Interview with Car2Go CEO Nick Cole

Car2Go in DC. Photo by Flikr user Elvert Barnes.

Car2Go in DC. Photo by Flikr user Elvert Barnes.

Yesterday afternoon, I had a chance to sit down with Car2Go CEO Nick Cole, to discuss how Car2Go works with city transit systems, how Car2Go can help make cities better places, and to answer some of the many questions suggested by STB readers. I tried to distill the many questions you asked down to a reasonable number which I hope, nevertheless, was sufficient to cover most of the bases. If there’s something you really think I should have asked, say so in the comments and I’ll consider following up with the Car2Go folks via email.

First, though, I should note that Car2Go is having their official launch party at Etta’s, just north of Pike Place Market, on Saturday, from 9AM to 3PM. I’m told there will be free food, swag, and test drives. Additionally, as many readers have noted, you can also use the promo code SOUND when you sign up, to get 30 free minutes of driving.

Note that interview questions and answers are condensed, taken from my notes.

Bruce: How has Car2Go worked with transit in other cities?

Nick: In the cities we’ve previously moved into, Car2Go has really acted to complement the existing transit system. Some trips, like those between outlying or less-dense areas, are just hard to serve with transit. Cities like Seattle are growing, and city governments are trying to figure out how to repurpose their streets to move people around more efficiently; Car2Go helps them do that. Some of the people moving into cities are coming from suburban areas where car-ownership is universal, and are looking to go carless or car-lite; Car2Go helps them make that change, because they know they can have access to a nearby car if they need one.

More after the jump.

How do you think your service relates to ZipCar?

We see them as complementary, largely serving different trips and markets; shorter versus longer rental periods, different vehicles, spontaneous versus planned, etc.

Indeed, I’m a big guy, I can’t imagine a weekend camping or road-tripping in a Smart Car.

[laughs] You couldn’t, and I suspect most people here would agree, but it’s interesting: in Europe, people will rent these cars for a weekend or more, and sometimes drive them across three countries.

Why is the UW area stopover only? Most of those restricted areas make sense as low activity areas (the Arboretum, etc.) but there would seem to be lots of demand there.

That area is a legally distinct jurisdiction from the rest of Seattle; we will have to negotiate separately with the UW for the ability to end trips there. We’re aware of this issue, we’d certainly like to expand the home area serve that part of town.

For the first hundred days when we go into a new city, we’re in a ramp-up mode, where we’re primarily focused on bringing in new members, getting them set up, and working out any operational problems with the cars. After that, we move to a feedback, improvement, and expansion mode, where we would start to focus on issues like this one.

How did you decide to set these initial home area boundaries?  

We primarily look for areas of mixed-use urban density; that’s what drives our demand.

Is it possible to change the home area? If so, what will guide your changes? For example, many of us are baffled by the decision to draw the Rainier Valley boundary about two blocks short of Mount Baker Station, which is the transit crossroads for the Central District, Columbia City, and other active, dense neighborhoods.

Yes, within a jurisdiction where we’ve negotiated a deal, home area changes are extremely easy, and we often make adjustments after the initial ramp-up. We base these changes on observed travel patterns, from member surveys which will go out very shortly after the first hundred days, and from customer feedback.

How should Car2Go members give you that feedback?

Facebook, Twitter, and the customer service email address. We monitor social media continuously, and can respond in near-real time to feedback which comes in that way.

What about the idea of a home area island at the airport?

This is a little trickier; we’ve not done this before. We’d have to negotiate with the Port of Seattle to obtain parking at the airport, and we’re not sure if we’d get enough turnover to make it pencil out: other than a few frequent flyers, most people only make a few trips to the airport each year. What might make this more viable is a model whereby you reserve a car at your destination airport before you leave, so you can be sure to have one waiting when you arrive. But this is somewhat of a different model from our current business. It’s an interesting idea, but unlikely in the short term.

