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Car-sharing in Developing Countries Clayton Lane Heshuang Zeng Chhavi Dhingra May 13 th , 2014

Car-sharing in developing countries

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Page 1: Car-sharing in developing countries

Car-sharing in Developing Countries

Clayton Lane

Heshuang Zeng

Chhavi Dhingra

May 13th, 2014

Page 2: Car-sharing in developing countries

Key question: is car-sharing a feasible and sustainable mobility option in the developing countries?

Project timeline: 2011/09-2013/09

Countries in focus: China, India, Brazil, Turkey, Mexico, South Africa

Research team:• EMBARQ Global: Clayton Lane, Aileen Carrigan, Heshuang Zeng• EMBARQ India: Chhavi Dhingra, Rebecca Stanich

Overview

Page 3: Car-sharing in developing countries

Research Scope and Methodology

Key Findings• Current Status• Barriers and Opportunities• Key finds by city

• Bangalore: market interest, operation models, impacts• Hangzhou: market interest, operation models, impacts

Outline

Page 4: Car-sharing in developing countries

Current Status: • The rapidly growing trend• Increasing variety of Car-sharing services• Being Mainstreamed in developed countries (IPO/new players)

Background: Car-sharing Worldwide

(Data source: Shaheen and Cohen 2007, 2012)

Page 5: Car-sharing in developing countries

Positive social and environmental impact in the established market (reduce VKT; delay or replace car purchase)

Different context in terms of urbanization, motorization and transportation infrastructure

Largely unknown in developing countries

Is Car-sharing a Feasible Option?

Region No. Vehicles Replaced

Percent VKT Reduction

North America 6 to 23 28 to 45%

Europe 4 to 10 7.6 to 80% (Ave. 40%)

Page 6: Car-sharing in developing countries

What if car-sharing is introduced here?

Page 7: Car-sharing in developing countries

What if car-sharing is introduced here?

Page 8: Car-sharing in developing countries

What is the current state of the industry in developing countries?

What are the potential markets?

What are the main barriers and opportunities to implementation?

How should car-sharing systems be designed?

What might be the societal and environmental impacts?

Research Questions

Page 9: Car-sharing in developing countries

Methodology

Literature Review

• Overview on existing knowledge

• Assumption for expert Interview questions;

Expert Interviews

• Reached 26 interviewees in 11 countries

• Current status update

• Test the assumption of barriers and opportunities (CSOs)

• Develop hypotheses to test for focus groups and Inform city selection

Focus Groups

• Test hypotheses from expert interview

• Bangalore, India and Hangzhou, China

• Collect fist-hand understanding from users’ perspective;

Final Report

• Report on “car-sharing in developing countries”

• Presentation

Page 10: Car-sharing in developing countries

Sources of Insights

Mobility experts• literature review• expert Interviews

Car-sharing operators(supply)

• expert interviews;• focus groups

Potential/existing users

(demand)• focus groups

Page 11: Car-sharing in developing countries

Hangzhou, China • 48 participants• Young working professionals • 24 car owners, 24 non-car owners• 12 EVnet Members

Bangalore, India • 44 participants• 27 IT professionals, or primary users; 17 secondary

household members• 20 with access, 24 with no/limited access

Focus Groups

Page 12: Car-sharing in developing countries

Hangzhou

• State capital, 180 km from Shanghai

• Population – 8.7 Million• GDP per capita: 12,320

USD• Modal split in 2000 –

42.8% bike, 22.25% bus , 27.6% pedestrian and private vehicles – 2.6%

Hangzhou

Page 13: Car-sharing in developing countries

• Capital of the state of Karnataka;

• Population – 8.5 Million (2011)

• GDP per capita: $3,963• Modal split of motorized

trips – public transport 42%, 2-wheeler 38%, auto-rickshaw 11%, and cars 9%

Bangalore

Page 14: Car-sharing in developing countries

Car-sharing Industry is very small but growing fast;

Market interest varies from place to place;

Faces unique barriers and opportunities such as aspiration to car ownership/usage and congestion;

Car-sharing operators adopt the existing business models to local context; Focus Groups identify new user requirements;

Increase the access to auto mobility; Potential to delay/place car purchase plan in Hangzhou and to the less extent in Bangalore.

