Car Sharing in Europe

Business Models, National Variations

and Upcoming Disruptions

Dawn of a new era market is committed to offering personal Uber, DriveNow and car2go have experi-
Future mobility is a pervasive theme – a convenience and social improvement. enced, and are still experiencing, significant
development which is still in its fledgling growth and are unquestionably among
stage and has not yet reached its peak by Deloitte’s recent Global Automotive the defining phenomena of our future
a long way. Mega-trends, technology-led Consumer study highlighted the fact that mobility as well as the digital era. These
innovation, and regulatory conditions Gen Y (those born between 1977 and 1994) providers are changing the way individuals
are changing the nature of mobility and desires connectivity and convenience move, by seamlessly connecting either
bringing strategic and operational oppor- and can choose from an ever-increasing drivers to passengers (taxi, car pooling)
tunities as well as challenges for the range of transportation types, alongside or passengers to cars (car sharing). The
various automotive players. The sharing vehicle ownership, for getting from A to B. latter is enabled by technology and covers
economy is approaching, while disruptive This 2bn strong consumer segment is the specific segments in the overall mobility
technologies inspire the emergence of most influential since the Baby Boomers. market by offering a range of transport
new business models and set the course The emerging mobility patterns of (young) modes, from flexible one-way journeys to
for a new era of (future) mobility. Car adults are shaping an industry in which planned weekend round-trips. Car sharing
sharing is a key aspect of this, and the on-demand service providers such as extends the benefits of automobility to
Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

individuals without them having to bear the varies between individual countries. For variation in usage areas from urban to
cost and effort of car ownership. instance, Germany is by far the biggest car regional (Fig. 1). They can be categorized
sharing market in Europe, where growth as follows: free-floating and stationary
While the sharing economy provides has accelerated since 2012 (0.26m users), B2C and B2B car sharing can be seen as
favorable conditions for start-ups and and is expected to keep momentum, the two traditional car sharing models
attracts venture capital investors, estab- reaching 3.1m users by 2020. Despite and cater for specific needs. While free-
lished players in the automotive industry, this development, some experts do not floating models provide higher flexibility,
both OEMs and car rental businesses, predict a decline in car ownership, yet and compete with taxis and new mobility
have shown strong interest in gaining a there are differences between urban and providers such as Uber or mytaxi,
foothold, particularly in the car sharing regional areas, and Germans in particular stationary models are used for longer
sector. The automotive industry has are emotionally connected to their own drives and tend to substitute rental cars
gained momentum to become one of the vehicles, and young drivers value powerful or car ownership. Moreover, corporate
forerunners by incorporating consumer cars from well-known brands. car sharing users are becoming an
trends with technology, while still giving inevitable source of additional business
users the unique feeling of driving a The prominent position of car sharing for stationary car sharing providers. B2B
car. It is therefore no surprise that the compared to other mobility services car sharing is managed as a closed system
automotive industry is closely interlinked can be explained by the broad range of in which employees can access vehicles
with future mobility concepts such as car individual car sharing business models on a sharing basis, and is a strong alter-
sharing, car pooling, mobility services, and that have emerged over time. These native for corporates to operating their
electromobility, as well as other high- cater for a diverse range of customer own fleet. These conventional free-floating
quality innovations around digitalization experience, at differentiated price points. and stationary approaches are well estab-
and autonomous driving that are on the Apart from price, mobility concepts can lished in countries such as Germany and
horizon. be classified by the flexibility offered Italy, while for example in France another
to customers as well as the distance model is very prominent: peer-to-peer
Car sharing has continuously seen double- travelled, which takes into account the (P2P). This is a model where individuals
digit growth over the last few years,
especially in bigger cities where more and
Fig. 1 – Classification of car sharing among existing mobility concepts
more people are passing on the costs of
car ownership. Positive knock-on effects
High

include reduced traffic congestion and

environmental benefits. While some of
the most visible car sharing providers
began in the United States, the sector Car pooling
has become a global phenomenon, and
Europe now represents over 50% of
the global car sharing market with 5.8m
Rental car
users and 68,000 cars in 2016 (forecast).
Distance travelled

