Car Sharing

A few days ago I noticed a tweet by Tim O’Reilly about car sharing. Turns out that GM’s going to use OnStar to let car owners rent out their cars when they’re not being used and Ford is going to contribute cars to ZipCar.

Interesting to see two of the Big 3 getting into car sharing, but both of these pale in comparison with what Daimler is doing with its Car2Go service. The word “disruption” gets thrown around these days like it’s the new “hero”, but Car2Go is genuinely disruptive.


Before explaining why it’s disruptive, a quick primer on how it works. If you live in a Car2Go city (San Diego, Austin and Vancouver in North America), you pull out your iPhone and find a nearby car. You go to the car and start your rental by tapping a car against the window. You then pay by the minute, hour or daily maximum – whichever is cheapest for you.

The system is disruptive for three reasons:

1) You get incredible peace of mind: you don’t pay for gas or insurance so you never have to think about the car itself.

2) You can park the car anywhere (technically anywhere with permit parking or select reserved spots). This is incredible: point-to-point driving; no more returning the car somewhere (GM & Ford – pay attention to this).

3) The price is about a third of a taxi and comparable to the bus.

The price of the car starts at $0.33 per minute, which sounds high until you actually look at your bill.

I frequently get a car to drive to/from work. It takes as little as six minutes and is never more than about eleven. The bus costs $2.50 and a taxi is $12.00 plus tip. If I meet my wife downtown for dinner it’s cheaper to drive home than to take the bus. Even though a ride may cost a bit more than the bus, after I price in my time, the scale tips to Car2Go (even if I have to walk a few blocks to pick up a car).

Here are my rides from last month (your riding history is available online):

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I used a car 16 times last month and it cost me $129.32. That’s an average ride price of just over $8.00.

To put that in perspective, to lease a Smart Car (the same ones used by Car2Go) would cost at least $159/month. My car-owning friends tell me that insurance in BC is about $60/month. And don’t get me started on gas or parking.

I’m saving over 50% versus what I’d otherwise pay, easily a couple of grand a year.

The system isn’t perfect. My driving is being tracked and who knows what that could lead to. Also, as more people discover the service I’m realizing that if I work past 7 pm I’m in a Car2Go dead zone:


But these are small prices to pay.

As a business, it sounds like the service is taking off. Within 100 days of launching in Vancouver, they’d signed up 5,000 people doing more than 4,000 rentals a week at an average rental period of 30-50 minutes. That’s not a great business yet – maybe $3M a year in revenue – but the growth is meteoric: usage is up 4X since launch. This could be a serious business soon.

Car2Go doesn’t release any profit info for Vancouver, but given that every car is identical (and that parent Daimler is also the manufacturer), they’ve easily got the lowest fleet costs of any ride sharing service.

If you’re lucky it’ll be coming to your city soon; it’s definitely changed how I live in mine.