) responses to this question, the most frequent by far was to rent cars more often (8.2% of all respondents). A surprising number of respondents provided answers that were somewhat exaggerated but imply a sense of loss (be sad, cry a lot, "Die a horrible, painful death," move out of the US, shoot myself, sink into despair, suf- fer). A few suggested that they would "do anything I could to start it up again." A number of people would borrow cars more often, use their cars more often, or not make specific trips. A few thought that there would be no impact on them. Attitudinal Characteristics Car-sharing members are thought to hold strong views about a variety of environmental and social concerns. Respondents to the internet survey were asked a number of questions about such concerns, and their responses generally confirmed the anticipated strength and depth of their feelings: Social activists: Almost half of the 1,340 respondents (48.3%) strongly agreed with the statement that "It's my responsibility to help create a better world." Another 41.5% agreed with this state- ment, creating an overall 89.8% who agreed or strongly agreed. The social activists tend not to be members of any specific demo- graphic subgroup. Environmental protectors: Respondents to this survey of car- sharing members were at least as strongly concerned about envi- ronmental issues, if not more concerned, than car-sharing respon- dents in other studies. When asked about the statement, "I am very concerned about environmental issues," 47.8% said that they agreed and another 39.3% said that they strongly agreed, for an overall total of 87.7% in agreement with this statement. Environ- mental concerns were also voiced in a large number of responses to other questions. The environmental protectors are more likely to be among the oldest car-sharing members (in terms of age, not length of membership) and are slightly more likely to be living with someone else. Innovators: Car-sharing members are thought to be innovators and experimenters. This was confirmed in their responses to the statement "I like to try out new ideas": 30.9% strongly agreed and 55% agreed, for an overall 85.9% agreement. The innovators were more likely to be in the lowest income group and to be under 34. Page September 2005 3-16

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Car-Sharing: Where and How It Succeeds Economizers: Car-sharing members are also thought to be cost- sensitive. This preconception was borne out in their responses to the statement, "Saving money is very important to me" 31.6% strongly agreed and 50.7% agreed with this, for an overall 82.3% agreement. Economizers are most definitely not auto owners; this relationship is very strong. Car-sharing members (at least the economizers) appear to be much more aware of the costs of auto- motive travel than are auto owners in general. Economizers also tended to be under age 34 and in the lowest income group. Not car status consumers: On the other hand, very few car-shar- ing members derive a strong sense of status from their vehicles. With respect to the statement, "The car I drive is an important reflection of my personality," only 2.3% strongly agreed and an- other 14.7% agreed, leading to an overall agreement of only 17%, the lowest of the attitudinal factors measured. Persons who were more likely to agree that their car did reflect their personality were much more likely to own a car. They also tended to have incomes greater than $75,000 per year, and to be between the ages of 25 and 44. Motivations for Joining Car-Sharing Asking why people join car-sharing helps to identify groups of customers who can be targeted by specific messages. This approach is "based on the belief that the benefits that people seek in consuming a given product are the basic reasons for the existence of true market segments... When properly executed, this approach is widely acknowledged as one of the best ways to segment markets" (Elmore-Yalch, 1998). Web-Based Survey The internet survey conducted for this project offered respondents the op- portunity to identify many motivating factors for joining and using car-shar- ing. According to the respondents, their reasons for joining car-sharing were that: They liked the car-sharing philosophy: 81.2% They could eliminate the hassles of owning a car 64.6% They liked having another mobility option 54.1% They wanted to spend less on transportation 35.5% Car-sharing services came to their neighborhood 35.2% They couldn't afford to own/maintain/garage a car 31.8% They were aware that car-sharing was now available 31.6% Multiple responses were permitted, so these percentages add up to more than 100%. Page 3-17