Key Findings

Page 15: Car-sharing in developing countries

Emerged recently – first CSO Zazcar (2009)

Small, but growing very rapidly

Activeness differs by region

Mostly two-way systems

Emergence of other related modes• ride-sharing, peer to peer (Brazil, China); • shared taxi (China); • with-chauffer car-rental, self-drive car rental, radio-rickshaw

(India) • Uber (China, India, Brazil)

Current Industry Status

Page 16: Car-sharing in developing countries

Current Industry Status

System Name

City CountryBusiness

ModelStart date

Fleet Size

Membership Status

Caronetas San Paulo Brazil ridesharing 2010  800,000+(15,0

00 active users)

Operational

Zazcar São Paulo Brazil 2-way 2009 60 3,200+ Operational

Edoauto Beijing, China 2-way 2009 200+20,000+(*** active users)

Operational

Evnet  Hangzhou China 2-way 2011 138 9915 Operational

Rent-a-Reva Gurgaon India 2-way 2011 4 357 Cancelled

Zoom Bangalore India 2-way 2013 50 7000 (3500 active users)

Operational

Carrot Mexico City Mexico 2-way 2012 60 2500+ Operational

Ubicar Mexico City Mexico 2-way 2012 25   Operational

Mobilizm Istanbul Turkey 2-way 2011     Operational

Atlagit Istanbul Turkey 2-way 2010 2 55 Cancelled

YoYo Istanbul Turkey 2-way       Operational

Date: January 2014 ( system in red are those we interviewed)

Page 17: Car-sharing in developing countries

Barriers and Opportunities Area Barriers Opportunities

Potential Users• Strong aspiration for car-

ownership• Unfamiliarity with CS service

• Desire for car access

Transportation Infrastructure

 

• Congestion• Insufficient public transport

infrastructure• Limited Parking for car-

sharing

• Low-car ownership rates• Poor taxi and rental car

options (China)• Limited parking for private

vehicles

Governance 

• Lack of driving and criminal records and personal credit system;

• Import taxes on vehicles;• Public policy unfamiliar with

car-sharing• Car restriction affecting CSOs

• Congestion- vehicle travel restriction

• Air pollution – promote the clean vehicles

• Improvement on public transport system

Business• Contextualized operational

technology unavailable• Limited access to capital

• Low labor cost

Page 18: Car-sharing in developing countries

Users – young and well-educated/ non car-owners /median or lower-median income

Trip types - weekend trips /occasional shopping and leisure/ business

Market interest varies by region • Hangzhou – young working professionals• Bangalore – less interested than Hangzhou; but IT

professionals with no or limited access show large interest

Market potential influenced by the urban context – demand & supply

Market Interest – Users and Trip Types

Page 19: Car-sharing in developing countries

Some CSOs have developed contextualized operation models. Modifications are key to success.

Pricing Strategy: Distance-based gasoline charge + hourly rate, free membership, special package

Respond to congestion: no return time/call in service.

Localized technology (self-developed or purchased)

Marketing and communication strategies

Seek governmental support

New financial model

Existing Operation Models

Page 20: Car-sharing in developing countries

Overall Market Interest in Bangalore

60 % of primary and 50% of secondary participants indicated that they would be interested in using carsharing services

Those not in favor had preference to own vehicle or non-inclination to drive or perceived the car sharing process to be cumbersome.

Primary Secondary0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

17

9

10 8

Would not be in-terested

Would be in-terested

Per

cen

tag

e o

f re

spo

nd

ents

Page 21: Car-sharing in developing countries

Market Interest by Car-ownership Vs. access

In the primary group, out of 27 participants, 16 were car owners, however only 13 has access to a car when they needed it, whereas the remaining 14 did not.

Similarly in the secondary group, though 15 of the 17 participants interviewed owned cars in their households, only 7 had access to it.

Ow

n c

ars

Ha

ve a

cce

ss

Ow

n c

ars

Ha

ve a

cce

ss

No

n-o

wn

ers

No

/lim

ited

acc

ess

No

n-o

wn

ers

No

/lim

ited

acc

ess

Primary Secondary Primary Secondary

0

2

4

6

8

10

12

14

16

1816

13

15

7

11

14

2

10

Nu

mb

er

of

pa

rtic

ipa

nts

Heshuang Zeng
Not sure whether we have time to go to this level of detail in the webinar. It is also unrelated to market interest - this is participant profile. I updated the infomation in slide 11.
Page 22: Car-sharing in developing countries

Market Interest by Car-ownership in Bangalore

Working professionals who did not own a vehicle had the maximum interest in using carsharing, followed by secondary members whose household already owned one car.

Predictably, secondary members whose households had two cars, did not express interest in car sharing.

Primary Secondary Primary Secondary Primary Secondary0 1 2

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

9

1 7

8

1

0

2 1 7 4 1 3

Would not use CS

Would use CS

Cars owned per household

Per

cen

tag

e o

f re

spo

nse

s

Page 23: Car-sharing in developing countries

Preferred Potential Car-sharing Trip Types in Bangalore

Primary users use cars followed by 2 W for almost all trips.