Anecdotally, downtown often seems to be really short of cars (relative to its density). I wonder if there might be a problem with so many of downtown’s streets having peak-only parking restrictions (making them unusable for Car2Go)? Are you aware of any problems there?

We’ve haven’t noticed this issue yet; however, we’re still early in the ramp-up and the final travel patterns aren’t really established. This is, again, the kind of thing we’ll look into after the first hundred days. If there’s a car or parking shortage downtown, we’ll address it.

What kind of travel patterns do you see? Do trips seem to be paired or mostly one-directional?

On an individual car or member level, we see everything. A car might move many times, a few blocks here and there in a neighborhood, then sit idle for hours, then in the evening someone drives it clear across town. There are people who make a trip, then immediately make another reservation for another trip; others never do that, and both are totally OK with us. On an aggregate level, we see the kind of pattern you’d probably expect: moving into downtown, offices, and financial districts during the day, they out to residential areas in the evening.

What do you look for in a city? You previously mentioned density and mixed use, but you’re in some cities, like San Diego, which are overall very suburban, and not in some cities, like San Francisco and New York, which are very urban.  

San Diego, with its 100% electric fleet, is a bit of a special case [discussed more below]. In general, we look for a mixed-use urban core, and a city which is interested in having a service like ours. Some of the cities you mention us not being in, we’re already working on moving into.

While cities with a pre-existing dense urban core are the obvious market for Car2Go, it seems to me that the place where this service could perhaps have the greatest transformative impact is in suburban cities like Phoenix, which are in the process of (re-)developing an urban core, almost from whole cloth, around their light rail line. Car share seems like a particularly apt technology to help with the transition away from universal car ownership in developing neighborhoods where basic services (e.g. groceries) are almost never within walking distance, and the overall transit network simply doesn’t provide enough convenient mobility. Are you you seeing interest from such cities, and do you see potential for your company in them?

Yes and yes; several cities like that have approached us. Austin, our pilot city in North America, is a great example. Overall, it’s a low-density city, but they were eager to have us, and since we’ve been there, they’ve built up their skyline, and our business there is working great.

How do you choose how many cars to put in a city? How come we have more cars than Vancouver?

It’s based on the expected level of demand, the area we’re covering, and the comfort level of the city. Vancouver’s home area, even after a round of expansion, is still just over half the size of the Seattle home area. All of our North American cities are in the 250-350 range, although in Europe, our fleets are bigger: more than a thousand in Berlin, for example. Partly this is because the cities are bigger, fewer people own cars, etc., but partly it’s because city governments are more comfortable with large car share fleets. Even if we thought there was the demand for a thousand cars in an American city, if we went to the city government and asked to put out a thousand cars on the street, they’d be shellshocked. So we’re flexible with cities; start smaller; we can always expand more gradually as they become comfortable.

Talk to me about electric vehicles in Car2Go. Are they in Seattle’s future?

We have EVs in San Diego, Portland and Vancouver; the first is 100% EV, and the other two we call the “hybrid” model with a mix of gas and electric. San Diego had a federal grant and a partnership with ECOtality to install charging stations around downtown, and were looking for a car share to serve downtown, so it was an great fit. In general, EV deployment is purely an infrastructure problem. If there are enough public charging stations that we can access, we’ll put in EVs. If Seattle gets the infrastructure, we can do it here.

What are your thoughts about offering differential rates (or bonus minutes) as an incentive to move cars from areas of low demand to high demand?

It’s a very interesting idea, and we’re thinking about it. Generally, if a car has been unused for 24 hours, we’ll send someone out to check on it, and possibly move it. If we could incentivize members to use them, instead, that would be just as good.

What kind of information might be made public about Car2Go usage patterns?

The information is proprietary, part of our business, so we can’t give all of it out. We usually release summary information about the number and average duration of rides. Beyond that, sometimes for our host city governments who want to know how the service is being used, we have prepared heat maps showing how trips are distributed across the city.

Indeed, there’s nothing I could write which would make my readers as interested and happy as a bunch of really interesting data.

