Carsharing competition heats up (and you better watch out)

Paris, France. 19 Mar 2001 8:00 AM

Spring came fast that year at the New Mobility shop in Paris; we were working under pressure to muster world-wide support for the first-ever "Earth Car Free Day" due for 19 April, which we were organizing  with a team from the Earth Day Network. As part of this effort, we wrote a series of articles that appeared in the lively Grist e-mag exploring some less known new mobility concepts and strategies , which you can see here. And of these the most widely read had to do with carsharing and a gentleman from the Mafia. [Please be sure you read Paul Minett's take-no-prisoners comment at the end of this piece.]

Honk: Don Carleone wants into carsharing

Eric Britton reports from Paris, France. 19 Mar 2001 8:00 AM

The phone rattled, and this time it was a voice that I knew all too well. "It's me," the voice rasped, "Don Carleone" (as if I could forget that voice!).

"How's things going, Rico?" (Rico??)

And without waiting for an answer, he said, "Never mind. There's a limo outside waiting to bring you here -- so just leave off whatever it is you are doing and get over here. I gotta talk to you about some of those carsharing guys you told me about last time."

I had almost forgotten that the Don had shown so much interest in carsharing, but I knew that he was into diversification these days. Ever since Bernie dropped out he has been looking around for big numbers.

I'll never forget the first time I mentioned the word "carsharing" to him and saw that he was frowning. It was more than a year ago.

He asked me what it meant, and I tried to explain. (I told him this: Carsharing is what you get when people stop using their own cars and instead use a shared vehicle whenever they need one. Think of it as a very handy short-term rent-a-car that is right around the corner and costs a lot less than owning your own car. It works best if you live in a city that has decent public transport. There are more than a thousand cities around the world today where you can join a carshare club. (See http://www.carshare.newmobility.org/ for details.)

Then I remember I jabbered a lot about carsharing being such a great idea because it represents a terrific first step toward "decoupling" the desire to use a car and the actual ownership of the car -- an important change toward a more sustainable transportation system. And on and on.

Now, the Don is not exactly what you would call "into sustainability," but he did stop me to ask if any of these guys, the thousand (or whatever it was) carshare operations in cities around the world, made any money at what they did. I said that some did and some didn't, but that the operations are starting to become more profitable as they gain more experience.

The Don seemed to like what he was hearing, which was not surprising because he always had liked international opportunities. After a long pause, he said, "Tell me something, Rico. How many cars do you figure there are in the world? And how much do you think those stiffs pay to keep them on the road?"

Of course, I don't like giving the Don answers on anything like that without being able to check it out first by computer, but I took the risk and gave him some ballpark figures. I told him there were something like 800 million motor vehicles on the world's roads, that the annual growth rate of new cars ran anywhere from five to ten percent a year, and that it cost something like $7,000 of a bit more per year to cover all the costs for owning one, at least in the wealthier parts of the world.

The Don is fast. Without losing a minute, he said, "Hey Rico! Have you ever multiplied those numbers together? 'Cause if you do, you are looking at a $5 trillion-plus price tag. That's a lot of zeros And the whole pile is growing at 5/10 percent a year? With that kind of potential I am not even going to miss Bernie."

"But I need to know another thing, too. What part of the world market do you think those carshare guys could eventually corner if they got their act together?"

I had never thought about that before. Let's see. Studies suggest that carsharing becomes a serious economic option for city dwellers who drive less than 5/6,000 miles in one year. Other statistics suggest that, with wide regional variations, this also happens to be the average figure for annual car travel in many places. Putting these two together would suggest that perhaps in good time as much as one-half of the entire world of car owner/drivers might be candidates for carsharing.

I could tell I had the Don's attention and I could see him juggling those numbers and smiling broadly at the same time. A happy man.

He wheezed, "Rico, you've given me a pretty good idea here. I'm even starting to like you. The way I see it, if you think of carsharing as a whole new business, it could account for up to half of all the money that people spend in the world car market — not only for the cars themselves but also for the insurance, parking (and we like parking), fuel, and all the rest. Let's round off. Call it $3 trillion a year. That's a number, ain't it? And I, the Don, want a piece of that market. A big piece!"

That was the last time I had seen the Don, until the phone rang last night. And as I was getting into his waiting stretch limo with the armor plating and one-way bullet-proof glass (the motor was running -- as I said, the Don is not really into sustainability), I tossed my laptop into the car, just in case he wanted more background on this carsharing stuff. With the Don, it pays to get it right the first time.

When I arrived at the great house and entered between the snarling Dobermans and the usual large gentlemen with the sunglasses, I found the Don waiting for me with a glass of wine. That was nice, but I still was wondering what he had in mind.

"Rico," he said, "My boys tell me that you are doing a thing called World Streets or something like that. Is that right?"

What could I say but, "Right, Don."

"And I hear that you are asking all those carsharing guys to get together at some point this summer, maybe one of your lousy Car Free Days, and organize open houses all over the world to invite the public in, and in general cooperate with the big guys in their cities to make sure that the Day works out for you. I got that right?"

I replied, "Right again, Don."

Then he said, "So here's my question, little guy: How many of these guys have already signed on to do this? My boys tell me that things are going a little slowly over there."

"Well Don," I whined, "this sort of thing takes time. We have just recently asked them to get involved, and they have a lot of other things to do to keep their businesses running. But the first groups have already come in, and I am sure that we will have a number of others join in by the time we have actually set the date."

I have rarely seen the Don so mad. "A number of others?" he roared. "Rico, I want ALL of them. This is a trillion dollar business and we need to get moving on it. Tell them that the Don wants in. Or else."

He was really angry, and I think that if you are running a carshare operation anywhere in the world, you would do well to listen to the Don. He is famous for his long arms and short temper. And you can't say that I didn't warn you.

* Note on the above photo of the Don. You probably know that he does not like to have his picture taken for public exposure, but he let me snap this one on the grounds that I would keep working with him on this. You know how it is.

# # #

This was actually inspired by a project we did for Shell earlier that year at a time they were looking into two handfuls of possible business opportunity areas for their company. Carsharing was one of them. We broke up into groups and I had the luck of heading the carshare team. In order to get the idea across we came up with a one minute video in which the Don, rasp and all, was interviewed by a woman on our team who admirably did the CNN bit, mike in hand and vapid smile plastered on her face all the time. The Don was, if I daresay, fearsome and the message was pretty much what you see here.

(And at the end of the day Shell actually got into the carsharing business with a test operation in Germany but later thought better of it. As to the Don, well, we are still waiting.)

Print this article