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Chapter 3 Market Analysis Some of the more interesting "Other" reasons, cited in 13% of the responses, included: "As a musician, I needed a way to get to gigs that was flexible, convenient, and inexpensive." "Birth of a son . . . nice to be able to get places by car occasionally with him in tow." "Costs beat renting for a day!" "Friendlier for the environment." "Had my car stolen 3 times. Decided to sell it." "I don't own a car and don't want to, but sometimes I need one." "I want to support this kind of energy efficient, environmentally friendly effort." "Liked having freedom (not asking friends for rides)." "Live in a rural ecovillage that does not allow personal cars." "Reduced us from 3 cars to 1 car plus car-sharing." "Wife left me, took car." Among all the reasons cited, the primary reason for joining was: Eliminated the hassles of owning a car 21.8% Liked the car-sharing philosophy 19.1% Liked having another mobility option 15.5% Couldn't afford to own/garage/maintain my car 14.5% Other reason 29.1% For those who already own cars, they were much more likely to join car- sharing if their employer paid the cost, if their car broke down, or if they liked the overall philosophy. Men were more likely than women to say they joined because they just found out about it or they liked the philosophy; women were more often responsive than men to having their employer pay the cost. People who lived with someone were more likely than those who lived alone to be motivated by employer payments and a car that just broke down. Canadians were overrepresented among the following primary reasons for joining car-sharing: wanted to spend less on transportation, just found out about it, couldn't afford to own / maintain / garage my car, and car broke down or needed extensive repairs. US members were overrepresented in these reasons: my employer pays for membership or other expenses, and car-sharing services came to my neighborhood. Page September 2005 3-18

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Car-Sharing: Where and How It Succeeds Cost savings are the most attractive feature of car-sharing, according to re- spondents (Exhibit 3-6). Environmental and ease-of-use features were also cited by most respondents, but were not the primary attraction. The least attractive features of car-sharing are considered to be costs and, to a lesser extent, the need to make reservations (Exhibit 3-7). The apparent contradiction, with costs considered both the most and least attractive feature of car-sharing, may be explained as the results of different perceptions. Car-sharing may appear cheap to people who have never owned a car, but expensive to those who have owned one for many years. Exhibit 3-6 Most Attractive Features of Car-Sharing % Citing This % Citing As Most Feature Feature* Attractive Feature Less costly than owning a 85.3% 31.9% car The overall philosophy of 78.9% 16.4% car-sharing Helps the environment 77.0% 10.2% Less hassle than owning a 74.9% 16.7% car Can pay for a car only when 74.6% 12.2% using a car Easy to use 60.3% 1.8% Easy to make reservations 57.9% 0.5% Don't have to ask for rides 49.5% 5.2% from others No parking hassles 41.7% 1.7% Reliability cars are there 35.9% 2.0% when I need them Other 4.3% 1.5% * Multiple responses permitted; therefore, percentages add up to more than 100%. Page 3-19

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Chapter 3 Market Analysis Exhibit 3-7 Least Attractive Features of Car-Sharing % Citing As % Citing This Least Attractive Feature Feature* Feature Hourly costs are too high 33.9% 20.2% Mileage costs are too high 26.2% 10.6% Hard to extend the rental time 24.1% 7.7% Have to reserve a vehicle too far in advance 22.1% 7.1% Hard to get vehicles at the times I need them 21.3% 8.8% Distance/effort to get to the vehicle 19.6% 7.1% Hard to get a vehicle when I need it 17.2% 5.5% Vehicles not available close to me 15.9% 6.1% Vehicles not always clean 13.3% 3.2% Membership costs are too high 9.3% 3.0% Billing procedures 7.0% 2.3% Vehicles are in inconvenient / unsafe locations 5.8% 1.2% Vehicles not always in good working order 5.5% 1.2% Vehicles not attractive or not the right size 4.7% 1.4% Hard to get information or reservations 3.4% 0.7% Other 16.7% 13.8% * Multiple responses permitted; therefore, percentages add up to more than 100%. Some very specific complaints (which may not apply in all situations) included: "All trips must be round trips; have to pay for time when car is idle." "Bad for visiting and browsing (when hours are long)." "Can't be spontaneous may not be able to get a car." "Difficult to judge how long to reserve the car I often use it less than the time reserved." "Feel under time pressure while doing errands with a shared car." "Hard to extend rental time because I don't have a cell phone." "Hard to give up a reservation and not get billed for the time." "Must drop the car off where I picked it up." "No guarantee that a car will be there when I need it." "Some car share members do not respect the cars." "The phone system misunderstands me." "Too expensive for a long trip or a long stay at your destination." Page September 2005 3-20

