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Car-sharing in Developing Countries
Clayton Lane
Heshuang Zeng
Chhavi Dhingra
May 13th, 2014
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
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
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)
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%)
What if car-sharing is introduced here?
What if car-sharing is introduced here?
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
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
Sources of Insights
Mobility experts• literature review• expert Interviews
Car-sharing operators(supply)
• expert interviews;• focus groups
Potential/existing users
(demand)• focus groups
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
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
• 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
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
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
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)
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
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
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
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
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
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
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
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
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
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
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
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)
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
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?
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
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.
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
Thank you
Clayton Lane, [email protected] Zeng, [email protected] Dhingra [email protected]
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
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
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
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)
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
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
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
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.