A global compound annual growth rate

of 32% for market revenue is expected
by 2020. Well-known providers such as Peer-to-peer
car sharing Public
DriveNow and car2go are already estab- transport
lished, not only in major cities in Germany,
but all across Europe, the US, and Asia. Stationary
While smaller cities and regional areas car sharing
are being catered for by more regional
providers, there is still considerable room
for growth in this market; meanwhile, Free-floating
some experts predict a potential Bicycle car sharing Taxi
worldwide decline by more than half a
Low

million cars by 2021, due to the strong

Low High
presence of car sharing providers. This Flexibility
development is a global phenomenon that Source: Monitor Deloitte analysis and expert interviews

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Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

provide their own car for rental by private positive prospects for success by meeting for users. The flexible parking policies
users via a platform. P2P provides a general success factors, e.g. high avail- require providers to cooperate with local
transportation mode for longer distances ability and network coverage, transparent authorities to avoid parking limitations.
as compared to traditional car sharing and flexible pricing, as well as fleet In 2014, car2go stopped operations in
and corresponds more to an alternative to variety to cater for individual use cases. London after only 18 months, as they were
short-term car rental or car pooling. In addition, providers as well as investors not able to secure parking permits in all of
need to be aware of the unique success London’s individual boroughs.
Distinct car sharing business models factors of each business model (Fig. 2).
Car sharing is a very broad term and Many free-floating providers are owned
a differentiation with reference to the Free oating car sharing by OEMs (car2go by Daimler) and/or rental
distinct business models is necessary. The fact that most free-floating providers companies (DriveNow, a joint venture
They range from free-floating to stationary have been in the market for less than five between BMW and Sixt), who view their
and P2P car sharing. Some providers years highlights that this approach is still investment in car sharing as being purely
(e.g. stadtmobil in Germany) offer both new; nevertheless, this market is booming. strategic and not for financial reasons.
free-floating and stationary models, Free-floating allows customers to pick up They can use this channel to promote their
thereby offering the best of both worlds and return the vehicle anywhere within cars and have direct access to customer
to their customers. Generally, these three a certain area and demonstrates this insights.
business models (free-floating, stationary, model’s main advantage: flexibility. Free-
combination) can cater to either B2C or floating cars are mainly used for short In order to be successful, free-floating
B2B. In addition, another development can one-way (shopping or other leisure) trips providers need to consider the following
be observed in the car sharing market, but in city areas, as an alternative to a taxi. success factors:
will not be the focus of this Point of View: German providers have a high turnover
O2O platforms consolidate offerings by rate of 125 users/car, so that they can • Location: high population density to
providing a link between online and offline, show profitable operations despite low attract sufficient customers per car
which enhances convenience and compa- utilization. Compared to stationary car
• Pricing: based on time (mostly per
rability for users. sharing, free-floating has higher prices
minute), not distance
that are often based on time only, and
Each approach displays particular char- in particular become more expensive in • Cooperation: local authorities have to
acteristics when it comes to product case of traffic jams in city areas. Given that grant parking spaces / permits
offering, pricing, pick-up and return, coop- operating areas are mainly in city centers, • Convenience: constant availability of
eration, as well as ownership structure. most free-floating providers offer small (small) cars that fit needs in city areas
While business model features may vary, to medium-sized cars (e.g. Smart, Mini),
car sharing providers can guarantee which also ensures relatively easy parking Stationary car sharing
Stationary car sharing on the other hand
Fig. – igh le el classification of istinct b siness mo el feat res can look back on a longer history (>20
years). While free-floating emphasizes
flexible one-way trips, stationary car
Business model features
sharing has fixed stations and (usually)
Usage area of vehicle Vehicle type Pricing Parking co-operations provides only round trips with the start
FF S P2P FF S P2P FF S P2P FF S P2P and end points being the same. The use
City center mall/city cars By time Parking permits case is therefore more for longer trips
and is likely to replace rental cars or
(second) car ownership. What stationary
Broader city area Compact cars By distance Commercial providers may lack in flexibility, they
make up for in fleet variety in terms of
brands and models, catering for every
egional Vs MPVs Fixed prices Private need. Stationary car sharing providers are
located in small to medium-sized cities
and rural regions. Utilization is higher
due to longer drives and well-planned car
FF Free floating tationary P2P Peer-to-peer Applicable utilization, while turnover is lower than for
ource: Monitor Deloitte analysis and expert interviews free-floating (45 users/car, Germany).