Secondary users use cars followed by public transport, 3W and cabs.

Leisure (including out of town) and shopping (trip chaining) were cited in majority (almost 70%) for carsharing. Work trips came third.

Low preference for healthcare and education trips- possibly due to their urgent nature

14

17

3

9

1

Shopping

Leisure

Health Care

Work

Education

Heshuang Zeng
This seems to be unrelated to the preferred potential carsharing trip types
Heshuang Zeng
Seem to be unrelated to potential CS trips
Page 24: Car-sharing in developing countries

Operation Models – What else do Bangalore users want?

“It should feel like a new car, not ‘somebody else’s’ car”.

Strong preference amongst males for luxury vehicles and SUVs.

Lukewarm response to Evs

Willingness to walk up to 10 minutes to access a carsharing station

Preferred location residential complexes, offices, airport, major public transit stations

At around INR 200 (EUR2.8) per hour, the pricing competitive with hired taxis.

Prefer distance to time-basedBelow EUR

14000

EUR 14000-21000

EUR 21001-28000

Above EUR

28000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1

4

1 2

3 5 3 6

Unacceptable Acceptable

Yearly household incomePe

rce

nta

ge

of

res

po

ns

es

in

ea

ch

ca

t-e

go

ry

Acceptability of price of carsharing (2.8EUR/hour) in Bangalore

Page 25: Car-sharing in developing countries

Social benefit of increasing users’ access

Carsharing to avoid parking and maintaining hassels, etc.

Current car owners did not wish to give up using their cars for carsharing and even if they did so, they didn't necessarily anticipate having to travel any less thereafter.

29% IT professionals, 31% secondary members would consider delaying (usually second) car purchase

Uncertain impact on VKT, GHG emissions

Overall on a national level, focusing on public transit, biking and walking infrastructure was identified a more pressing need than planning for carsharing systems ( view of experts and current focus of Government)

Social and Environmental Impact - Bangalore

Page 26: Car-sharing in developing countries

Most young working professionals interested.

Nearly ½ participants might use carsharing at least three times a month.

Market Interest Users in Hangzhou

 Perception to Carsharing (will you try carsharing

service)

Estimated or current usage frequency

Total

Non UsersNo - 2

Potential Light Users

YesNo more than once a

month12

Potential Moderate users

YesBetween once to three

times a month11

Potential Heavy Users

YesAt least three times a

month 23

Table 1. Four types of users

Page 27: Car-sharing in developing countries

Market Interest Users in Hangzhou

Non-car owners are more interested

Non Car Owner

Car Owner

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

0

2

1

11

5

6

18

5

Non users Light users Moderate users Heavy users

Page 28: Car-sharing in developing countries

Largest interest: median and low-median income groups

Market Interest Users in Hangzhou

2501-5000 5001-8000 8001-11000 11001-13000 13001-18000 18001-230000%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Non usersLight usersModerate usersHeavy users

Pesonal monthly income (RMB/month)

Page 29: Car-sharing in developing countries

Non-car owners seek auto mobility for weekend leisure trips

Strong interest for hometown visit trips

Less interest in shopping trips

Competing modes: car rental and taxi

Market Interest Trips in Hangzhou

A summary of modal split of non-car owners (unit: # of participants)

Trip types

Personal mobility

(rental car, car-sharing, borrow from

friends) Taxi Bus Mixed modesBiking and/or

walking

commute 1 0 11 3 1

shopping 2 8 1 5 5

leisure 13 6 1 1 0

Page 30: Car-sharing in developing countries

FOCUS GROUP FINDINGS

Most want carsharing to be operated like bike-sharing;

Easy access to stations - dense carsharing network well integrated with PT

Preferences of vehicle types• Compact vehicles are acceptable for nearly half of participants• A variety of fleet or “bigger cars” options will be good – some want

luxury cars for occasional usage• Most are open to EV/HEV, but mostly due to cost considerations

Operation Models – What else do Hangzhou users want?

Page 31: Car-sharing in developing countries

Social benefit of increasing users’ access

Suggest delaying or replacing car ownership• Nearly half participants’ car purchase plans might be

affected (17 delay & 5 replace);• Among 16 participants who recognized the status of cars,

1/2 might delay or replace vehicle purchase plan.