We’ll see what we can do. After the first hundred days, we’ll have the initial data, and I’ll be back in town; maybe we can share something then.

Finally: one of my pet peeves about the early 2010’s is how my wallet is filling up with incompatible contactless smartcards — ZipCar, Car2Go, ORCA — all of whose functionality could, technically, be subsumed by the NFC-equipped smartphone I also carry around with me all day. Please tell me you are doing something to leverage this increasingly common, potentially incredibly convenient, but almost totally unused smartphone technology.

Yes, absolutely, we are working on something along these lines. One of the benefits of being part of Daimler is that we get to tap our parent company’s engineering resources in areas like this. More generally, we’re looking to technology to personalize your car experience. One the the nice things about owning your own car is that it’s your space, and it has your music in it, etc; we’re interested in using wireless technologies like NFC and bluetooth to replicate that. There’s no reason you shouldn’t be able to use your smartphone to unlock the car, and then once you get in, your music is playing, and your common destinations are already up on the Navigation screen, etc.

Nick, on behalf of  my readers and myself, thanks very much for taking the time answer our questions.

And thank you for coming in. We read the blog post where you asked for questions, and were amazed at the number and quality of questions. Your readers are really smart and engaged.

Thanks… we love them, too.

Comments

  1. Zack says

    I own a smart car, my wife and I take weekend camping trips all summer long. There is plenty of room to use these vehicle for extended trips with luggage for two.

    • Orv says

      I’m curious what you saw as the advantages of the Smart Car over larger, less expensive cars that get similar fuel economy. When I see them I always feel a little like I’m somehow missing the point.

      • Orv says

        I guess that makes sense in terms of making parking easier to find…although it’s no cheaper to park than a bigger car.

      • aw says

        Think of it as revenue enhancement for the parking department. With the kiosk based parking, didn’t they take away the marking of the individual parking spaces? If they can fit in more cars per blockface they get more money.

        That said, there should be a surcharge for Escalades and Expeditions.

      • Mike Orr says

        My friend in San Francisco had a Fiesta that was small enough to fit sideways in a parallel parking row. I’m not sure if Smart cars are quite small enough for that. But I’m sick of SUVs taking up 1 1/2 parking spaces, especially when there’s four of them on a block blocking everyone else out, as if they’re the four biggest VIPs among the hundreds of residents on the block. Seeing the opposite is a welcome contrast.

      • aw says

        Smart cars are small enough to fit into parallel parking the wrong way. According to Car2Go’s parking FAQ, they’re not supposed to be parked that way.

    • Stephen F says

      Thanks so much, Nick, for doing the interview! Great insight into your organisation and its offerings. Nice writeup, Bruce.

  2. Adam Bejan Parast says

    Very interesting. Thanks for the answers. A few notes:

    1. More cars please!
    2. It would be nice to have Car2Go “stands” downtown. Maybe 3 or 4 locations with spaces for 5-10 cars. What way there is at least a few location where you can head to and have a reasonable chance of having a car there. Also makes parking downtown easier. As of 11:45 today there are only 2 cars between 1st and 6th between Yesler and Stewart.
    3.It would be great if you could set your favorite radio presents online and when you rent a car those presets are loaded.
    4.It would be nice if the touchscreen included a timer showing how long your reservation has gone.

  3. Matt the Engineer says

    I’ve used it several times now, and love it. I’m 6′ tall and find it very comfortable. It’s replaced a taxi trip and, yes, two bus trips for me. But it’s restarted the conversation about how to get rid of a vehicle, and how much we’d save by doing that.

    I’ve found that for my usage it’s about half the cost of a taxi, and a little more expensive than a bus ticket (if my work didn’t pay for my bus fare). Of course, these were short trips. If I’d gone across town it could be 3-4x bus fare but still about half the price of a taxi.

    • Matt the Engineer says

      Also, I think the timing of this service is perfect after Seattle’s parking rate increase last year. Since then I rarely have trouble finding street parking at metered spaces even downtown.

