Energy Transition

What is the future of car sharing?

Drivers queue during evening rush hour on the M4 motorway, in west London, July 20, 2004. Britain's Transport Secretary Alistair Darling unveiled new government transport plans for the next 10 years on Tuesday, announcing car tax and fuel duty could be scrapped and replaced with a system of road charging. NO RIGHTS CLEARANCES OR PERMISSIONS ARE REQUIRED FOR THIS IMAGE REUTERS/Toby Melville  TM/MD - RTR6YPH

Drivers queue during evening rush hour. Image: REUTERS/Toby Melville

Boston Consulting Group (BCG)
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bCar sharing is an umbrella term that covers multiple modes of sharing. It is distinct from ride sharing, which involves being driven rather than driving, and has existed on an informal basis for as long as there have been cars, ultimately evolving into organized taxi services and more recently into new models such as Uber and Lyft. Car sharing includes both B2C offerings and largely informal peer-to-peer (P2P) arrangements. In Europe, the list of players includes, among others, DriveNow and Car2Go, which operate around the globe; Flinkster, which can be found in several European countries; Autolib, mainly covering France; and CarUnity and Tamyca, which are P2P services in Germany. Players in North America include DriveNow and Zipcar, which (along with Car2Go) are global operators, and Turo (formerly RelayRides), a P2P service. In Asia-Pacific there are Orix and Park24 in Japan and, in China, PPzuche, a P2P service, and EVCard, as well as many small players with limited geographic range. Cars may be available at fixed stations—in effect, dedicated parking spots—located around a city, or on a free-floating basis, which allows users to park their vehicle at any legal spot, where it awaits the next user.

Car sharing is taking hold in large urban areas in both the developed and the developing world. Although the largest market is the Asia-Pacific region (including Australia, China, Hong Kong, Japan, Malaysia, New Zealand, Singapore, South Korea, and Taiwan), with 2.3 million users and 33,000 vehicles, Europe (including Turkey and Russia) boasts the largest service per capita, with 2.1 million users and 31,000 vehicles. North America (including Canada and the United States) brings up the rear, with 1.5 million users sharing 22,000 vehicles. Together the three regions account for 2.5 billion booked minutes per year and €650 million in revenues. (See Exhibit 1.)

The car-sharing business has grown rapidly in areas that clear certain social, economic, and demographic thresholds. In Germany, for example, some 140 different services are in operation, controlling a car-sharing fleet that has grown from about 1,000 vehicles in 2001 to more than 15,400 today—about 50% of the total European fleet—with most of the growth occurring since 2011. The customer base has grown from a mere handful of early adopters in 2001 to more than 1 million, again with a sharp increase since 2011. Station-based car sharing is now available in 490 German cities serving a population of 36 million potential users. And 13 cities with a total population of 10 million potential customers are home to free-floating car services.

Yet even in Germany—and particularly in Berlin, one of the world capitals of car sharing and home to an installed fleet of 2,900 vehicles—the service is only one of several mobility options, and far from the most widely used. B2C car-sharing services, operated by either OEMs or new entrants, account for only 0.1% of mobility options, compared with 29.5% for private cars and 12.5% for bicycles. At €4.95, the cost of traveling 7.5 kilometers (the average distance of a car-sharing trip) via a car-sharing service is considerably less than the €18.90 cost of a taxi for the same distance, but more than the €3.45 cost of a private car and the €2.70 fare on public transportation.

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