CARSHARING, HOW TO MAKE IT A SUCCES FOR ALL PLAYERS
Corine Derkse
Transport Research Centre
1. INTRODUCTION
It is impossible to imagine life today in the Netherlands without the automobile. It
is now common for almost every household to own one or more cars (CBS '97:
76.2%). This has become an acquired right that cannot be taken away easily
from the Dutch. The success of the car has also had a number of negative
consequences, however. Congestion has worsened the accessibility of
economic and city centers, parking problems have arisen and the environment
has suffered. The strength of the car lies in what. it has to offer - it is there when
you need it, you determine the route to be taken and it takes you from door to
door. In short, it optimally fulfills the transport needs of the individual.
In spite of the dominant role played by the car, its uses are still insufficiently
exploited. Statistics from the Census Bureau show that the car stands still for an
average of 23 hours a day. The idea therefore arose in the early 90s to unlink
the use of the car from its possession, in order to present the car itself as an
alternative, in addition to the existing alternatives. By sharing a car, it can be
used more flexibly and intelligently, while optimally fulfilling the transport needs
of its users.
Shared car use, or carsharing, occupies an important place in government
policy in the Netherlands in the total package of mobility measures intended to
influence demand. These measures reinforce one another and together
influence total mobility in the Netherlands. The different authorities each play
their own role in this so called mobility management. The State is responsible for
mobility on a national scale and the local authorities for their area. Together they
formulate mobility policy.
A recent study has shown that there are 400,000 potential carsharers in the
Netherlands. Carsharing providers and the authorities must take specific
measures, however, to reach this number. This paper contains advice based on
study results on how providers and authorities can stimulate carsharing.
This paper has the following structure:
In chapter 2 is explained what carsharing means after which in chapter 3 the
study set up is reported. The study results are reviewed in chapter 4. The paper '
ends with a synthesis in chapter 5.
47
2. WHAT IS CARSHARING?
The essence of carsharing is unlinking the possession of the car from its use. It
is therefore a system by which several people together use a single automobile.
Participants of a carshadng initiative can use the car whenever they want in
principle, without having to worry about maintenance or recurring expenses.
Carsharing therefore makes it possible to reorganize the current automobile
system.
Six different types of carsharing can be distinguished for private individuals:
1. Local residents, family and friends take the initiative to share a car;
2. People together use one car to go to work (carpool);
3. People incidentally drive together (hitch-hike);
4. Car rental organizations offer special arrangements aside from their regular
car rental, whereby a coupon booklet, for example, can be used for
inexpensive car use (commercial/by-preduct);
5. Carshadng organizations mediate between car rental companies and private
persons (non-profit/core business);
6. Carsharing organizations themselves offer cars to private persons
(commercial/core business).
The study only examined the pretexts and potential for carsharing by private
individuals for organizations that offer carsharing as their core business.
Initiatives of people themselves and carpooling were excluded in this study.
Initiatives for the use of shared cars for businesses, whereby cars are available
at an industrial estate or place of business for business trips during working
hours, is still in its infancy in the Netherlands and were also not included.
To be able to optimally compete with a private car, carsharing must be made
highly attractive to users. A sort of quality mark was developed in the
Netherlands in 1997 to this end - projects that meet a number of requirements
may use the name Autodate. The most important criteda for an Autodate
organization are the following:
• Cars are available to users day and night and can be reserved;
• Users can pick up and drop off a car easily and close to home, i.e. a
neighborhood car;
• Users have the option of short-term use.
The city of Amsterdam has formulated, together with the Autodate
organizations, a number of extra criteda which Autodate organizations must
fulfill. In addition to the above requirements, users must be able to reserve a car
up until 15 minutes before they wish to use it. Moreover, use of the car is not
linked to a minimum or maximum number of kilometers. Furthermore, the price
must be related to the number of kilometers driven or fuel consumption and the
48
duration of the car use, and the user must have a limited deductible. Finally, the
user must have the possibility to rent the car for a longer period.
There are currently 50,000 people in the Netherlands sharing a car together with
their neighbors, family or friends. Around 33,000 persons use a carsharing
organization, 3,000 of which are members of an Autodate organization.
