The Car Sharing Concept

Daimler claim to have 3.6 million customers and roughly 15,000 vehicles. Could you define the concept of car sharing?

We have to go back a little bit in history, because the model as we know it today evolved over a period of a couple of years with different pilot projects in various cities. We started in a small environment with not a lot of supporting technology just to understand what the typical utilization and rationale of the customer is. How many customers per vehicle do we need to attract?

It became quite clear that two main things are necessary for some kind of success: that's accessibility, meaning it must be very easy to find and access a vehicle; and the other thing is availability. You need to find a sweet spot where you hopefully have enough vehicles on the road so that you can satisfy the demand that you have generated for this new concept. It became clear through these pilot phases that you need urban conurbations of a minimum 500,000 people, just to get going. You need to have enough vehicles on the road so that you can say that they are ‘usually available’ and on the other hand, for the economics to work, you get enough throughput, you get enough people who have the demand for sharing a vehicle. That's why, if you look into the history, there are a couple of cities where Car2go and I think DriveNow as well, tested and then moved out. Copenhagen because it's a typical bicycle city. Stockholm didn't work. London didn't work. London was for other reasons, because of the difficult legislation in London with 35 boroughs, which all have different rules and regulations. You couldn't make Car2go available in all 35 boroughs, so it didn't make sense because Car2Go was a free flow car sharing model, and not a station-based model.

So that means you can use a mobile app or GPS to locate a car and then you use the car for a certain period of time or distance and when you park the car it's within a certain distance of the city?

Correct. You need to define a certain area of operation. So, you want to make sure that you can manage the vehicles. At certain times of the day you have to make sure that you move the vehicles back because, based on the data that you have generated in the past, you know that there are certain peaks in demand in certain parts of your area of operation. The typical thing is that in the morning you want to have as many vehicles as possible in the living quarters of a city. And then people go to work to the city center and you want to make sure that you have an equal distribution. When it comes to the end of the day, you need more vehicles in the city center because people like to use a car to move back.

Is there a manual element to this, in transporting the vehicles and making sure that accessibility or availability is in the right spot at the right time?

There is a manual element to it. You have a certain number of jockeys, as we call them, who move around the city and identify where there is a bundle of vehicles where the number of vehicles that are parked there exceeds the projected demand at a certain time. It's a labor cost. You have to meet these labor costs to make sure you have a relevant accessible number of vehicles.