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Car-Sharing: Where and How It Succeeds Focus Groups Participants in focus groups held in Boston, San Francisco, and Washing- ton, DC had similar perspectives on what they considered to be motivating factors for joining car-sharing. Focus group participants reported that the most persuasive motivators for them were that car-sharing: Provided a philosophy that strongly resonated with them Offered them another "mobility option" Eliminated the hassles of owning a car Reduced their transportation costs Became attractive after they moved into a neighborhood where it was available Fills a "mobility gap" for big purchase trips as well as for places and times of day that are not served by transit Some of the specific comments about motivations for using car-sharing were: "It offers the use (and cost) of a vehicle for only those hours needed." "It is more attractive when closely integrated with public transit services." "I feel liberated by not having a car liberation means a combina- tion of having more money and more choices of what to do with that money and no hassles." "I know that sometimes I will need to use a car but car-sharing makes more sense to me in terms of the energy and the environ- ment [than owning a car]." "It seemed like a great idea and I started to feel almost a sense of pride watching it grow. I guess I could identify with the people starting it and wanted to encourage the effort." Previous Research Previous analysts have offered the following observations concerning moti- vations for joining car-sharing. In general, these support the findings from the web-based survey that there are multiple reasons for joining, including economic, environmental and convenience factors: According to Lane (2004), convenience was the most important reason cited for joining (41%), followed by affordability (20%), personal freedom (16%), environmental friendliness (10%), fewer hassles (6%) and improved productivity (2%). Lower-income members were more likely to cite affordability and personal free- dom higher-income ones were more likely to cite convenience. Page 3-21

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Chapter 3 Market Analysis Steininger, Vogl & Zettl (1996) found that motivations of Austrian members for joining (in priority order) were: o Their own contribution to traffic mitigation o Lower car use due to environmental concerns o The desire to have a car available at good value for money o An interest in seeing fewer cars produced o Not being required to produce the effort to care and maintain the car o A desire to drive newer cars which are less polluting According to Harms & Truffer (1998), motivations for joining car-share services have changed over time. In Switzerland, early adopters were ecologically motivated, and the organization had a social value as most members knew one another. Although environmental consciousness is still important, it lost ground to financial and pragmatic motivations as the program grew. Polk (2000) found that, in a study in Sweden, economic and practi- cal reasons were the most important reasons for joining, with environmental, cooperative ideology less important, and social (opportunity to meet others) not important at all. Based on a study in Seattle and Berlin, Schwieger (2004) suggests that US members are more rational about their decision to join car-sharing, while the German members were drawn by emotional reasoning. A survey of Cooperative Auto Network members in Vancouver, BC highlighted a mix of environmental, economic and practical concerns, as shown in Exhibit 3-8 (Jensen, 2001). Exhibit 3-8 Reasons for Car-Sharing Membership: Cooperative Auto Network (CAN) Members Very Reasons Important Important Total CAN is less expensive than leasing or buying 65% 30% 95% a vehicle I'm concerned about the environment 53% 39% 92% Convenience I don't have to spend time or 50% 40% 90% money on maintenance I like the cooperative structure of CAN 20% 55% 75% I wanted access to a variety of vehicles 8% 36% 44% I wanted access to a second car 4% 6% 10% Source: Jensen (2001) Page September 2005 3-22