      • asdf says

        Is there a map showing precisely which streets downtown it is legal to park a Car2Go at?

        As it is, I’m a bit reluctant to take Car2Go to downtown as the per-minute rate accumulating while I search for parking can add up fast.

      • David Seater says

        From the car2go site:
        “In Seattle, you may park in any non-restricted curb side parking throughout the car2go Home Area as well as any Restricted Parking Zone location. You can park at all parking meter locations without having to feed the meter but may not end your trip in spaces limited to less than 2 hours. You are allowed to park and end trips in 2 hour or greater restricted parking zones. Commercial, valet, and taxi zones are strictly prohibited. Also note that spaces that convert to traffic lanes are also prohibited.”

        My takeaway is that if it’s legal to park there for 2 hours or more at all times of day, you can park a car2go there.

      • asdf says

        I read all that. But I’m not familiar enough with parking in downtown to know which streets allow metered parking for 2 hours or more.

    • Matthew Johnson says

      Is it possible to change the home area? If so, what will guide your changes?

      Yes, within a jurisdiction where we’ve negotiated a deal, home area changes are extremely easy, and we often make adjustments after the initial ramp-up. We base these changes on observed travel patterns, from member surveys which will go out very shortly after the first hundred days, and from customer feedback.

      • sally says

        I don’t know how much ‘member surveys’ would tell you about interest in areas that aren’t served. if the area I am in isn’t served, I likely won’t sign up to be a member….?

        anwho, I had already sent in a comment about the entire WS penninsula missing from their Seattle map.

      • Matthew Johnson says

        Moral of the story, even if your neighborhood isn’t covered NOW go ahead and sign up (and encourage your neighbors to do so as well) while it is free so that they can get an idea of how many potential users they have in a given area.

  4. Pat Petersen says

    My reaction to car2go is that they’ve created a car sharing model that is convenient and FUN to use. I realize this won’t be everyone’s response to it, but I have a number of friends who feel the same way. I think when more people experience the extreme ease of use of car2go they can probably pretty easily visualize living a car(ownership)-free lifestyle.

    I also find parking downtown to be a challenge. I’ve lived in Seattle 5 years and my trips downtown are always via bus or I’ll park in a private garage if I need to bring my car. In other words I’ve never tried to use curbside parking downtown. I used a car2go to get to the movie theater downtown recently and with all of the posted parking restrictions I didn’t see anywhere that was within the car2go guidelines for parking the car. Now I might have been able to find something if I’d circled more blocks but I had a movie to get to and ended up parking on the Capitol Hill side of Pike. So it’s probably not impossible to park downtown but it certainly is a challenge.

    • Orv says

      It really seems perfect for casual, occasional use. I just signed up because it seems like it’d be handy on days when I’ve taken the bus to work and find I have errands to run. I never did that with ZipCar because I wouldn’t be using it enough to justify the monthly fee.

      • Bruce Nourish says

        ZipCar has no monthly fee (unless you spring for the optional deductible waiver). That said, the annual fee ($50) seems to dissuade so many potential casual users that I don’t understand why they bother with it.

      • Orv says

        …and it’s possible the *purpose* of that ZipCar fee is to discourage casual users. They might not want the administration overhead of a bunch of users who only check out a car once in a blue moon. That’d be a valid business strategy.

      • says

        I don’t see what the administrative overhead is. If you’re not using the service, you’re not costing them any money. The only overhead they have is a new member signup (background check, issuing a card, etc) which would be covered by their registration fee.

      • asdf says

        Not having an annual fee could attract some out of town visitors who would only be in Seattle for a few days. Throw in the annual fee, however, and it becomes not worth it. So, instead of having visitors who take transit some days and rent a car for a one-day excursion to Mt. Ranier, we instead have visitors who do a conventional car rental at the airport. Once you’ve already paid to rent the car, even $4 gas often costs less than the bus fare, so anyone acting rationally would just drive the rental car everywhere, unless parking was a significant hassle.

