Should You Become A Car Sharing Operator - Introduction

Should You Become
A Car Sharing Operator?

Introduction
This webinar will answer the following questions Car Sharing
Operators (CSO) need to know:
• What are the revenues and profitability you can expect?
• What are the profitable target markets for car sharing?
• What kind of capitalization do you need?
• What are the considerations starting either from scratch or from an
established car rental business?
Copyright Metavera 2014 – All Rights Reserved

• By the end of this webinar, you will know whether being a Car
Sharing Operator (CSO) is for you
• Presenters have a cumulative 45 years industry experience
and have founded or consulted with:
• Zipcar, Mint + Non Profits
• Hertz, Avis/Budget, Daimler (1-Way), RelayRides
Introduction
David Brook Julian Espiritu

David Brook
David.Brook@team-red.net

• Network of vehicles close
to local demand
• 24/7 vehicle access
• Vehicles rented by the
minute, hour or day
• Rates include fuel,
insurance, parking,
maintenance and
cleaning
• Membership model
What Is Car Sharing?

How Car Sharing Functions
Member reserves
vehicle via
web or mobile app
Car share system
transmits reservation
data to the vehicle
Member accesses
vehicle with mobile
app or smart card
• Vehicles located at self-service locations
• Better customer experience
• Renter’s usage automatically billed to their credit card
• Lower transaction cost for CSO
Technology is the difference!

Round trip
• Neighborhood
• P2P – peer to peer
• College / university campus
• Government / corporate fleet
• Fleet leasing with telematics
One way and point-to-point
• Floating parking
• Station parking
Combination round trip –
one way
Types Of Car Sharing
For profit or non profit business models

Commercial
Car Rental
Hourly
Car Rental
Traditional
Car Sharing
P2P
Car Sharing
Fractional
Ownership
Car sharing
– Alternative to ownership
Differences Between Car Rental And Car Sharing
One-Way
On-Demand
Car Rental
– Supplements ownership

• Europe
• 1987 — StattAuto (Berlin, Germany)
• 1987 — Mobility Carsharing (Switzerland)
• North America
• 1994 — CommunAuto (Montreal, Quebec, Canada)
• 1998 — Carsharing Portland (Portland, Oregon)
• 2000 — Flexcar (Seattle) and Zipcar (Boston)
• 2009 — Car2Go (Ulm, Germany)
• 2010 — Car2Go (Austin, Texas)
• 2014 — Car2Go Black – car rental linked to car sharing
• Asia
• 1997 — NTUC Car Cooperative (Singapore)
• 2002 — Orix (Japan)
• 2003 — GoGet (Sydney, Australia)
• 2013 — Zoom (Bangalore, India)
History Of Car Sharing

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2006 2008 2010 2012
Australia Asia Europe North America Worldwide
Worldwide Growth Of Car Sharing
Source: Susan Shaheen, Transportation Sustainability Research Center, University of California, Berkeley
Members
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2006 2008 2010 2012
Australia Asia Europe North America Worldwide
Vehicles Australia Asia Europe
North America Worldwide
2006 2008 2010 2012
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
2006 2008 2010 2012
800,000
600,000
400,000
200,000
0

• People are moving to cities
• 70% of U.S. population
• Better transportation
alternatives
• Bicycles, walking
• Uber, Lyft, rideshare
• People are driving less
• Peak miles in 2005
• Peak car ownership
Trends Favoring Car Sharing
Source: Michael Sivak, University of Michigan, Transportation Research Institute

Smartphones & apps

• “Millennials” age 16-34 not as
interested in driving
• VMT dropped 23%
• Getting driver’s license later
• Greater indebtedness
• Poorer job prospects
• Value convenience, flexibility
• “Sharing economy”

• New transportation alternatives
• Uber, Lyft (alt. taxis)
• Bike sharing
• Dynamic ridesharing
• Autonomous vehicles

• Users save
• Savings of $2,500 - $5,000 per year compared to ownership
• Less hassle
• Cities are interested in car sharing
• Each shared vehicle offsets 9 – 13 private cars
• 26% of car share members sold their personal vehicles
• 53% avoided purchasing another vehicle
• Reduces member VMT by 20+% (energy & GHG savings)
• Investors are interested in new transportation services

• Car rental companies entering the car sharing market
• OEMs (car manufacturers) entering the car sharing market