3. STUDY SET-UP
3.1 Study Questions
The Dutch Ministry of Transport, Public Works and Water Management asked its
Transport Research Centre to carry out a study into the potential of carsharing
and pretexts for providers and authorities for stimulating the development of
carsharing in practice. Insight into the supply and demand of carsharing is
essential for answering these questions. The following study questions were
formulated:
1. Who are the (potential) candidates for carsharing and what are their
background characteristics (market characteristics)?
2. Which product characteristics are qualifying for the various target groups for
participation or continuous participation in carsharing?
3. Which pretexts can be formulated for providers and authorities for stimulating
the development of carsharing in practice, given the market and product
cahracteristics?
4. What is the potential size of the market for carsharing, given the market and
product characteristics?
Insight is obtained into the demand for carsharing by means of qualitative and
quantitative studies among users, ex-users and potential users of carsharing.
Interviews were held in Amsterdam and Culemborg for the qualitative research
(group discussions and in-depth interviews). These two cities were specifically
chosen in order to detect a possible difference between different areas.
Amsterdam is the largest city in the Netherlands and has an extremely large
parking problem. Culemborg is situated in a rural area with much fewer parking
problems. Then, a total of more than 1000 persons were interviewed by
telephone in Amsterdam and elsewhere. The users interviewed by telephone
formed a representative sampling among people ages 18 and older in the
possession of a driver's license and residing in Amsterdam or elsewhere. One
interview was held per household.
Insight into the supply of carsharing was obtained by means of interviews with
carsharing providers who form a representative cross-section of providers in the
Netherlands. The results were described based on the so-called 4 Ps marketing
mix: Price, Product, Place and Promotion. The role of Politics with regard to
carsharing was also taken into account.
49
Pretexts can be defined for providers and authorities by comparing people's
motivations for carsharing with the supply offered by various carsharing
organizations.
In order to arrive at a reliable estimate of the market potential, data were used
from the quantitative study held among potential users. Respondents were
asked whether they planned to take part in carsharing in the near future and, if
so, how great the possibility was that they would do so within a year. The market
potential of carsharing was determined based on the percentage of people who
indicated that this possibility was greater than 50%.
Viewed schematically, the research was set up as follows:
SUPPLY
r~s~arch~LlteIratura
Qual
itative
study
---
Groupdiscussions
PolicyAdvice
__~.~Pretexts
MarketpotenUat
Quantitative
study
In-depth interviews I ITeleph°ne
survey
I
DEMAND
4. STUDY RESULTS
In this chapter the study questions are answered. First the demand for and
supply of carsharing are reviewed. Then both the demand and supply are
compared to one another so pretexts for providers can be defined. After
determining the potential of carsharing, the role of authorities in carsharing is
reported.
4.1 The Demand Side
User Profiles
The users and ex-users were generally higher educated with relatively high
incomes. The users derive little status from their car - the car is viewed as a safe
machine. Both users as well as ex-users have more affinity with leftist parties.
Of the carsharing users, only 15% own a private car. An average of 16,000
kilometers is driven with a private car in the Netherlands. The number of
kilometers driven each year with a shared car is around 3,000. It appears that
people who had a car before taking part in carsharing but who got rid of their car
after participating drive considerably less kilometers per year - the difference is
as high as 11,000 kilometers (see below table). The group of respondents that
did not own their private car before participating drive a bit more after
50
participating due to the availability of the shared car. The shared car is used
primarily for recreational purposes.
Kilometers driven annually
before participating in
carsharing
14625 km
2490 km
Kilometers driven annually after
participating in carsharing
Owned car before participating, but not now
3550 km
Did not own a car before participating and do
2820 km
not own one now
Number of kilometers d~ven annually before and after participating in carsharing
Possibilities
The most important reason given by all the groups interviewed for participating in
carsharing was a financial one. Sharing a car is cheaper than owning one. If
fewer than 12.000 kilometres are driven with the own car, carsharing is an
attractive alternative; the recurring expenses of the own car become relatively
high. In Amsterdam, the extremely long waiting list for a parking permit (around 2
to 4 years) plays an important role for participating in carsharing. It is considered
an attractive alternative because of the difficulty of finding a parking space in the
city. Users in Culemborg state that environmental benefits play a role in
considering carsharing. Conscious car use is considered part of this.