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Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

Stationary providers are often locally The P2P market is relatively dynamic, • Insurance: good insurance policy for
organized and do not operate on a large/ with new players emerging frequently car owners to answer concerns about
global level - one exception is Flinkster and with respect to investment activities lending
by Deutsche Bahn Rent. Many stationary by financial investors. For instance, drivy
• Community: establishment of trust
providers are backed by public funding and Tamyca have been backed by venture
between lender and driver
or private investors, rather than OEMs capital funds over the course of various
or car rental businesses. Success is financing rounds. While free-floating
pecific car sharing characteristics for
often attached to regional particularities and stationary car sharing can show
individual European countries
that are based on strong local market some global players, most P2P providers
Car sharing is successful not only in
knowledge and an understanding of operate in only one country, e.g. drivy in
Germany, but also in other European
customer needs. They often rely heavily France, Turo in the US and iCarsclub in
countries, with different characteristics
on cooperation with other providers to Singapore.
in each one. Europe has seen a positive
expand their network and for instance
development of car sharing in terms of
also extend their offerings to free-floating. In order to be successful, stationary
number of cars and number of users in
While most OEMs are invested in free- providers need to consider the following
the past. At present, Europe accounts
floating car sharing, Volkswagen invested success factors:
for about 50% of the global car sharing
in stationary car sharing by taking over
market and is expected to grow further to
60% of Greenwheels. • Technology: state-of-the-art platform
15m users by 2020 (Fig. 3).
and telematics to ensure ease of use
In order to be successful, stationary
• Availability: large and diverse network
providers need to consider the following
to ensure best fit for customers
success factors:
everywhere

• Location: smaller and medium-sized

cities, rural areas
Fig. 3 – Car sharing market development for Europe* (2006–2020):
• Availability: large network of stations,
including at central hubs (e.g. train # cars (in k) # users (in mn)
stations) 200 20

• Pricing: based on distance, or hourly

rates 15.6
150 15
• Fleet: variety for different purposes

Peer-to-peer car sharing

Initially only a niche market, P2P car 100 10
sharing is on the rise. While vehicles for 9.0
free-floating and stationary car sharing 5.8
are made available by providers, P2P car 50 5
sharing offers vehicles belonging to private
2.2
individuals to a specific user community.
Players provide a platform to handle the 0.3 0.6 0.7
0.2
0
transaction, offer insurance, and equip
2006 2008 2010 2012 2014 2016e 2018e 2020e
the car with telematics devices to ensure
easy access. The car needs to be returned
Users Cars Forecast
to the pick-up area, and can thus only be
used for round trips. Given the decentral-
*Countries in Europe: Germany, UK, France, Italy, Switzerland, Austria, Netherlands, Sweden, Spain, Belgium,
ized fleet, customers have more variety Norway, Denmark, Sweden
in terms of brands and models. Pricing Sources: Monitor Deloitte analysis, based on Bundesverband CarSharing, Carsharing Association (CSA),
(e.g. drivy) is based on a daily tariff, and The European Automobile Manufacturers' Association (ACEA), CU Berkeley, Frost & Sullivan
provides a good alternative to stationary
car sharing or rental cars.

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Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

The list of car sharing providers that are considered a global player, but is active
active across Europe is long. While most mainly in the US. Flinkster is one of the few
players operate in only one country, some stationary providers that can be found in
car sharing providers are active in more a few other European countries besides
than one place. Free-floating providers Germany. Inevitably, there are some signif-
such as DriveNow and car2go are present icant differences and specifics between
in various European countries, while the the individual countries – the most signif-
latter, for instance, also has operations icant ones can be found in the following
in the USA, Canada, and Asia. Zipcar is snapshots:

Fig. 4 – European car sharing landscape

Scandinavia – regulated
UK – no parking in London
innovators

London ’s center for car sharing, but focus Environmental consciousness, innovation, and
started to shift to other regions. London wants openness to new things are promising conditions
0.6m car sharing users by 2020 to reduce traffic for car sharing. owever, constraints stifle its
and parking problems success in Scandinavian countries

Parking: parking permits in London are Geography: free floating providers operate
biggest obstacle for free floating providers. only in big cities. Besides Stockholm,
All 32 boroughs need to be approached Copenhagen, and Oslo, remaining popu-
individually for permits lation is spread widely across the countries