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Car-Sharing: Where and How It Succeeds Some other reasons that appeared on the CAN survey included: Wanting to support the idea of car-sharing and collective owner- ship Not wanting to own a car Enjoying the reliability of well-maintained and new cars Promoting a non-consumer lifestyle Maintaining driving experience Less stressful than owning a vehicle One recent avenue of research has focused on the "trigger points" that are thought to be important for joining. For example, Brook (2004, p. 4) sug- gests: Member surveys repeatedly indicate that very few people actually sell a vehicle and join a carsharing organization when they first hear about carsharing. In most cases, it appears that people continue their existing transportation patterns, whether they own a vehicle or rely on public transportation, walking or bicycle, until some event in their lives prompts them to consider alternatives. This "trigger event" may be a change of jobs, marital status, moving to a new home (particularly if it's in a new city), etc. For car owners it may be the prospect of major out of pocket costs to repair an older vehicle, failure to pass a required smog test or a major accident. This hypothesis has been tested with extensive qualitative research in con- tinental Europe. In particular, Harms (2003) concludes that car owners have to experience a disruption in their routine behavior before they consider car-sharing. These disruptions might be changes in a person's life situation, or to mobility requirements, opportunities or abilities (for example, the breakdown of a household car). In turn, the disruption of routines fosters a more conscious, rational decision-making state, which is more favorable to the adoption of car-sharing. In Britain, meanwhile, a study of rural car-shar- ing found that 77% of joiners had experienced one of these trigger events, such as moving (25%), selling a car (19%) or changing job (14%) (Carplus, cited in Cairns et al., 2004). A general consensus of the previous studies suggests that primary motiva- tions for joining a car-sharing organization will include the characteristics shown in Exhibit 3-9. Page 3-23

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Chapter 3 Market Analysis Exhibit 3-9 General Literature Consensus Regarding Motivations of Typical Car-Sharing Members Motivations Relative Importance Desire to save money High to very high Concern about environmental issues High to very high Convenience not dealing with maintenance, etc High to very high Changes in one's personal life situation Moderate to high Positive attributes of the car-sharing experience Moderate Work-related conditions Moderate to low Of these motivations, some of the best predictors of car-sharing membership are said to be the desire to save money, concern about environmental issues, and the convenience of not owning a car (or another car). Reasons for Terminating Car-Sharing Memberships For this project, a focus group was conducted with individuals who were no longer active car-sharing members. Members of this group were surpris- ingly enthusiastic about car-sharing and said that they would definitely use it again. "I certainly enjoyed the service while I had it. It was great to have that as an option." Most participants had not actively used car-sharing in 12 months or more, but they kept their membership as a "just in case" kind of insurance: "if something happened to my car, having car-sharing would be fabulous." These focus group participants could be called "pragmatists" in that they had used car-sharing when the specific details of the economics and trip logistics made sense to them and had used other modes when they made the most sense. These individuals had stopped using car-sharing because of a significant life change: Most of these individuals had purchased a vehicle, and this pur- chase was currently providing most of the transportation that they needed. Several individuals had moved their residence to a location less conducive to car-sharing. Marital status changes (often in conjunction with the above rea- sons) accounted for the next most frequent reasons for no longer using car-sharing. There is very little published data on the reasons for terminating car-sharing memberships. One of the few exceptions is AutoShare in Toronto, which has Page September 2005 3-24

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Car-Sharing: Where and How It Succeeds reported about a 20% customer-turnover in its first five years. Reasons for leaving included the following (data from www.autoshare.com): 26% moved out of Toronto 20% acquired a car (e.g. through marriage, inheritance, etc.) 17% reported miscellaneous reasons (not related to service quality/cost) 15% reported that their lifestyle has become completely car-free 12% had to buy a car for a new job 10% felt that AutoShare was too expensive 3% reported that "AutoShare didn't work for me" 2% were inconsiderate and were asked to leave Multiple responses were permitted, so these percentages add up to more than 100%. Summary of Demographic Market Segments Attracted to Car-Sharing From the results of the internet survey of members of car-sharing orga- nizations, the focus groups with persons using car-sharing, and previous literature about individuals likely to be attracted to car-sharing, a general consensus appears to be that car-sharing currently appeals to persons who are: Residents of dense urban areas Highly concerned about environmental and social issues Highly educated Middle to upper income, but still cost-sensitive Not high-mileage drivers Considered to be innovators From smaller households (two persons or less) More concerned with what a vehicle can be used for, less con- cerned with how it looks or its brand name attributes Generally in their 30s or 40s (although this can vary greatly by specific location and other service attributes) Page 3-25