Key Customers For Car Sharing
• Demographics
• Prime customer age 21 – 45
• College educated +
• Males and females evenly split
• Medium level income
• Lower rates of car ownership
• Use public transportation
• Geographics
• Located in urban residential-retail areas
• Walkable destinations
• College and corporate campuses

Growth Forecast
• Frost and Sullivan — 2012
• North America “Optimistic” 2020 scenario
• U.S.: up to 7 million members and 155,000 vehicles
• Canada: up to 1.4 million members and 31,000 vehicles
• Growth Projections for North America
• Traditional car sharing = +30% per year
• One-way / On-demand = +48% per year
• Peer to peer = +34% per year
• “10 million people are within a 10 minute walk of existing
Zipcars”
— Scott Griffith, Zipcar CEO 2012

Julian Espiritu
jespiritu@abramsconsulting.com

Car Sharing Compared To Car Rental
Car Sharing Car Rental
Basic Proposition
Alternative to car ownership or people
who don’t own a car
For business trips, vacations, or
insurance replacement
Customers
Urban dwellers and commuters; campus
students and faculty
Corporate and leisure travelers; service
replacement vehicles (loaners)
Usage Model Membership / social driven Transactional
Car Locations Private / public parking locations Airports and rental locations
Access to Vehicles
24/7 self service via wireless & GPS
technology with the use of smart card
and smart phones
Traditional retail location and counters
Pricing
All inclusive pricing with insurance and
gas included for the first 250 kil.
Gas and insurance are optional – up
sold separately
Reservation Duration By the hour or by the day By the day, week, or month

Consumer Value Proposition
Source: Zipcar (http://www.zipcar.com/sf/rates/savings-compare-own)
• Alternative to car ownership
• All inclusive program
• Includes gas
• Includes insurance
• Includes maintenance
• Includes parking
• Pay only for what you use
Car Owner Car Share Member
Car payment $288 included
Finance charges $67 included
Insurance $84 included
Gas $100 included
License, registration &
tax
$49 included
Maintenance $44 included
Parking $175 included
Total: $807/mo
*Monthly cost based on
small
– mid-size car
$149/mo avg
*A couple trips each week
(6 two hour trips & 2 four-
hour trips)

Car Sharing Economics
• Vehicles rented an average of 6 – 8 hours per day
• Renters drive 5 – 7 miles per rented hour
• Average utilization is 35% – 45% for a 24 hour period
• Average monthly RPU is $1,500 – $1,700
Car Share Vehicle Example
Hours per reservation
Revenue per reservation
Revenue per vehicle per day
Average utilization
Average revenue per vehicle (RPU)
8.14
$45.78
$56.35
41.8%
$1,691

• Basic
• Application fee
• Annual membership fee
• Pay as you go
• Monthly drive plans
• Application fee
• Monthly driving plans
• $50 / $75 / $150
• Plans may include roll over
for unused driving dollars
(similar to cellular plans)
• Car share rates
• By the minute
• By the hour
• By the day
• CSO Revenue
• 24 hours
• Hourly transaction
• Multiple reservations
Car Sharing Pricing Models

The Future Of Car Sharing
Europe
$3 Billion +
Asia
$4 Billion +
North America
$3 Billion +

Industry Trends In Car Sharing Are Compelling
• Continued membership growth and early
adoption by young people everywhere
• Significant merger and acquisition
activity
• Ongoing expansion by traditional car
rental companies, automakers (OEMs),
and muti-national operators into car
share
• Development of new apps for car
sharing including; peer-to-peer (P2P),
one-way, and dynamic ridesharing and
transportation networks with cross
marketing opportunities
• Improvements in hardware telematics
systems and software provides safety
and consumer data

Financial Requirements To Become A CSO
Like any other business venture, there is a financial investment
and commitment in launching a car sharing organization
At a minimum you will need the following:
• Vehicles – fleet financing
• Insurance
• Car share technology platform – Metavera
• Expertise – guide you through the process
• Website development – brand development
• Sales and marketing
• Customer service
• G&A (general and administrative expenses)

Is Car Sharing A Business for You?
• Growth potential
• Scalable and relatively minimal start-up cost
• Compliment to existing car rental operations
• Recognizable brand
• Existing customer base
• Sustainable demand growth
• Young and unsaturated competitive field
• Existing infrastructure and back office
• Fully automated 24/7 self-service operation (no rental counter or
location)
• High utilization and RPU
• Emerging applications and business models