Obstacles
A change in the cost was the number one argument given by all groups for
stopping carsharing. Users would reconsider their membership if the
organization would raise its prices, but also if the users would start driving too
much or would need the car too little, as a result of which their subscription fee
would become too expensive comparatively. Ex-users also often ended their
membership due to a changed family situation, i.e. moving to a new city,
acquiring a company car or an addition to the family, therefore making the
ownership of a private car attractive once again.
Organization Satisfaction
Autodate users in Amsterdam are reasonably satisfied in general with the
organization to which they subscribe? Aspects linked to picking up date care, like
the distance to the car and the times the car can be picked up, scored well in
particular. Convenience was considered of paramount importance - the car must
be close to home and be able to be reserved at any given time.
According to the respondents, points of improvement are mostly in the costs and
the amount of care.
In %
More cars/delivery points
Costs/costs of leasing for a longer period
~,laintenancolcleaningldamage
Vlore flexible reservation times
3etter invoicing
Users
45.9
16.9
14.3
11.~
51
IMore car makes
Other
I
I
13.5
29.7
Possible points of improvement for the organization indicated by users in Amsterdam
4.2 The Supply Side
Product
The product offered differs according to the type of organization. The product
offered by the Autodate providers in Amsterdam meets all the criteria placed by
the city, such as the possibility to make reservations and use the car 24 hours a
day. This is not the case (yet) with the mediating organizations. There is also a
difference in the car makes available. Some providers work with one car make
(the Citroen Saxo for example), whereas others offer several different makes
and types - a larger car for longer trips and a small car for in the city.
Location
The Autodate organizations offer the car in the local neighborhoods. Other
organizations work together with car lease companies, where the clients must
pick up the car.
The parking places reserved for Autodate do not yet have a parking status
whereby persons wrongfully parking in the reserved space can be punished by,
for example, having their car towed away. Both providers as well as users
experience this as a nuisance - cars cannot be found because they are parked
somewhere else.
Price
It is difficult to compare the costs of using a shared car at the different
organizations because the product offered differs on a number of points. Some
organizations, for example, offer free kilometers, whereas others do not. Also,
the relation between subscription costs and price per kilometer differs per
organization.
One of the Autodate providers offers two different types of subscriptions. Users
have a choice between a relatively high subscription fee with 300 free kilometers
per year and a lower subscription fee without any free kilometers. In this way,
the organization tries to anticipate the needs of users. The other providers do
not offer any variation in the costs as is already the case with telephony, for
example, in which frequent callers can choose lower subscription costs and high
calling rates, whereas non-frequent callers have the exact opposite
arrangement.
Promotion
In spite of the fact that the providers seem to have a reasonably good idea of the
user profile for carsharing, little is done with this knowledge. They assume that
the product automatically attracts a certain type of person. An exception to this is
one Autodate provider who specifically targets train travelers. Regular users of
52
the Dutch Railways receive a discount on subscription costs. Communication
also takes place to a large extent with this provider via the Dutch Railways under
the slogan, "Sometimes the train, sometimes the car". The other providers do
not direct their communication specifically to a target group.
Providers promote their product by emphasizing the convenience and service
of carsharing, i.e. all the joys without the burdens. The costs and the
environment are generally less emphasized in the communication.
Politics
Increasing parking problems and the rising costs of car use will only increase the
demand for carsharing, providers believe. The providers' future plans therefore
focus primarily on expansion - organizations try to expand the supply of their
cars and number of locations to guarantee better availability of their cars.
Expanding the number of Autodate parking spaces in downtown Amsterdam in
particular is not yet feasible; the enormous scarcity of parking spaces makes it
difficult for the municipality to sell to its residents that the parking spaces are
given to Autodate organizations instead of to the people who have been on the
waiting list for years. Deriving parking status from shared car spaces is also a
political issue.