Pollution: intended reduction in number Regulations: high sustainability regulations

of cars to limit estimated cost of which also place importance on good
pollution of £4bn/year (one of the most lobbyism e.g. Sweden plans to have
polluted cities in the world) >50% electric car sharing by 2030

Mobility: ber or Gett, as well as P2P car Competition: gas station providers
sharing like Whipcar and carpooling like (e.g. tatoil) offer short term rental at fair
BlaBlaCar, are becoming more successful prices. Also difficult for external providers
outside of London to cater for specific needs

France – boom in P2P Germany – Europe’s biggest market

Most successful market for P2P car sharing in With >1.2m users, 150 providers and 16,000 cars
Europe. P2P comprises ~ 90% of car sharing with at the beginning of 2016, Germany is by far the
>1m users. Successful providers like drivy are biggest car sharing market in Europe, and still
expanding outside of France expected to grow
Italy – Oligopoly and local associations
Geography: mostly in big cities. Bolloré Geography: many big cities that are
is market leader with autolib’ (Paris), Generally a favorable market with >0.5m users. suitable for free floating and densely
Bluely (Lyon) & Bluecub (Bordeaux) Both free floating and stationary models are populated medium-sized cities with good
successful in different cities. ncertain market conditions for stationary models
growth, given the high saturation
Regulations: strict regulations: all free Regulations: authorities open to colla-
floating vehicles must be electric or Geography: Milan is center for free float- borations (parking permits or spaces).
hybrid. When criteria are met, easy access ing with 80% of the market, e.g. Twist and Strict regulations in taxi industry make it
to parking spaces Share’n’go. Car2go and Enjoy also operate difficult for concepts like ber
in Florence, Rome, and Turin
Network: car sharing, especially P2P, Customer: average car sharing user
outside Paris is mainly organized by Associations: stationary car sharing was wants flexibility and is willing to pay for it.
“Réseau citiz”: consolidation of 18 car previously organized by local associations. Features: male, <40 years, high income
sharing providers in over 80 French cities Of the existing providers, 12/18 still and good education
belong to a public consortium

Mobility: bike sharing is profitable market

especially in Milan: >40,000 bikes with
280 pick-up stations. BikeMi offers tradi-
tional and electric bikes

Sources: Monitor Deloitte analysis, mainly based on expert interviews and Carsharing Association (CSA), Frost & Sullivan, Bundesverband CarSharing, BikeMi

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Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