Tony Simopoulos

• Try to figure it out on your own
• Takes a long time, you’ll waste money learning the basics
• The market move is now
• Attend our upcoming webinar series
• Research and develop a fundable plan to become a CSO
• Process to effectively deploy as a CSO
• Hire the consultants for 1-on-1 guidance
• Dave Brook, team red US
David.Brook@team-red.net @carsharing_us
• Julian Espiritu, Abrams Carsharing Advisors
Next Steps

Q&A
David Brook
Julian Espiritu
Tony Simopoulos

Q&A
How many vehicles is an optimal number for each parking location?
Each parking location should have a minimum of two vehicles. This gives you a level of
redundancy when one vehicle isn’t available, regardless of whether the unavailability is known
(vehicle has been reserved) or unknown (vehicle is returned late from an earlier reservation).
When you have reached an average daily utilization of 8 hours per vehicle and you have a ratio of
45 – 50 members per vehicle, you should either add another vehicle to that location or establish
another nearby location to add additional vehicles. The minimum most companies use to decide
whether to keep a vehicle at a location is approximately 6 hours per day. Above 12 hours per day
you start to run into issues of vehicle availability.
It’s always important to add vehicles to popular areas. Failure to do so will prevent members in that
area from being able to reserve a vehicle when they need it. A vehicle that is too high in demand
(with no availability) is the same as no vehicle to many of your members since they are unable to
successfully reserve it.
Does Metavera’s technology allow a CSO to look at the profitability and revenue
for each individual vehicle?
Yes it does. Metavera’s Autovera Platform tracks and reports the metrics for individual vehicles, for
types of vehicles and for locations. You can use each of these to manage your business and have
the data you need to be successful.

Q&A
In the presentation it was stated that a CSO needs, on average, 45 members per
vehicle to be successful. Is there a method to determine how many people within
a certain walk-able distance are necessary to achieve a successful utilization rate
for a vehicle?
Market research is key in determining which areas are conducive to car sharing. Factors you look
for are population density, income levels, ages, education (college graduates), car ownership,
licensed drivers, younger professionals vs. family oriented, parking availability (including issues
such as street cleaning hassles and tickets) and public transit choices.
Once you have your market research data analysis, you want to place your vehicles within a 5 – 7
minute walking time of your target members. A ratio of 45 members per vehicle is a solid goal, but
depending on your company’s mission, ratios lower and higher than 45 are successful.
What keeps a car sharing business successful is convenience and accessibility for its members.
Each city, down to the neighborhood level, will differ depending on factors such as what percentage
of members do not own a vehicle as compared to members using car sharing as an alternative to
owning a second vehicle in their household.
The challenge is to strike a balance between the demand (again, within the 5 – 7 minute walking
distance) for each vehicle location with the number of vehicles at each location.

Q&A
What is the average monthly usage per member?
Different members have different needs. For some members car sharing is their family’s second
car and for others it is their only vehicle. The majority of members use a car share vehicle 1 – 3
times. Depending on the type of membership plans your company has in place, in any given month
20% – 30% of your members will not use a vehicle at all. As an example, monthly rentals for the
more active Zipcar members in some areas is 2 – 3 times a month and the average monthly bill for
the whole membership is approximately $75 (in the U.S.).
In areas where car sharing is well established and more popular, the average member spends an
estimated $149 per month on a few hourly trips and some daily usage. Member usage (behavior)
depends on the market. As an example, New York City members will have different behavior than
Washington, DC or college campuses. Thus, New York City has a higher hours per reservation
average than members in Washington DC.
What fleet size should it take for a company to achieve break-even revenue per
vehicle (RPU) with appropriate utilization?
Depending on the type and scope of the car sharing business you wish to create, you can be
profitable (or at least self sustaining) with anywhere from a few vehicles to several hundred. It
depends on the goals of your business and the scale you are looking to achieve.

Q&A
What is the average vehicle utilization rate in hours per day? What is the average
monthly revenue per vehicle (RPU)?
The average utilization is 6 – 8 hours per day. This may seem a bit high, but it includes longer trips
on weekends. Weekends tend to be more a daily rental utilization and weekdays are more an
hourly rental utilization and this brings up the average daily utilization number. Monthly vehicle
revenue (RPU) is $1,500 – $1,700 on a popular vehicle in the U.S.
To help keep your weekday utilization higher, it’s often a good idea to partner with local
organizations and government agencies by offering them a reduced weekday rate.
How do you manage unreported damage to car share vehicles? What policies or
programs can help minimize this?
The majority of dents and dings will not be claimed by members and must be budgeted for. A good
starting point is $40 per month per vehicle. The most important thing is to use social pressure by
repeatedly reminding members to report damage and dirty vehicles.
As an example, in one of the most difficult car rental markets, New York City, the members of
Zipcar were very good at self policing each other. Zipcar is a membership model and members feel
attached to these cars and want to keep them in good condition. They will even report other
members they see abusing the cars. A well managed community of members will go a long way in
reducing unreported damage and how members treat individual vehicles.

