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August 22, 2007

« Room to Grow | Main | Kids First »

In addition to seeing hybrids all over the place, I see a lot of Zipcars and Flexcars in metro areas. (To be honest, it bothers me that they get reserved spots with no meters in many towns, but I digress.) This new model of car ownership/use, the sharing model, seems to be taking off and many innovative organizations are getting on board.

Equity Residential Properties, a huge publicly traded apartment building operator, recently inked a deal with Zipcar to provide cars and spaces at some of its properties. Today's WSJ (sub req'd) features an article by Darren Everson highlighting how Zipcar is 'driving' into the college market by inking deals with Universities to put cars in and around campuses.

Perhaps Detroit's long suffering car makers should think about this new model of ownership in trying to revive US sales/revenues? With many of the user's of car share services in college and just starting their careers, this seems like a growing consumption trend that Detroit would want to take advantage of?

posted by David

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Comments

Michael Wells

It would take a lot more imagination than the former Big 3 have shown before. They've mostly just gotten out of money-losing fleet deals with car rental companies, which means I can now rent Japanese and Korean cars. My recent few year's experience with Avis/General Motors cars, poorly designed and clunky, didn't encourage me to buy American. I doubt that Detroit cars would be a selling point for Flexcars.

An old friend is the local CEO of Flexcars, recently bought by the Seattle company. My impression was the market was middle-aged downsizers rather than college kids, but maybe it is in other cities. Portland's not a big college town.

The parking spaces is because they're left on the street for the next user to pick up. It might be many hours or over a day before a car is used again, so parking meters aren't set up for their use.

Wendy

In Vancouver shared cars are popular with a couple of groups. One are people who philosophically do not want to own a car -- they cycle, take transit, walk, and often work from home. But they may have reasons to need access to a car a couple times per week. Many of these people might be described as aging, semi-hippie baby boomers who might also be part of the bohemian scene.

The second group that uses shared automobiles a lot are younger people who live downtown. Several new condo towers have come with a membership to a shared automobile network (whether zipcar or a local competitor), and shared cars are parked in the building. For people who live and work downtown, and only want a car occasionally on weekends, this can be a good option.

Many couples and families living downtown own just one car; a membership in a shared car network makes another vehicle available should both people need to be in different places at once that require driving.

I haven't looked at the vehicles closely recently, but I recall there being a reasonable mix of US-brands (GM, Ford, etc.) and Asian ones.

DJM

Michael,

I am even thinking about something beyond fleet sales; I am wondering if they actually go into the service provision? Whereas they have gone into financing big time; perhaps they go into car share service provision itself; or use their dealerships in metro areas to serve as 'flexible' or 'just in time' inventory for car share services? Or each dealership could set up a share program for its local community?

It is early in this market and more permutations are sure to arrive, but this is a new 'ownership' model in the business and Detroit should explore it.

I think that is where the money is... the high per hour cost of ownership on a car share.. that sure as heck beats 0% financing. While volume may be lower, margins are likely higher.

Care shares are kind of out of the big three's wheelhouse, but they don't do well in their core competencies anyways...

Hayden

I'm 35 years old, single, live in a renovated urban house and earn a decent wage as an attorney-partner/law professor; and am surrounded by like-minded similarly situated young men and women. Most of us are on our 3rd or 4th luxury car, having been spun through the great marketing machines out there. Most of us would very much prefer to garage our stylish cars during the week and drive more utilitarian cars regularly (the daily bread); and only when necessary. We would be easily sold on the concept of a disposable (to the user) car. Even better if it came with a driver. Indeed, if someone rolled-out an affordable net-jet-esque town-car-with-the-driver program, we would be ALL OVER IT! Especially during evenings where our lives revolve around happy hour networking events where alcohol is served and expected to be imbibed.

Michael Wells

David,

Wow, it would take a LOT more imagination than Detroit has shown, but I think you've got a great concept. It's a conceptual jump, but the dealers already do leasing and this is similar. If the car companies had a vertical market, they could actually make money on the cars two or three times -- carshare or lease, selling them used after a couple of years, and service. And since they're moving away from fleet sales to the rental companies, why not take them on too?

Now if GM could only make cars where the headrest doesn't contort your neck. They peaked in their old core competencies in about 1955 and have been out of fresh ideas since.

Rebecca Thorman

I use a local service called Community Car in Madison and don't own a car. I'm a young professional living downtown.

I think the potential for this idea is enormous. Car sharing is good for so many reasons..

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