4.3 Comparing Demand and Supply, Pretexts for Providers
Four important motives why people participate in carsharing emerged from the
study, namely:
1. Cost
2. Convenience
3. Parking problems
4. The environment
The most important reasons why people ultimately stop participating in
carsharing are:
a. Using the shared car too little or too much
b. A changed family situation
If these results are compared to the supply side, it becomes clear that the
current providers do not capitalize on the carsharing market optimally.
Re 1: Costs
A large percentage of users take part in carsharing due to cost considerations the shared car is cheaper than owning a private car because they only have to
pay to use the car. Therefore, if the user uses the shared car a great deal, the
usage costs rise and the shared car can no longer compete with owning a
private car. At the same time, using the shared car too infrequently can lead to
canceling membership to the organization; the subscription costs are too high
comparatively.
When examining the supply side, it appears that the providers do not optimally
use the price instrument. They accept the fact that users cancel their
53
membership due to high costs. With one exception, none of the providers offer
the possibility to choose between different types of subscriptions in order to meet
the desires of users. For frequent users, the possibility to pay higher subscription
costs and lower usage costs could be a reason for holding onto their
membership, for instance. The opposite applies to members who use the car too
infrequently. By offering users and potential users the choice between different
subscription packages, as is done in the telephony market, carsharing continues
to be attractive.
The cost advantage is also scarcely used in promoting carsharing. The
convenience of carsharing in particular is emphasized strongly. Considering the
fact that cost is an important reason for becoming a member of an organization
for carsharing, the financial advantage that can be achieved with carsharing
should be emphasized in the communication.
Along with the aspect of costs there appear to be two "forgotten" target groups.
The first group is comprised of people who already own a car but who drive
fewer than 12,000 kilometers per year. Carsharing appears to be an attractive
alternative to a private car if the car is infrequently used; the recurring expenses
of a private car are relatively high comparatively.
Providers do not currently target this group. By actively approaching the group
of car owners, they could bring to their attention the advantages of the costs of
the shared car over a private car. More specifically, people could be approached
when deciding on whether or not to replace their car. It is precisely at that time
that people are open to alternatives.
The second group concerns people of the lower socio-economic class.
Especially for this group the costs could be a good reason to participate in
carsharing. The current users are primarily well educated with a relative high
income. The car is seen as a machine from which they do not derive their status.
The lower socio-economic class, however, also forms an interesting target
group. It is precisely this group that would consider cost a good reason for
participating. Contrary to the current group of users, this group does derive their
status from the car they drive.
The majority of providers do not currently offer a product from which status
could be derived. By capitalizing on the shared car as a status symbol,
carsharing coutd also be an attractive attemative for the lower socio-economic
class. The fleet of cars would then have to be varied and the target group would
have to be informed in the communication as to the possibility of driving in a
BMW one day and an Audi the next. Naturally the cost aspect should receive
sufficient attention in the communication to this group.
Re 2. Convenience
The convenience of carsharing is a reason for becoming a member of a
carsharing organization. The user does not have to deal with the administrative
red tape of the (rental) car and does not have to worry about maintenance - the
organization takes care of those things. The availability of the shared car has
54
greater flexibility than the rental car. The car is there whenever the customer
needs it in principle.
Autodate organizations anticipate consumer wishes with 24 hour reservations.
Moreover, the cars are located in the user's own neighborhood. The other
carsharing providers should pay extra attention to improving their product.
Interviews with the providers have shown that they are currently working at such
improvements. The organizations that fall short of the Autodate concept, for
example, are considering pick-up and delivery services in order to bring the car
closer to the customer. They are also striving to shorten the reservation times.
Autodate organizations are lobbying at the municipalities for an increase in the
number of parking spaces in order to increase the availability of shared cars.
Convenience also plays a major role in canceling carsharing membership. A
change in the family situation often appears to make it easier to use a private
car. This requires anticipation on the part of providers of the different personal
situations by, for instance, offering the possibility to use the shared car at the
same time every day at minimal cost. Providers should also emphasize in their
communication that the shared car can bring relief in different family situations.
Re 3. Parking problems
The problematic parking situation is often used as an argument for joining an
Autodate organization, primarily in Amsterdam where the waiting periods for a
parking permit are extremely long.