Q&A
How do you market car sharing in a new market (even a new country) where
potential users are not familiar with car sharing and its advantages? How do you
communicate to them why they should become a member? What are the key
marketing messages that have been successful?
The most obvious is the cost of owning, maintaining and operating a private vehicle in your target
area. Most privately owned cars, by far, spend the majority of time parked. In urban areas that
have great public transportation systems, the reasons to own a car are greatly reduced.
Surprisingly, most people are not that familiar with all the costs of owning their current vehicle.
Beyond the very basic expenses such as their monthly payment (or purchase price) and insurance
costs, people do not focus on the other expenses (parking, gas, maintenance, damages, parking
tickets) they pay for their car. The total expense is often higher than most people realize.
Membership in a car sharing organization also gives members access to different types of vehicles
they normally would not have easy access to- trucks, convertibles, large cars, SUVs, luxury cars,
vans and similar. People like having more choices and you need to make them aware of this in
your membership marketing efforts.
Earlier car sharing efforts marketed the environmental benefits of car sharing, but more recent
marketing campaigns have focused on what attracts most people to car sharing- saving money,
accessibility and convenience. These three points are the key reasons most people use, or switch
to, car sharing.

Q&A
How many fleet staff do you need for maintaining a car sharing fleet?
This depends on both the size of your fleet and if you outsource some of the work to outside companies.
For example, Zipcar in New York City outsourced the cleaning and maintenance of its fleet. Each vehicle
was serviced every two weeks. But, early on in New York City, Zipcar had two employees on bicycles who
performed this service for their fleet of 25 vehicles. Most car sharing organizations perform this service in
house every two weeks for each vehicle.
For the car sharing organizations who do outsource this function, the typical cost in the U.S. is $50 – $70
per month and this includes cleaning the inside of each vehicle every two weeks, external wash once a
month and light maintenance such as checking tire pressures and fluids. In Europe, it’s more common for
the car sharing organization to perform this service in house with their own personnel and equipment
(such as specially equipped vans). In parts of the world where labor is less costly than Europe and the
U.S. you can afford to do this with your own personnel and less equipment.
A key difference between car rental and car sharing is car sharing members take much better care of their
cars than car rental users do. Car rental users do not care about the vehicles they rent and this increases
the need for servicing of the vehicles as compared to car sharing members. Car sharing members are
aware that the vehicle will not be serviced when they complete their rental and it could very well be rented
to one of their neighbors as soon as their rental period ends. They treat the vehicle better and clean up
after themselves in most cases.
Car sharing members are not the same as car rental customers. They are more of a community, they are
very vocal (both positive and negative) and car sharing organizations market to them and manage them
far differently than car rental companies market to and manage their customers. This community behavior
also acts to police itself and keeps most members more self aware when they use the vehicles.

Q&A
What is the most common (or best) way to ensure drivers are licensed or
legitimately registered to use the car?
There are two issues. One issue is determining the identity and background of the person applying
to be a member. The second issue is if the person driving the car sharing vehicle is actually the
person who is authorized.
In the U.S, Metavera has partnered with Advanced Driving Records (ADR) to provide car sharing
organizations the driving history (and score) of potential members electronically, sometimes within
minutes. Different car sharing organizations have different requirements for membership, often
based on their insurance carrier, and this allows each organization to verify and control who they
allow to access their vehicles. Some organizations require a photo of the person’s driver’s license
when they register.
As car sharing grows in popularity there will be a greater need to verify people, using a variety of
data sources (driving record, social media, credit checks and similar), who rent the shared vehicles,
both to protect from fraud and to enable faster (even instant) approval of memberships.
As far as verifying the person driving the vehicle, this can be more difficult. In Germany, for
example, the member’s RFID tag is attached to their driver’s license. While this issue is a
consideration, it is no different than what traditional car rental companies face when they rent a car
to someone.