Technology will revolutionize and Paris are obliged to offer a fully electric Car sharing as an accelerator for
disrupt the car sharing market or hybrid fleet. In order to make ‘zero automotive players
Strong smartphone penetration has so emission’ a quintessential component Facing these trends, OEMs can use
far been, and will continue to be, a key of the new mobility movement, some car sharing as an important strategic
enabler for the growth of the car sharing hurdles certainly still need to be taken, investment opportunity, especially to
market, but technological advances will for instance the installation of nationwide ensure sufficient customer touchpoints,
unfold further. Electric cars, autonomous networks of charging stations and appro- but providers as well as investors need
driving, route optimization technology, priate regulations. to be aware that the various car sharing
and car-to-car communication will change business models are very distinctive with
the way customers use cars, and how Autonomous driving specific success factors. Free-floating for
OEMs choose their strategies and market Converging social and technological example requires a different approach
their products and additional, supporting trends, from shifting consumer prefer- to stationary car sharing, and the same
services. The future will further transform ences to the emergence of autonomous applies to P2P. Furthermore, success at
from automobiles to automobility, which vehicles, will shape the way in which both the local and global level depends on
will unleash new levels of convenience and people move from one place to the next. the extent to which country specifics such
efficiency for all road users by promoting This future state of mobility is determined as regulations and customer preferences
the relationship between cars, infrastruc- first of all by the extent to which cars are are taken into account.
ture, and users. It will be those automotive personally owned or shared, and secondly
trends and technological innovations, in by the extent to which autonomous OEMs have an opportunity to make
particular electric cars and autonomous vehicle technologies become pervasive. car sharing an even more attractive
driving, with OEMs at the center, which will Such a new era of accessible autonomy market and to be pioneers. Technolog-
catapult the car sharing market from the would combine the car sharing movement ical advances for future mobility will
current to the future state. with autonomous driving, two concepts further underpin the importance of car
which impact each other. sharing as a new mobility concept. Car
Electromobility sharing is predestined for the implemen-
Electromobility is essential to future While traditional car sharing is mainly tation of trends such as e-mobility and
energy concepts, and indispensable to present in urban areas, autonomous autonomous driving, and can therefore be
emerging smart and resource-friendly shared vehicles could spread the offerings a key enabler to significantly increase the
lifestyle seekers. Electric cars and car also to densely populated suburbs and acceptance of future mobility concepts
sharing are considered a very suitable extend the potential customer base among the population. And although
symbiosis. They enable OEMs not only to significantly. A study shows that 68% of car sharing may not provide the highest
test and promote their own vehicles, but users would try autonomous driving when returns, the added value for OEMs is
also to give their (potential) customers using car sharing. This poses a unique significant and should not be disregarded.
an understanding of the particularities opportunity for OEMs to test this new
of electric cars. Car sharing providers technology under market conditions and Car sharing provides OEMs with additional
currently offer 1,750 electric cars in to penetrate the market. Existing (local) touchpoints with customers. Consumers
Germany, which fulfill particular use cases car sharing providers have a competitive are open to new mobility concepts and
- this number is expected to grow signifi- advantage over potential new entrants, as will strongly influence developments in
cantly. Various car sharing providers, as they have local knowledge and networks the mobility and car sharing sectors. Car
well as most of those backed by OEMs, – two factors that are indispensable when sharing allows OEMs to ensure direct
are operating partially or fully electric it comes to operating shared mobility access to the end-customer and to
fleets. Competition is growing, since systems. To counteract the strong financial provide a foothold in the new service-
corporates outside of the automotive backing of new entrants or OEM-backed driven mobility area. In addition, OEMs
sector have tried recently to seize a car sharing providers, established (local) can gain access to new customer groups
share of the market and bring car sharing players need to secure financial investors who otherwise would not consider the
to the next ‘zero emissions’ level, e.g. in good time. respective brand when purchasing a
BeeZero by Linde Hydrogen Concepts. new vehicle. Private as well as corporate
Similar developments can be observed in customers can get to know the partic-
other European countries. For example, ularities of current as well as future
Italy is strongly involved, with some car mobility. Looking ahead, for instance
sharing fleets being completely electric, towards autonomous driving, this will
and free-floating car sharing providers in change the exposure to car sharing.

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Car Sharing in Europe | Business Models, National Variations and Upcoming Disruptions

Customers will experience a new level of Your Contacts

customer involvement, by being able to
call for and almost instantly be picked up
by a car sharing vehicle. This in turn will
ensure a much higher utilization rate for
car sharing providers, as well as lower
operating costs due to fewer required
parking spaces. In exchange, OEMs have
a representative platform to market and
test their innovative vehicles and as above
technology. Such ‘paid test drives’ are
an additional channel for OEMs to use Dr Thomas Schiller Julia Scheidl
customer insights for further research and Leader Automotive Germany Senior Consultant
development. Tel: +49 (0)89 29036 7836 Monitor Deloitte
[email protected] Tel: +49 (0)89 29036 8148
The vision of OEMs should be to position [email protected]
themselves as preferred partners for
existing as well as new mobility concepts. For additional information, please visit our
Thus OEMs are well advised to rapidly website www.monitor-deloitte.de
anticipate and cater for requirements
in order to be competitive in offering
ultimate mobility solutions, and should
therefore actively respond to partner-
ships with adjacent sectors. Cooperation
determines the mobility sector to a great
extent. Traditional mobility providers will Thomas Pottebaum
experience a self-evident exposure of Senior Manager
customers towards mobility, if they have Monitor Deloitte
not already. Ease-of-use will be a key Tel: +49 (0)89 29036 7952
success factor for car sharing providers, [email protected]
which will result in the development
of intelligent mobility solutions. In this
context, new market entrants will emerge
and lay the path for cooperation. OEMs
need to cooperate with other mobility
stakeholders and form networks to
ensure the development of innovative
concepts and take car sharing to the next
level. This also highlights the fact that
future business models of OEMs will move
from being solely hardware suppliers to
becoming solution providers. Or bluntly
speaking: Uber yourself before you get
Kodak’ed!

7
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Issued 6/2017