Carsharing Growing Around the World with More User-Friendly Options

This article was originally published at Mobility Lab.

OPTION OPPORTUNITIES

Leaders can reach green initiatives and improve traffic if they find ways to promote how carsharing services are becoming more attractive.

Carsharing, which is projected in a new report to grow globally by about sixfold by 2024, is beginning to look like a reliable transportation option in places like the Washington D.C. region and beyond.

“The U.S. has fewer cities than Europe with comprehensive public transit services, which is usually – but not always – a condition for successful carsharing,” said Lisa Jerram, a co-author of Navigant Research’s latest global market analysis and forecast for carsharing.

Why is carsharing growing?

As the cost of a private car, along with the societal costs of endless traffic jams and smog-filled cities, continue to mount, there are new factors that carsharing companies could capitalize on to take even fuller advantage of greater paths to revenue and profitablility, including:

• Making carsharing more like one-way services that have already succeeded, such as ride-hailers Uber and Lyft and bikesharing. In Paris, Autolib’ gained 200,000 members in just three years. And Daimler’s car2go and BMW’s DriveNow have adopted the one-way model.
• Auto companies like Daimler and BMW are helping the carsharing industry in a big way, as their members make up about 1.3 million of the 2.4 million total global carsharing members. They are succeeding because they have deep pockets, which is needed to build comprehensive and reliable coverage and, in turn, membership.
• The rise in plug-in electric vehicles presents a way for carsharing services to differentiate themselves from competitors, allowing the companies to secure tax breaks in the form of zero-emission vehicle credits and helping city officials promote green initiatives like low-emission zones.

Jerram, who co-wrote Navigant’s report with John Gartner, said carsharing “needs visionary city mayors that see the benefits of all these types of new mobility offerings and work to bring them to their cities.”

The authors project that North America will have about 1.78 million carshare members at the end of 2015, Europe will have 1.77 million, and the Asia-Pacific region 1.15 million.

Why would people use carsharing?

There are increasingly more options in the Washington D.C. region, for instance, for people who, in the past, might have asked how they could possibly benefit from carsharing. For example:

• Car2go has hundreds of gas and electric smart cars around the city and was just recently introduced in neighboring Arlington, Virginia. Perhaps the biggest attraction is that car2go vehicles don’t need to pay for parking in metered spaces.
• Zipcar spots are easy to find everywhere either by simply looking into the street or using their mobile app or website. Gas, insurance, and roadside assistance are all taken care of by the company, so using the vehicles is a breeze.
• Enterprise Carshare has a wide variety of models within its fleet and several plans available for infrequent to regular customers.
• Hertz 24/7 appeals to the techies in the crowd, with NeverLost GPS systems and its use of Bluetooth. They allow one-way rentals and even offer truck and van rentals at all Lowe’s home improvement stores.

How are people using carsharing around the world?

From the Navigant report’s executive summary:

“Carsharing as a service has been around since the 1980s, and it began to become a big business roughly 15 years ago. As of 2014, there were well over 40 carsharing companies throughout the world with more than 2.4 million members.

“Global carsharing services revenue is expected to reach $1.1 billion in 2015. The two largest markets will be North America and Europe, which are projected to constitute 83 percent of this revenue. Japan and South Korea constitute a large portion of the Asia Pacific market today and are anticipated to see continued growth. Yet, China is projected to be the largest Asia Pacific market by 2024, driven by concerns over heavy congestion and pollution in urban areas.

“Total global revenue for carsharing services is forecast to reach $6.5 billion by 2024, with the Asia Pacific region taking the largest share at 34 percent. Europe will continue to be a very strong market with an estimated 32 percent of the total. Carsharing services revenue in North America is expected to drop to just 23 percent of the global total by 2024. Latin America and the Middle East and Africa will continue to lag behind in this industry.”

So do these findings mean that people in the U.S. are less thirsty than people in other countries for multiple on-demand transportation options?

Jerram said, “The U.S. has been a good market for carsharing and is a very strong market for ride-hailing services. But I do see Europe and Asia Pacific increasing carshare membership more rapidly than North America through 2024.” She added, “Europe is ahead of the U.S. in adopting a range of smart mobility solutions to minimize pollution and congestion in urban centers and to address climate change.

“The Asia Pacific market simply has more room for growth, especially in China. Although that market is not yet fully embracing this new, on-demand mobility concept, I think it will do so more over time as congestion and pollution problems worsen.”

Jerram did, however, praise the U.S. for doing well already in adopting carsharing and vehicle-sharing overall, “so there is real potential for this market to keep growing.”

This week, the Shared-Use Moblity Center and North American Bikeshare Association are hosting the Shared Use Mobility Summit in Chicago, where policy leaders are discussing these and other new developments in shared transportation options. Check out the hashtag #MoveTogether on Twitter to follow along.

Photo credit: car2go in Seattle, by Flickr user Atomic Taco, Creative Commons