Most cities are now familiar with car sharing, in at least one form or another – from professional or even semi-professional services to private sharing. We explore the current landscape and discuss, with an industry insider, how businesses should start implementing car sharing.
Different Types of Car Sharing
Car sharing is becoming increasingly popular. Research suggests that by 2025 almost 18 million people will be using some form of car sharing services. A significant growth from the already existing 6 million users in 2017. UK drivers have an array of car hire options from Zipcar, HiyaCar, Avis and Drivy. The market of car sharing is vast, and the different types of car sharing can differ from one another enormously.
Stationary Car Sharing – The Classic
Stationary car sharing is the classic and most widely available option today. Customers book a vehicle, usually over the internet in advance, and collect the vehicle from a station owned by the service provider. Vehicle pick-up and return are usually at the same station, though many large service providers have stations in multiple cities allowing for a “different city return” option. In most cases car sharing providers determine the cost by the length of the rental and the mileage, whereby costs are incurred per hour and there are fixed rates for mileage. Generally, the renter has to ensure that the tank is about one quarter full before returning the vehicle.
Free Floating Car Sharing – The Flexible Option
In the case of free-floating car sharing, there are no fixed stations. Instead, the bookable vehicles can be picked up and dropped off by the customer within a predetermined area. Using a smart card or a smartphone, a vehicle can be opened and booked at the same time. Some providers allow you to check which vehicles are closest to you. This concept offers a huge amount of flexibility, although it tends to only be possible in big cities. No special reservation is required, and a randomly located vehicle can be booked quite spontaneously. It is important to note however, that the costs are generally higher with this option than with stationary car sharing.
Corporate Car Sharing as an Employee Benefit
Corporate car sharing means the provision of a vehicle by a company for the use of its employees. Effectively, it is the sharing of a ‘company car’. These vehicles are referred to as pool cars. Depending on the company and the sharing model, a pool car is available to a specific pool of employees. This can be based on economic or ecological reasons or even be designed as a form of employee motivation. With regard to taxation in particular, it is important to define whether the vehicles can also be used privately. If this is the case, then there are financial advantages and taxations that both businesses and the employees who are driving the vehicles need to be aware of.
Private Car Sharing
In contrast to the professional options, private car sharing consists of an individual who shares their temporarily unused car. The arrangements can be made via online platforms, which are also responsible for payment and insurance protection. This option often makes economic sense and can be an especially useful alternative in rural communities.
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Developments and Trends in Car Sharing
The exponential growth in and increased popularity of car sharing is likely to continue. It is highly probable that the free-floating model will become an even bigger competitor, whereby stationary car sharing will continue to expand. There are increasing numbers of people who have decided to forego owning a car in favour of car sharing, especially in big cities. It will be interesting to see to what degree car sharing will provide a solution to the imminent problems surrounding traffic density and the environment.
For companies with a fleet of vehicles, car sharing is one option to help utilise the fleet to full capacity. The following interview will cover the advantages to car sharing and how these advantages can be implemented in practice.
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Interview with MoBeWe’s CEO
Car sharing not only makes mobility simpler for ordinary people in their daily lives, it’s practices can also be applied to company fleets. In an interview with the CEO of Weiss, a mobility consulting company, Wolfgang Weiss discusses when it makes sense to implement car sharing and how best to go about it.
1. Why does car sharing make sense for companies?
Mr Weiss: Shared mobility uses vehicles more efficiently, since all the costs can be distributed over more employees and more mileage over time. For example in some cases, employees can be charged for private trips made with company vehicles creating an additional source of revenue. In addition, an attractive shared vehicle with film coating and branding can help with employee recruitment and brand awareness
When a vehicle is available to more employees naturally the vehicle gets more use. If an employee only needs a vehicle during certain hours of the day, the car can be shared with other employees during the remaining hours. That also means that employees can make use of special vehicles as well such as vans for moving or towing vehicles. It is important to note however that this is a benefit available only applicable to pool cars, not with company cars.
