It is a wet, rainy afternoon in Berlin’s Schöneberg district and, beneath the gaze of a great, black gasometer, the employees of the city’s EUREF Campus are ducking the weather for lunch. Nothing would suggest a breakthrough moment in European technology. But, in one of the site’s central buildings, a few dozen execs are discussing one of tech’s most exciting reports – and it’s providing breakthrough data on a little-monitored sector.
Free-floating car share services have become some of tech’s top-talked-about firms in the past couple of years. Offering consumers the chance to pick up, drive, then drop cars at any location in a city, they have added another dimension to urban travel, with some pretty impressive tech to boot.
But while experts have long extolled the virtues of car shares for their traffic-easing and environmental impacts, there has been very little study into their long-term effects in any given place. Which is why the Berlin report, released by WiMobil, an agency working with the local government, was so eagerly anticipated.
Not least because Berlin, Germany’s bustling, tech-hungry capital, has become the platform’s perfect petri dish. Highly-populated but free from the traffic that cripples many European cities, Berlin has a keen combination of overground and underground rail, trams, buses, taxis and even ferries that make it a relatively simple metropolis to navigate.
This, one might reasonably suspect, would make it a sub-prime target of car sharing schemes. Not so, argues Michael Fischer, head of public relations at DriveNow, the BMW/Sixt venture that has quickly acquired 500,000 customers and 9,000 vehicles across nine European cities since 2011.
“The more the transport is mixed – public transport, etc – the more people will sell their own car,” says Fischer. And that’s great for car share firms, which occupy a space between public transport and the personal vehicle. Last month Red Herring reported from Mumbai, where car ownership is a key class indicator. That is no longer the case in many European cities.
“It’s only really in western Europe where the car is not becoming a status symbol any more,” adds Fischer. “In eastern Europe or Asia that’s the one thing you really have to keep in mind: how does the cultural mindset over a car work there?”
DriveNow has had a mixed-bag month. On one hand its European success has continued, with Stockholm added to its repertoire at the beginning of October. Next month, however, its American wing – which, unlike in Europe where it is a joint-venture, is owned wholly by BMW – will pull its services from San Francisco, citing a lack of available parking spaces.
There were 900 parking spaces designated for car-sharing use in the city, and DriveNow couldn’t use one. CEO Richard Steinberg complained that his firm couldn’t find a solution “similar to what we have in existence in our European cities.” Car2Go, which is based in Austin in the U.S., does not operate in San Francisco either – meaning that the metropolitan home of Silicon Valley is without two of transport technology’s most disruptive brands.
I met Andreas Leo, spokesman for Car2Go, Berlin’s oldest free-floating car share firm, at the Schöneberg event. He doesn’t think it’s surprising that Germany has emerged as the industry’s hottest territory. “In Germany car sharing has existed for over 25 years, but it has traditionally come out of ecological activists, who don’t like cars,” he says.
In September the Daimler-owned firm, which has operated since 2008 and has over a million users in 29 cities, began adding Mercedes cars to a fleet hitherto comprised of compact Smart cars.
That may attract users in the U.S., where drivers used to larger cars will likely favor a more prestige vehicle. However one striking thing Car2Go has learned in Europe, is that users don’t really car which car they drive.
“One surprise we found was that we thought people would go a maximum of 500m when they’re finding a car,” he says. “What we found was that the threshold was lower. We also noticed that the people don’t really care what car it is, mobility is key. It’s similar to when you are at a bus stop and you see an old bus coming. You won’t wait for a new one that is better, you will use the old one because you want to go quickly to your destination.”
Car2Go and DriveNow, alongside Citroenand Deutsche Bahn-run Multicity, comprise one of Europe’s most competitive free-floating car share markets. The report – the results of which have taken three years to compile – threw up some interesting facts about the sector’s user base. 75% were men, with most earning an above-average wage.
In Berlin the average car sharing journey was 18 minutes long, with an average distance covered of around 8km. “It was striking in our study that car sharing is used for a lot of recreational activities where you need luggage,” Hermann Blümel, of the State Department for Urban Development, said. Trips to the gym are regularly catered for by car share services.
Environmental effects have been almost impossible to gauge, given the scarcity of car sharing vehicles amid Berlin’s 1.17 million cars. In theory, however, experts agree that car sharing, if more widespread, would alleviate traffic and parking pressure across major cities.
The most astonishing figure Leo has discovered, is that, via a survey of 3,000 users, “37% of customers replied that they had sold a car in recent years, and one of the main reasons was that they were able to use free-floating car sharing. It cannot be the only reason, because we are not the only substitution for your own car – of course not. But it’s one reason.”
As in the U.S., where there are myriad parking laws and politics for free-floating firms to navigate (it was recently reported in Seattle that Car2Go’s customers had racked up 2,200 parking tickets and 200 camera violations in the past year), Europe has its fair share of bureaucratic quagmires.
In London, for example, Car2Go failed to unite the city’s 33 boroughs – getting a green light from just three. The UK capital’s chronic traffic problems, and congestion zone, have also made operating there extremely tough. “We underestimated the complexity of London’s administration,” he admits.
One way around the congestion charge is via electric cars, a progression of car shares that environmentalists, and manufacturers, are very keen to introduce. I spoke to Gernot Lobenberg, director of the Berlin Agency for Electromobility, who has been trying to introduce ways to increase electric travel in Germany’s capital.
Of the 3,200 share cars on Berlin’s streets, he says, around 10% are electric. This is increasing rapidly. “The aim is to strengthen car-sharing companies to introduce electric cars,” he says. “For example DriveNow has 14 (fully electric) BMW i3s, and they will have 100 next year. So they’re changing their fleet to electric.”
Car2Go, too, has been increasing its electric fleet. Its largest is in Stuttgart, which has 500 such cars, followed by Amsterdam and San Diego. But charging infrastructure is still inadequate to cater for large-scale electric driving, says Leo: “It’s the perfect chicken-and-egg situation. You need recharging infrastructure in all parts of the city, not just the center.”
Each charging pole not only costs €10,000 ($11,054), but takes a parking spot, either from a local resident or revenue-generating city space. Each charge costs a driver just €2. This makes political will toward electric charging infrastructure difficult to garner, adds Leo: “In each city there’s a political statement behind it. Cities want themselves seen as green cities which are going for green energy. Many politicians are afraid.”
Lobenberg says that changing attitudes to how cars are fueled must be a part of the conversation on electric cars. “Cars have a range of 100km, and the average usership is 40km maximum,” he says. “So (drivers should) charge overnight; use it like a smartphone.”
In other European cities, finding that political will has been a big challenge. In Berlin, however, which has for years marketed itself as one of the continent’s greenest and most progressive cities, innovation is coming quickly. “The City of Berlin decided to increase public charging structure from about 500 spots, one car at a time, to 900 by the middle of next year,” says Lobenberg.
Copenhagen is DriveNow’s best electric car market right now, says Fischer. But that could soon change. Around half of DriveNow’s i3s must be brought to the company’s offices to be recharged, making their use difficult. But with added charging poles that will surely be a thing of the past. Without having to persuade drivers to actually buy an electric vehicle, sharing schemes may be the perfect way to increase their ubiquity.
DriveNow hopes to have over 400 electric cars – from a hundred now – on Germany’s streets by the end of 2015. And despite maintaining the company’s commitment to North America, Fischer admits that western Europe is car sharing’s “perfect playground.”