Car Sharing Picks Up Speed | Business| Economy and finance news from a German perspective | DW | 24.08.2005
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Car Sharing Picks Up Speed

Once the domain of the decidedly “green” crowd, the concept of car sharing is finding more fans in the mainstream. They want the convenience of a car, but less hassle and expense.


Car sharing is an idea whose time, many think, has come

Helen Groumas, a 36-year-old professional in Cologne, likes not having a car. She avoids gasoline bills, parking headaches and repair costs. The city's public transportation system allows her to easily commute to her job in Bonn. But there are times when a car would come in handy, such as for a shopping trip to Ikea.

Not relishing the thought of schlepping a bookcase on the streetcar, she picks up the phone, calls the car sharing service she's a member of, and reserves some wheels for the afternoon.

"I'll say I want a car in half an hour, from 11:30 to 1:30," she said. "They'll check if one's available, which it usually is, and I walk down the block to pick it up."

A few minutes from her apartment door, her car sharing company, Cambio, has a small lot with several cars usually parked on it. Groumas opens a lockbox with a card she has, punches in a code number, and grabs the keys to one of the cars there. Thirty minutes after she made her reservation, she's behind the wheel.

"It works really well," she said. "You always have a car in tip-top shape when you need it."

Autoverleih für Stadtbahnfahrer Car sharing

Car sharing in Hanover

Car sharing is nothing new; the concept has been popular with environmentalists since the mid 1980s. But as gasoline prices continue to climb and cities grow more congested, car sharing is becoming an attractive alternative to car ownership for increasing numbers of people, especially in Germany.

Healthy growth

BCS, a federal umbrella group for car sharing companies, reports growth rates of around 10 percent annually over the last decade. Right now, some 80,000 people use car sharing services in more than 250 municipalities across the country. Only Switzerland, where the car-sharing movement began, reports higher rates of usage.

"You do without your own car, but you always have a car at your disposal," said Martin Stutzbach, director of BCS association. "One advantage to that is price transparency, since you always know exactly how much it's going to cost to drive. If you don't want the costs, you don't call the car sharing company. With your own car, you have the expense even if your car is just sitting there."

In Berlin, a member of GreenWheels, Germany's oldest car sharing company, pays three euros ($3.65) an hour for a compact car and 10 cents per kilometer driven. If the client checked the car out for three hours and drove 40 kilometers (25 miles), the total bill would come to 13 euros.

Smart mit Katze Grisu

"Car sharing used to be a very alternative kind of idea and was marketed as such," said Birger Holm, a director with GreenWheels in Berlin. "But now we focus on the cost-savings aspect and not just on the environmental theme since most clients want to save money."

Filli n g the gap

Car sharing works particularly well in Germany because of the extensive and reliable public transportation networks in most German cities. It's not meant to be the primary form of transport, but part of a larger urban transportation strategy that can fill the gap between private car ownership and buses and subways. Some companies are setting up partnerships with local transportation networks and businesses. GreenWheels will drop the monthly fee if a customer has an annual subscription for the bus and train system.

Urlaub auf der Autobahn

Advocates point out that car sharing cuts down on traffic snarls in cities and reduces pollution to some degree, although actual statistics are not available. Studies suggest that one shared car replaces between four and ten private cars. The European Union, in a report released in January, estimated that half a million private vehicles could be replaced by car sharing.

One of the main criticisms leveled at the concept is that of convenience -- of stepping out of your front door and hopping into a car in minutes. Car sharing companies are quick to point out that, especially in larger cities, the network of parking lots where cars can be "checked out" is dense and there is usually no waiting time. There are 50 check-out stations in Berlin and GreenWheels plans on doubling that in the near future.

"It's often a question of: 'Do I have to walk 100 meters (about 100 yards) to the right or 500 meters to the left in order to pick up my car?'" Stutzbach said.

Car sharing and Germany may seem a natural fit due to Germans' traditional concern for the environment. This is a country, after all, in which you can be fined for not separating your trash for recycling.

Autoverkehr Auspuff Abgase

But in fact, due to congestion problems and advances in technology, countries around the globe not considered particularly "green" are investigating car sharing -- in southern Europe, Asia, and even car-crazed North America. Shell Oil has launched a car-sharing division and currently operates in 20 German cities.

Niche sector

Whereas it's an industry that is in its teenage years in Europe; in the US, it's not yet out of the toddler stage. Many analysts wonder if it will ever completely enter the mainstream or remain more of a "boutique" industry in some cities among certain environmentally conscious consumers.

"I'm very sure that it will remain a niche sector," said Ferdinand Dudenhöffer, director of the Center for Automotive Research in Gelsenkirchen.

"Car sharing is more of an industry built on ideals," he said, but added that it lacks the orientation to grow into a major player.

Indeed, the business history of car sharing has its share of unhappy endings and over the past 15 years, more car-sharing projects have ended in failure than in success. In 2000, Berlin's GreenWheels, then known as StattAuto, almost went under. It was then bought in October by the Netherlands' biggest car-sharing firm. The Berlin operation is still cutting corners, recently shutting its walk-in office and moving all customer service functions online in an attempt to cut overhead. It has yet to make a profit.

That is one of the reasons the company have refocused its marketing campaign, aiming at urban professionals instead of just the beard-and-Birkenstock crowd.

"The traditional "greens" are very welcome and we like that they spread the word," GreenWheels' Holm said. "But they don't drive. We need customers who actually want to drive now and then."

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