Car sharing also comes in the form of carpooling. When employees ride to work together, either in a company car or their private vehicle, it mocks the benefits of using public transit. Additionally it reduces the necessary number of available parking spaces. And naturally, the sustainability aspect plays a huge part in all of this. Environmentally friendly, though initially expensive, vehicles that are better utilised help support a reduction in CO2 emissions.
2. How does a company go about implementing car sharing?
Mr Weiss: First of all, the current mobility needs of the company must be established. Which corporate objectives are met by shared mobility and in what form is this necessary? The project owner should talk to other fleet owners with experience, or else consult an impartial mobility adviser. In this way, he can benefit from valuable experience and get to know the necessary contacts.
One important tip: do not forget to consult your legal team, or whoever might be in charge of employee’s data protection works council from the outset. As a basis, if at all possible, you should make a digital record of current travel profiles and evaluate them, in order to assess the actual needs (frequency, distances, occupation and payload of the trips).
The next important step is to determine which types of mobility, i.e. bicycles, cars, e-vehicles, delivery vans, etc. are necessary and whether all of these should be shared.
Then the fleet manager must consider which necessary processes must be planned and which of these should be carried out later, digitally. This process includes the following aspects in particular:
- Register, activate and deactivate new users
- Driver’s licence check
- Book vehicles
- Vehicle access: keyless, key cabinet, manual distribution
- Vehicle use: Service, cleanliness, refuelling, recharging batteries, damage, workshop, GPS off during private use, delays in pick-up or return
- Support, even at night
- Accounting via cost centre or private invoice, if applicable
- Data protection
- Private use yes/no, tax implications
It is also important to take into account all the internal essential users, such as Finance and Legal. Only once you have done this should you start researching possible sharing solutions and testing them against your own needs. This is followed by validation, pilot phase, adjustments and, finally, implementation.
3. Which practical tips would you like to give to companies that have decided to introduce car sharing?
Mr Weiss: Determine your needs by means of driver profiles and user surveys. Start with simple, practicable implementations and do not aim to introduce a one-solution-fits-all scheme. Talk with experienced fleet owners or advisers from the outset, so that you can get to the bottom of relevant problems and identify your needs and any possible obstacles early on.
When choosing a fleet management solution remember that only what you can see and test is available to you. Planned upgrades to digital solutions may not be available until much later. Also, consider carefully whether an off-the-peg or tailor-made sharing solution is the right one for you. Fundamentally, the cheapest offer is not always the most practicable solution. And have the usability of the solutions assessed by your drivers and users in daily life, without the need for lots of briefings at their locations and according to their circumstances.
4. What tools are required for you to be able to implement car sharing in your company?
Mr Weiss: You’ll want an extremely user-friendly and sophisticated booking solution, possibly with an interface to the fleet management and the mileage tracker. Second, a simple key management solution. A keyless, mobile phone entrance is most ideal because it saves time. Alternative methods such as a key cabinet or manual distribution make it possible to react to different requirements at different locations. Third, consider your claims management and automated support functions available to your business and your drivers. Lastly, consider meaningful reporting and dashboard functions like a mileage tracker, which is important to provide to your tax office. When you can measure your results and determine your ROI, you can better anticipate any problems during company audits.
5. Are there no-go areas or errors that a company really ought to avoid with car sharing?
Mr Weiss: Ignoring the needs of your employees and solutions that are not user friendly. Or if you expect too much and think you are going to get an all-in-one package.
6. Will mobility sharing take the place of the traditional company car in the future?
Mr Weiss: It’s not possible to give a blanket answer to that, since mobility sharing is just one way of guaranteeing more effective and efficient mobility. It is more likely to create a shift away from a personal company car and towards a more efficient, internal mobility based on need. Car sharing is the most effective process for needs-based mobility today and thus the first step on the way to autonomous needs-based mobility in the future.
About the interviewee
Wolfgang Weiss is the CEO of the mobility consultancy company Weiss. He advises companies on mobility and fleet optimisations. He helps to define mobility goals and suggests the right solutions for the company. You will find more information on his website.