Q&A
Why do existing car sharing organizations have so few plug-in electric (battery
only) vehicles?
There are several key factors that limit the adoption of electric cars for car sharing. Higher
acquisition cost (even after government subsidies in all but a few areas), lengthy charging times,
lack of an adequate infrastructure of charging stations and range limitations.
The charging time needed between reservations is an important limitation since it reduces the
availability of electric cars, which negatively impacts their revenue potential as compared to
conventional cars and hybrids.
However, there are several recent start ups in the UK, the U.S. and Europe with all electric fleets.
They have chosen the EV to differentiate themselves from other car sharing organizations in their
cities. They have also been shown to be an attractive option in the one-way / one-demand car
share segment where the trips are much shorter and an EV can be driven 3 – 4 days before
needing to be recharged.
What are the differences in car sharing between Europe and North America?
In Europe, people have access to much better public transportation and better walking and cycling
in cities. Cities are laid out with most essential services much closer to where people live and work,
so people need to use a car less. Consequently, there are more non-car-owning households
compared to North America. However, member demographics, fleet utilization, trip length, etc. are
remarkably similar.

Q&A
For one-way and peer-to-peer (P2P), what are some of the issues that are unique to
these sharing models?
Both service models have their unique challenges. For one-way, the vehicle could end up in an
area where there is no demand for it. At the end of the day (middle of the night) you have to move
these vehicles to get them back to areas where there is demand. This adds cost and makes this
car sharing model more challenging.
We will be seeing some independent one-way car sharing operators entering the market.
An enticing aspect of peer-to-peer is it removes the financial burden of acquiring vehicles. Peer-to-
peer, in combination with company owned vehicles in high demand areas is an attractive model
since it allows you to offer vehicles in less popular (less densely populated) locations where you
might not get even 6 hours of utilization. Also, the revenue expectations of private peer-to-peer
vehicle owners is quite different (lower) than company owned vehicles. A consideration of mixing
these two car sharing models is the challenge in finding appropriate insurance. Acquiring and
managing the private vehicle owners and their vehicles is also challenging.
What are the differences in serving various specialty segments - educational,
business, government and similar?
Most of the differences are in outreach, partner management, marketing and how you recruit the
members of these different groups and organizations.

Q&A
Where do for-profit companies go for funding? What type of formulas work for
non-profits? Schemes that work just for governments?
The choice of business model really comes down to your mission and where you will get your start
up capital from. For-profit companies typically receive capital from investors who expect a return on
their investment. Non-profits typically secure financing from foundations, government grants and
cooperatives that are more focused on the social benefits of car sharing. There are several large,
business like cooperative car sharing organizations in Switzerland and Germany. In North America
they usually look and act more like non-profits. Business loans are another source of capital.
The source of your capital often dictates whether you create a non-profit or a for-profit business for
car sharing. If you are in a large city, you have access to capital through standard investment
channels and in smaller towns you are more likely to create a non-profit company. Government
grants and partnerships with cities can be highly beneficial. Some of the largest U.S. car sharing
companies used government grants to get started (Chicago, San Francisco, Minneapolis,
Philadelphia). Car sharing helps your government agency or local foundation meet their social and
transportation goals by reducing car ownership, reducing vehicle miles driven (congestion) and
lowering parking demand. In the U.S, CMAC (Congestion Mitigation and Air Quality Improvement
Program) has been one of the major sources of this type of funding and is usually administered by
municipal planning organizations. You will need to build a partnership with city government since
they are responsible for acquiring this type of funding from the federal government.

Q&A
Is college and university campus use proving to be a significantly higher risk
profile for accidents and damage?
Not really. There is enough available data to show that car sharing rental has a lower risk profile
than traditional auto insurance policies since the user drives less. This applies to younger drivers
as well as older drivers.
The insurance industry will argue that under age drivers (18 – 21 years old) have a higher risk of
getting into an accident or causing damage to a vehicle. That said, CSOs have implemented
methods to deal with this issue by adjusting their internal policies such as requiring additional
insurance coverage by the member (their insurance carrier acts as the primary carrier) or the
member’s school.
More and more CSOs are launching in university markets. This is by design and critical in targeting
the next generation of car share users.

Contact Us
If you would like to talk to our presenters about becoming a Car Sharing Operator or if
you’d like access to our recent webinar recording on this subject (which this slide deck is
from), please contact them using the information below.
If you would like to be notified when the next webinar in our series on How To Become A
Car Sharing Operator is broadcast, please email us below.
stevem@metavera.com
David Brook
Julian Espiritu

Should You Become A Car Sharing Operator - Introduction

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