The providers are currently inactive in many of the big cities. They do expect,
however, that the parking problems will increase considerably in coming years. It
is precisely in the strongly urbanized areas where further growth appears to be
feasible. In promotional activities directed towards potential users in big cities it
should be specifically emphasized that carsharing offers the joys of having your
own car without such burdens as finding a parking space and vandalism.
Re 4. The environment
The environment forms another reason for participating in carsharing. By using a
shared car, people use the auto more consciously, resulting in fewer harmful
substances being emitted and fewer cars on the road.
With the current providers, the organization often takes their point of departure
from car use reduction, though the concept of environmental friendliness is not
reflected in the organization itself. The organizations could offer a total product
to this group in which environmentallyfriendly cars are offered and in which
other environment-related activities are developed. In this way, the group is
addressed directly regarding the point of departure they find so important, thus
creating an extra bond with the organization for carsharing.
4.4 Market Potential
Of the respondents, around 20% showed an interest in participating in
carsharing. Six percent of the total group of respondents indicated that they
5:5
would estimate the possibility that they would take part in carsharing within a
year to be 50% or higher. These people form the "likely" group. Two to three
percent of potential users indicated the possibility of their taking part to be 75%
or higher. This latter group can therefore be designated as "highly likely".
Based on the results of the quantitative study, it has been calculated that the
"likely segment" consists of 400,000 households, 20,000 of which are located in
Amsterdam. The "highly likely segment" consists of 200,000 households, 7,000
of which are in Amsterdam (see below table).
Likely segment
(>= 50%)
Percentage of which are highly
likely
(>= 75%)
7,000
193,000
Amsterdam
20,000
Outside of
380,000
Amsterdam
20~000
Total
400,000
The percentage of people that would possibly participate in carshadng
4.5 The Role of the Authorities
Carsharing results in less car use among users without affecting their mobility.
Moreover, participation in carsharing leads to a decrease in car ownership
among users. This gives cause for the central government to stimulate
carsharing. Carsharing will never be a goal in itself for the authorities, but rather
an instrument that fits within the total policy of influencing demand that the
authorities pursue to keep mobility in the Netherlands manageable. The various
authorities each play their own part within total mobility management. The State
is responsible for the mobility issue on a national scale and the local authorities
are responsible for mobility in their area.
The Ministry of Transport, Public Works and Water Management sets the
boundaries within witch mobility can develop so that the negative effects thereof
are kept within the limits. These boundary conditions concern such aspects as
space, health and safety. As a result of decentralization, local authorities are
given more and more instruments within these conditions for managing mobility
in their area. They can choose from a package of mobility management
measures. This package consists of transport demand management, multi
modal mobility, parking policy, public transport, carpooling, bicycling, travel
information, location policy, price policy, teleworking and environmental
planning. Carsharing is also one of the measures, all of which reinforce one
another. Carsharing users, for example, use the car more consciously, as a
result of which such alternatives as the bicycle or public transport are chosen
more often - leading to an increase in train use varying from 7% to 16%.
Bicycling and the use of city transit increase by around 5% to 10%. Parking
policy on its turn also has an influence on carsharing; the extreme parking
problem forms a major reason for users to join a carsharing organization.
56
The authorities have different options for promoting carsharing within total
mobility management:
Municipalities could stimulate carsharing by creating conditions for the providers
that enable them to operate optimally. The municipalities could take on various
roles in practice, varying from an actively controlling role to a purely supportive
one. The more the municipalities support carsharing, the more influence they
could have on realizing policy objectives.
Three roles can be distinguished here, where the difference is in the amount of
activity of the municipalities:
1. The municipality as supporter
The least intensive role that the municipality can play is referring providers
directly to such executive agencies as parking affairs and public relations. This
often concerns municipalities without the means for an active stimulation policy.
The municipalities that purely support do, however, offer such facilities as
parking spaces, but not funds for supporting the initiative.
2. The municipality as player
In this instance, the municipality takes more initiative. It examines at the extent
to which they can offer assistance to the providers in the form of financial
resources for communication or facilities.