    • says

      I don’t think there’s anything wrong with it being hard to park downtown during most of the day — you can get there on transit pretty easily from most of the region. In terms of downtown transportation priorities, we need better bike facilities and transit support much more than we need more surface parking (and when a project along these lines removes surface parking, as on Broad, I support it wholeheartedly).

      If Car2Go thinks it’s a problem for their business they should work out deals with some of the major parking lot/garage companies (just like they’d have to work out a deal with UW or the parks department).

  5. says

    I think the UW would be difficult. There are only 24 lots that have the capacity of taking in new cars. The four C lots are out because they’re underground. While there is marginal cell reception on the upper levels, getting a GPS fix is impossible and thus you can’t end a reservation there.

    • asdf says

      Ultimately in order for Car2Go to work, the UW would need to be convinced that Car2Go parking spaces serve the student population more effectively than using the equivalent amount of space to house students’ personal cars (which often sit there for days on end before being driven).

      Even if it would ultimately be more efficient, any attempt to substitute premium student parking with Car2Go spots would face a lot of pushback from students who have already made the financial investment in buying a car of their own. It may happen someday, but probably not for awhile.

    • David Seater says

      I think a good start would be letting Car2Go use the street parking west of 15th, south of 45th. Campus lots could come later.

      • says

        That’s already part of the zone. The map is wrong.

        If there’s a car on the map listed as available, the GPS will let you park there. Note however the GPS is dumb and doesn’t know the difference between a 1 hour zone, a 72 hour zone and a no parking zone. But if you try to leave it on campus it will not let you.

  6. John Bailo says

    This model could work well in suburban apartment complexes. You could put a few cars in parking lot for use by the many people who live here…kind of a common service like the swimming pool or health club!

    These then would be cars for those who cannot afford a full car with insurance. I would go so far as to say this type of service should be subsidized as an adjunct to transit.

    • asdf says

      I see the apartments next to the Microsoft campus as a great location for carsharing. Many people who live there walk to work and only need a car a couple times a week, rather than every day. Also, Microsoft stations a large number of interns there, many of which don’t have cars because renting a car for a 12-week period is extremely expensive, especially with an under-25 driver. (In 2005, the cost ran to about $1,000, even with a substantial Microsoft subsidy). Microsoft already even provides free short-term car rentals to interns who don’t have cars as a job benefit. Replacing the current model where you have to get to downtown Bellevue on a bus, then wait in line for half an hour to pick up the car with a model in which the car is right there would make it a lot more convenient.

      • William says

        Former Microsoft intern speaking – Actually, I always picked up my rental cars at 148th and 24th, so it wasn’t too far. Still, I would have really liked this service – and I would still like it now.

      • asdf says

        Ah, it’s gotten better from when I was an intern. At that time, we had to go to the Avis office in downtown Bellevue. But then, at some point, it moved to the Hilton, requiring an additional bus connection to reach. 148th and 24th is much better, although their hours of operation, I’m sure, are still a limiting factor.

    • aw says

      It seems to me that this would fit better with Zipcar’s model of didicated parking spaces than with Car2Go’s model of leave it anywhere. That said, the company wouldn’t want to limit itself to the apartment tenants so I’m sure they would prefer a location that is accessible to the public at large. Regarding Microsoft, parking some shared cars at OTC could make sense.

      • Mike Orr says

        “The company” might do it as part of a partnership agreement with apartment buildings. It would get them customers it wouldn’t otherwise have.

      • asdf says

        One can even imagine the owners of apartment complexes allow Car2Go to include their parking lots as part of its service area at no charge. This would provide an incentive for people to live there and they’d make their money through higher rents or lower vacancies.

        This could work especially well in apartment complexes where oversized parking requirements forced the parking lot to be far larger than what is actually needed to store their residents’ cars.

      • aw says

        I guess I just can’t see why the apartment owners would be keen on having non-residents on their property to access the shared cars. Consider the liability concerns of the business owner.