Uncertain impact on VKT, GHG emissions • delay or replace car ownership• increase the usage of non car owners

A way to introduce electric vehicles

Social and Environmental Impact - Hangzhou

Page 32: Car-sharing in developing countries

Hangzhou: Delay or Replace Car Purchase Plans

  Total

# who would delay 1st vehicle

purchase

# who would replace 1st

vehicle purchase

# who would delay 2nd vehicle

purchase

# who would

replace 2nd

vehicle

Car Owners 24 - 0 5(3) 2

Non Car Owners

24 12(6) 3 - -

Potential large impact delay/replace 1st vehicle purchase in the household

*the number in the () = the number of Evnet members.

Page 33: Car-sharing in developing countries

Car-sharing Industry is very small but growing fast;

Market potential varies from place to place;

Faces unique barriers and opportunities such as aspiration to car ownership/usage and congestion;

Car-sharing operators adopt the existing business models to local context; Focus groups identify new user requirements;

Increases access to auto mobility; potential to delay/replace car purchase plan in Hangzhou and to lesser extent in Bangalore.

Key Findings

Page 35: Car-sharing in developing countries

Rapid urbanization and motorization: • 600 million new urban population in India and China by 2030;• By 2030, light auto sales in China, India, and Brazil are expected to

nearly double those sold in the U.S. and Europe combined.

Asia, Africa and Latin America are home to over 75% of the world’s urban population but account for only 10% of the global car-sharing membership (mostly in Japan and Singapore).

Opportunities in Developing Countries

BACKGROUND

Page 36: Car-sharing in developing countries

OUR SCOPE AND METHODOLOGY

The 26 interviewees were grouped into three categories and covered the following geography

Categories of expertise

mobility experts

Car-sharing operators

others such as technology providers

Regions:

Brazil, China, India, Turkey, Mexico, and South Africa.

U.S., Germany, France, Canada, and Singapore

Expert Interview

Page 37: Car-sharing in developing countries

Operation Models responding to Barriers and Opps

Barriers and opps on users Solutions

• Unfamiliarity with car-sharing• Aspiration for vehicle ownership

• Marketing and communication strategy (print-outs or online info on cost-saving and environmental benefits)

• Price-sensetiveness • Pricing strategy (free membership, special package, distance combined with hourly rate)

• Liability concern • Photo-taking at service, peer evaluation

Page 38: Car-sharing in developing countries

Operation Models responding to Barriers and Opps

Barriers and opps on transit infrastructure

Solutions

• Limited parking • Working w/ real estate developers, industrial parks, universities

• Seek for government support (Hangzhou and Mexico City)

• Congestion • Allow flexible return time (Brazil); • Call-in service to change return time (China)

• insufficient public transport infrastructure

• Stations planed in transit-friendly neighborhood selectively

• Arrange limited number of stations close to each other (Mexico City)

Page 39: Car-sharing in developing countries

GOVERNANCE

Operation Models responding to Barriers and Opps

Barriers and opps on governance

Solutions

• Lack of driving records • Test driving to check the driving skills

• Lack of credit system • Pre-paid system and third party payment to overcome the lack of credit system (China)

• High tax on vehicles • New financial model for vehicle selection and vehicle management (Brazil, China);

• EV promotion • Apply EV fleet in Car-sharing service and seek for government support

Page 40: Car-sharing in developing countries

BUSINESS

Operation Models responding to Barriers and Opps

Barriers and opps on governance

Solutions

• no localized technologies available

• Modify the technology (Brazil);• Self-develop the technology (China)

• limited access to capital • Self- funded and start small• Seek to scale up when the business model is

more mature

Page 41: Car-sharing in developing countries

Hangzhou

Fast urban expansionFast motorization - #of motorized Vehicles in 2011 reached 2.1 million

Travel Restriction• Peak hour weekday travel restriction to keep one fifth of vehicles out of

streets;• Travel restriction around West Lake to keep half vehicles out of west

lake zone.

Constructed urban area (square kilometer)

# of motorized vehicles (million)

2001 180 0.39

2011 550 2.14

Page 42: Car-sharing in developing countries

Carsharing and PT in Hangzhou

Metro Bus Carsharing Parking LotPublic bike Station/lane

s

Highway entrance

Sidewalk

Overall Score

1.905 2.879 3.089 3.111 3.786 4.600 5.045

Overall order

1 2 3 4 5 6 7

Non Car Owner Score

2.318 2.467 2.435 3.176 3.929 5.600 5.300

NCO order1 3 2 4 5 7 6

Car Owner Score

1.450 3.222 3.773 3.053 3.643 4.100 4.833

CO order1 3 5 2 4 6 7

(Lower score indicates higher priority)

Carsharing show great potential of fitting into Hangzhou’s public transport network.