3. The municipality as director
In this instance, the municipality is often the initiator of the plans and draws up a
plan of approach containing points of departure and a list of demands. The city
of Amsterdam is a good example of this. The demands they make on the
Autodate organizations have been formulated together with the providers.
Considering the success of Autodate in Amsterdam, other cities in the
Netherlands are now considering adopting the capital's list of demands.
The municipality as director plays a directive role in working out the carsharing
initiative and offers financial compensation for communication and such facilities
as parking spaces or promotion to this end.
The State stimulates carsharing in a direct way by informing its citizens about
the possibilities of carsharing. Eighty percent of the Dutch citizens are familiar
with the concept. To participate in carsharing, people must know exactly where it
is possible, how it works and how much it costs. They should be able to compare
these costs to the actual costs of a private car in order to be able to weigh up the
pros and cons. It is the responsibility of the State to informs its citizens. In
addition, the State concentrates on resolving bottlenecks, among other things, in
the areas of legislation and regulations. By, for example, offering users the
possibility to deduct the costs from their income taxes, membership becomes
more attractive. Finally, it is the responsibility of the State to develop knowledge
regarding the possibilities of carsharing.
5. SYNTHESIS
.5?
To define pretexts for providers and authorities and to arrive at a reliable
estimate of the market potential of carsharing, the Transport Research Centre
formulated four study questions:
1. Who are the (potential) candidates for carsharing and what are their
background characteristics (market characteristics)?
2. Which product characteristics are qualifying for the various target groups for
participation or continuous participation in carsharing?
3. Which pretexts can be formulated for providers and authorities for stimulating
the development of carsharing in practice, given the market and product
cahracteristics?
4. What is the potential size of the market for carsharing, given the market and
product characteristics?
The results of this study show that users of carsharing were generally higher
educated with relatively high incomes. Only 15% own a private car. The number
of kilometers driven each year with a shared car is around 3.000. An average of
16.000 kilometers is driven with a private car in the Netherlands.
Four important reasons are brought out why people (would) participate in
carsharing: the cost, convenience, parking problems and the environment. The
most important reasons why people ultimately stop participating in carsharing
are that they use the shared car too little or too much or that there has been a
chang in the family situation.
To stimulate carsharing, providers must anticipate these motivations and offer
solutions that are attuned to the users so carsharing continues attractive to
them. Providers could for example offer different types of subscriptions to
frequent users and users who use the car infrequently. People's motivations
thereby should be emphasized in the communication.
The different authorities each have their own possibilities for giving shape to
their mobility management and for promoting carsharing. The State creates the
limiting conditions within witch the local governments create their mobility policy,
and stimulate and facilitate carsharing on a national level. Regional and local
authorities focus on facilitating carsharing for providers and users by means of
tailor-made solutions in their area. The local governments can hereby take on
various roles with regard to carsharing providers - from an activety controlling
role to a supportive one.
Within the total package of policies for influencing demand, carsharing can
make a contribution to reducing the number of car kilometers in the Netherlands.
Six percent of respondents declared the possibility that they would participate in
carsharing to be 50% or higher. Carsharing therefore has a market potential of
400,000 persons in the Netherlands. Taking account of the restrictions of statedpreference surveys, this studie shows that if all 400,000 potential users were to
start carsharing, a total car kilometer reduction of around 3 billion could be
achieved.2 The total number of car kilometers in the Netherlands amounted to
190 billion in 1998.
58
Carsharing participants use the car more consciously. They choose to bicycle
or take public transportation more often. By employing carsharing together with
other measures from the mobility management package, a contribution can be
made to manage the growth of car use, while, at the same time, taking into
account the mobility demand necessary for economic growth and social
Participation.
59
Notes
1 The fact that the Autodate concept is not offered in Culemborg does not mean that the users are less
satisfied. Users here, however, do make dear that the distance to the car could be improved, it appears
that users from Amsterdam are more cdtical of the product than those in Culemborg. This is possibly
connected to the more ideological motivation of the latter group for becoming a member as opposed to the
more practical considerations of the residents of Amsterdam.
2 With the calculation of this reduction, the possibility of people buying a new (second) car if carshadng did
not exists, was not taken into account
60
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