There is no question of the success that carsharing platforms have seen over the past decade. This progress is evident throughout large urban areas, in both the developed and the developing world. Users book 2.5 billion carshare minutes per year globally, with the largest market currently in the Asia-Pacific region. But what about corporations, and how do they impact shared mobility?
Corporate carsharing allows employees to make use of a fleet of vehicles for their business and in some instances, personal travel needs. It offers both economic and environmental benefits to each company, but in some studies particularly in North America and also in Belgium, corporate carsharing has been slow to start and even rejected in some cases.
BENEFITS OF CORPORATE CARSHARING
Corporate carsharing helps companies eliminate or reduce the need for privately owned vehicles. Through these services, corporations can reduce their carbon footprints, reduce parking demands, and most of all, improve the quality of life for their employees. It is a long-term, sustainable transport solution for employers in both public and private sectors. The main benefits of corporate carsharing include:
- DECREASE IN CONGESTION: With a single shared vehicle replacing up to 15 vehicles on the roads, corporate carsharing/carpooling eases traffic congestion on the roads, limits carbon emissions and employee stress, helping the company fulfill its corporate social responsibility.
- FLEXIBILITY: The flexibility of booking a range of different vehicles, as and when needed, is advantageous to employees.
- REDUCED COSTS: Corporate carsharing enables companies to save more money by reducing the total cost of mobility, such as with company cars and allowances, by up to 30%.
- EFFICIENCY: When a corporation runs a carpool instead of individual corporate vehicles, someone at the organization becomes the key and fleet manager. This causes a lack in efficiency, as people inevitably forget to bring keys back and so forth. Adding a carshare technology streamlines this process, increases efficiency, and reduces administrative cost.
DriveNow is a carsharing service wholly owned by the automotive manufacturer BMW. DriveNow service began in Munich, Germany in June 2011. As of October 2017, DriveNow operated over 6,000 vehicles in nine European countries.
However, only two years after its launch in Brussels, DriveNow has amassed a debt of €3.25 million, according to De Tijd newspaper. The company has 26,000 users for it’s 300 cars but needs at least 60,000 to be profitable. One reason for its lack of success is the popularity of company vehicles in Belgium. Since company car expenses are taxed less than extra salary, this is the popular reward scheme from employers to employees in Belgium. This is why more than 500,000 Belgians drive their own personal company car and would have little requirement for any available carshare services.
The Belgian government has approved a mobility budget proposal. It will give employees the right to make use of a ‘cash for car’ scheme, allowing them to trade their car for money to be spent on mobility services, or for a more environmentally sustainable model – either a full-electric or one with a low carbon footprint. This will enter into effect of January 1st 2019, but whether or not it has enough interest from the Belgian workforce to create a mobility revolution is yet to be determined.
American corporate carsharing
North American business fleets are also lagging behind other markets in embracing carsharing. One obstacle in the American carshare business market is that driving is just too cheap. With gas and other costs half to one-third what they are in Europe, the incentive to use a carshare/rideshare platform isn’t strong enough.
Also, like in Belgium, company cars are a common occurrence for American businesses. Drivers may use their cars for work buy also for personal use. Taking away an employees assigned vehicle in exchange for an accessible fleet of cars is a massive corporate cultural change that many businesses aren’t willing to welcome just yet.
movmi’s CEO, Sandra Phillips says this is why fleet sharing is more common amongst government and educational institutions in a recent article by Fleet Management Weekly. For them, carsharing is “a natural fit. But for corporate fleets, transitioning to carsharing is really a hard cultural shift to make.”
Katelyn Chesley, a spokesperson for Zipcar said its 20,000 business customers in the U.S. are “primarily small business users” but it also has corporate accounts for individuals at such big names as Google, Microsoft, Salesforce and Twitter.
THE FUTURE OF CORPORATE CARSHARING
There are three models for corporate carsharing as asserted by Mark Boada of Fleet Management Weekly, which include:
- COMMERCIAL CARSHARING: The easiest way for corporate fleets is to cover or reimburse their employees for using a vehicle from a commercial carsharing service and the savings can be significant compared to leasing or buying a car for employees.
- IN-FLEET SHARING: In some instances, employees will always need to drive a personal car depending on their position. If companies make the best use on carsharing within their fleet then can downsize by up to 25%. This could mean savings of up to a million dollars a year.
- SHARING BEYOND FLEET BUSINESS: This model is aimed at creating revenue for the company by having employees pay to use the fleet services outside of company hours. Drivy, a French-based carsharing services firm, enables business fleets to share their vehicles with the general public.
This final model is where North American companies, presently draw the line with worries of insurance and risk management. Carsharing both threatens and offers opportunities to businesses which is why it has been very slowly adopted by corporations. However, Frost and Sullivan predicts big things for this market – the number of vehicles in corporate carsharing fleets is set to rise from approximately 2,000 in 2013 to anywhere between 75,000 and 100,000 by 2020.
To read more about the growth of the carshare market and the key players to watch out for, check out our blog post here that focuses on market analysis. Questions about corporate carsharing? Get in touch with us here.