        Of course, that wouldn’t prevent some other company from using a car sharing business model in which the cars were just shared among the tenants.

      • John Bailo says

        One benefit for the car company is that the landlord has all the financial records of the lessee…so less chance of them damaging, stealing a car or being a known drunk.

        I like the idea of making a car a kind of apartment service, like the pool or common area.

      • asdf says

        The assumption would be that even if non-residents can, in theory, access the cars there, it would be rare compared to the number of times the cars are used by residents. And even some of the non-resident uses might be perspective residents checking out the property or visitors to resident’s apartments.

        I don’t see why the liability issue would be a concern. Non-residents already access the property when visiting the home of a resident. And many Zipcars are parked on private property and are accessible to anyone, even those that would not otherwise have any business there. For example, I have rented Zipcars off the UW campus many times, even though I have no connection with the UW beyond happening to live near their campus.

        If the apartment owner is really concerned about non-resident use, even having Zipcars on the property that were restricted to residents only would still provide a useful service to the residents. Although, then you’d be back to having a service where you have to tie up and pay for the car while it’s parked at your destination, which is a lot less useful than the Car2Go model.

    • says

      In suburban car complexes, if you cannot afford insurance you simply do not buy it. Then, when you get a $500 ticket for not having any, you sign up for insurance making it active the day of your court date and the ticket is reduced to $20. After the hearing is over, you call up and cancel the insurance.

      • says

        Sure, people can do this, but wouldn’t it be better to have another option? The questions are something like:

        1. Is it actually a good deal for many suburbanites? I can see some 2-car households go down to one, for instance, in places where there are some walkable amenities and decent transit nearby. For the most part car sharing is an economical replacement for a rarely-used vehicle… certainly not for daily commutes and usually not even for daily errands. The one-way rentals do make them a plausible option for occasional work commutes, though.

        2. How many trips per car per day could the company attract, and how many do they need to make a profit?

        3. Is there a workable model for C2G at P&Rs? It might bear some experiments if other suburban operations pan out.

        4. If the availability of shared vehicles really provides a better option, in practice, for people that otherwise would own cars and not insure them, is there a state interest in subsidizing them?

  7. asdf says

    One big problem with the expansion of Car2Go to suburban areas is its dependency on street parking. In the city, nearly all destinations have convenient street parking nearby where the car can be returned. However, in suburban areas, the parking for destinations tends to be privately owned lots reserved exclusively for customers of that particular place, while doing business there. For instance, even if Bellevue were part of the Car2Go service area, it’s not clear where you’d park it while you visit an office building downtown or the Whole Foods across the highway from downtown, unless it was a stopover, which would defeat the whole purpose of the Car2Go business model.

    In order for Car2Go to really work in the suburbs, they would have to make special arrangements with the owners of nearly every business or shopping center someone might conceivably use Car2Go to visit that doesn’t have street parking within an easy walking distance. This would be unwieldy at best and it would likely be a very tough sell. Business owners would naturally be concerned about cars being left on their property all day or that their property would end up being used as parking for adjacent businesses.

    Until Car2Go vehicles can be made autonomous to the point where they can drop users off at a shopping destination without actually parking there, I just don’t see this model working in the suburbs.

    The Zipcar model, though, can still work in these environments today, which is one reason why Zipcar includes Redmond and Bellevue and Car2Go doesn’t.

    • aw says

      There’s a little bit of on-street parking in downtown Bellevue if you know where to look (e.g., Main Street between 100th NE and Bellevue Way). There’s quite a bit more on-street parking in downtown Redmond. Of course, with the initial rollout, Car2Go will have much higher priorities just serving Seattle.

      • asdf says

        A tiny bit of on-street parking that is likely to be all taken isn’t going to cut it. There’s no way I would take Car2Go from Seattle to Bellevue if there’s a 50/50 chance that lack of parking will force me to immediately turn around and drive the car back to Seattle again (or pay the hourly rate for however long I’m at Bellevue before I head back).



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