Car sharing set for boom

The number of vehicles used by corporate car sharing fleets will grow 50-fold over the next six years, according to analysts Frost and Sullivan.

It estimates that around 2,000 vehicles are used for corporate car sharing across Europe today, but by 2020 it could account for as many as 100,000 vehicles.

Growth will be driven by an increasing number of providers, such as OEMs, leasing arms, rental companies, car sharing organisations and technology providers entering the market.

Martyn Briggs, Frost and Sullivan’s mobility programme manager, believes rising congestion and the relative ease of using public transport in most urban areas, set against the challenges of parking, is making car sharing a more attractive proposition.

He said: “The need to have a dedicated car for each employee for business requirements is declining in many cases. As connected cars become more commonplace, the kind of telematics and fleet management software that is used in car sharing fleets is beginning to be offered into several corporate situations.”

Alphabet launched Alpha City, its corporate car sharing scheme, in April 2012, while Car2go, the car sharing scheme from Daimler and Europcar, launched in London and Birmingham in May 2013. 

Alpha City customers pay a standard monthly contract hire rate, which varies depending on the model, term and mileage, plus a 20-25% premium for hardware and management services.

Membership cards are provided to access the vehicle and a 24/7 customer service team deals with driver queries.

Briggs said: “The operating model will evolve from smartcards and fobs to use smartphone-based virtual keys, potentially allowing multiple companies to share the same fleet by downloading a generic corporate car sharing app.”

Employers will benefit from a lowering of costs and by increasing the efficiency/utilisation of the vehicles.

Briggs said: “Accessing corporate car sharing fleets at reasonable or subsidised prices will enable company fleets to become potential profit generators through charging employees for personal vehicle use.

“Those employees that may not have previously qualified for their own company car would also be granted access to the corporate car share vehicles, ensuring sufficient vehicle volumes to service providers to underpin the business model longer term.”

However, schemes currently in operation are already financially benefiting fleets. A pilot with pay-as-you-drive car club Zipcar helped Croydon Council cut its staff car use in half and saved the local authority more than £750,000.

Under the Croydon scheme, Zipcar provides exclusive use of 23 vehicles to council employees from 8am to 6pm, Monday to Friday.

Outside these hours, these vehicles are available to more than 1,300 Zipcar members in the Borough of Croydon.

Elsewhere, Go Travel Solutions has launched travel planning schemes in Leicester and Stevenage, with its latest initiative unveiled in Milton Keynes last week.

Smartgo is a partnership between local employers, travel providers and the public sector offering travel discounts, a workplace travel assessment and travel planning.

Membership rates start from £25 per year for up to 25 employees and the schemes in Leicester and Stevenage currently serve 70,000 staff from 70 companies. 

Milton Keynes MP Iain Stewart, who is the private secretary for the secretary of state for transport, said: “The volume of people and goods we will need to transport around the country is going to keep growing. We need to make sure we have the infrastructure to cope with that.”

Stewart believes there is a lot the UK can learn from other countries in adopting a door-to-door approach to journeys, which links public transport with car hire.

He said: “That integrated thinking is going to be absolutely critical in making sure we get the best value from our transport system.”

Frost and Sullivan says that there are currently 13 providers of corporate car sharing services, but it suggests that every major OEM, leasing, and rental firm will have a branded solution or partnership in place by 2020.