By on February 7, 2014

Car2Go-LEAD

BMW has announced and Audi hinted at (via trademark filings) brand-owned car sharing services. But if luxury automakers get serious about the game of car sharing Daimler is poised to win and here’s how.

In the U.S. Car2Go has worked very hard to not only be in urban areas across the U.S., but to also develop parking agreements to allow users of their service the freedom to park anywhere, for free. This helped give Car2Go an advantage over its competitors which typically require loaner vehicles be returned to a designated parking spot. 

A recent survey conducted by Alix Partners found, among other things, ease of ease of access and convenience ranked at the top of the list for why people participate in a car sharing services.  

Car2Go, the fleet of park-anywhere blue-and-white Smart Fortwos, is a global brand owned by Daimler, parent company to Mercedes Benz. While the fleet of Smart ForTwos will work for most people and I’m sure Daimler was happy to report the small cars as ‘sold’, what if Daimler decided, or the market decided for Daimler, that it was time to add a little luxury and practicality to the fleet of small utilitarian cars.

Imagine the headline:

We are proud to announce that the CLA and GLA are now available at Car2Go!

The two entry-level vehicles would allow Car2Go to offer to its users a more practical vehicle and attractive vehicle, yet one that is still small enough for city duty. Presumably the value in the smaller luxury vehicles is to entice new buyers to the brand and what better way than car sharing. 

I envision this being a part of a new two-tiered approach that maintains the standard Car2Go rates via the Smart ForTwo, but would introduce a new premium option featuring the CLA and GLA. Seeing that all the logistics, business operations, city agreements and branding has already been established the only cost would be the vehicles themselves, the retrofitting of Car2Go use-technology and a small amount of marketing for the new premium service.

Could this work? Could Daimler, in select cities, offer a Car2Go premium service using the two new entry-level luxury offerings from Mercedes Benz? Before you start the whole “this will cheapen the brand” let me remind you that these are (advertised) as sub-$30K vehicles. If there was any cheapening of the brand it happened when the products became barista lease-affordable.

Alix Partners LINK: http://www.alixpartners.com/en/MediaCenter/PressReleases/tabid/821/articleType/ArticleView/articleId/950/AlixPartners-Study-Indicates-Greater-Negative-Effect-of-Car-Sharing-on-Vehicle-Purchases.aspx

Audi car sharing: http://oppositelock.jalopnik.com/is-audi-access-a-new-car-sharing-service-1245649561

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37 Comments on “Could Daimler make premium car sharing a nationwide reality?...”


  • avatar
    bumpy ii

    Long-term, the biggest threat of manufacturer-owned car-sharing services is to the existing daily rental business. Why bother with Enterprise or Hertz when you can walk down the street and grab an A3 for the weekend?

    • 0 avatar
      rdchappell

      They have different purposes. Car-shares are not economical for more than a few hours. Say you wanted a car for a day, a Zipcar is about $70 with a 180 mile limit or you could rent a car $20 plus pay your own gas with unlimited mileage. It all depends on what you want to do.

    • 0 avatar
      mcs

      >> Why bother with Enterprise or Hertz when you can walk down the street and grab an A3 for the weekend?

      Hertz already has a service. I’m a member and have a yellow Hertz key fob to open the cars. They also have trucks located at Lowes for home center runs.

    • 0 avatar

      between bmw audi and mercedes-benz, i prefer to have bmw in greensboro any day

  • avatar
    Pch101

    “Could this work?”

    The rental rate has to be high enough to cover the additional costs of the underlying implied purchase price. That would make me question its potential for profitability, unless Daimler just sees this as a way to rent out CPO cars in advance and is willing to eat some losses.

    The size of the cars may also work against them, given the urban demographic of car sharing services.

  • avatar
    Stumpaster

    Oooh, so exciting. Except that zipcar has offered luxury cars for years. They are not particularly popular but a nice option to have. My best was a 3-series with 80 miles on it for my 400 mile trip. Not a good highway cruiser, btw.

    • 0 avatar
      Pch101

      How was the pricing for that? I haven’t looked closely at Zipcar, but it seems to be more costly than a typical daily rental for anything more than a few hours, particularly if the free parking benefit isn’t needed.

      • 0 avatar
        hubcap

        Daily rates at Car2Go aren’t cheap. I believe somewhere in the $70.00 range for a Smart. Mon Dieu!

      • 0 avatar
        Kinosh

        I’m fairly certain you get 120mi/day and its $.55/mi after that…

        Why not take a rental?

        • 0 avatar
          Lorenzo

          Two words: Impala classic.

          I’ve tried to reserve compacts, sub compacts, and stucco-boxes, and all they have left is full size cars. I get “upgraded” for free, but full size cars are not what you want to drive in an urban area like Boston, Providence or Hartford, where streets were laid out by meandering cows in the 17th century.

        • 0 avatar
          Stumpaster

          I forget the maths but at that time it still made sense to just grab the zipcar. This is NYC we are talking about, not Topeka KS.

          • 0 avatar
            bomberpete

            @Lorenzo – you’re totally right about Boston. Maybe it’s because I’m a native who knows my hometown streets, but I’m one New Yorker who finds Boston confounding. It’s a running family joke that I shouldn’t drive in Boston. The parking isn’t fun either. I just stick with the T whenever possible.

            @Stampaster – In NYC a Zipcar is $9-$14/hour for non-lux vehicles. If you only need 4 hours or less before going back to the start location, they’re phenomenal. If you need more time than that, get the rental.

            Avis bought Zipcar. Now Hertz, Enterprise and other locals have become decent car-share competitors.

            I’d never use a Cars2Go Smart Car again. They literally make me sick. While I guess a CLA would be OK @16/hour or so (about what Zipcar charges for a 3-series), I have my doubts. I suspect the marketing types at Daimler will try getting people to pay for the M-B “experience.” In that case, I hope they choke their greedy little throats on weinerschnitzel.

      • 0 avatar
        bomberpete

        I use Zipcar but never for longer than 3-4 hours, paying tops of $50 but typically less. It’s a good service. My favorite ride is a bright blue Mazda3 hatch in the building around the corner.

        In NYC a typical “day rate” on a ZipCar is about $120. On a weekend day, that’s about $20 more than as a Hertz/Avis from a Manhattan location. A standard rental is much cheaper on a weekday. The difference is that Zipcar includes gas but only 150 miles, whereas standard rentals you buy the gas and get unlimited miles. I guess it all depends on your needs.

        Zipcar’s big drawback is that the time limits can be stress-inducing. If you have to notify them to extend your reservation in 30-60 minute increments. One time the traffic was miserable, I had a screaming baby and couldn’t reach Zipcar because my cell phone died. I was 30 minutes late and paid a $50 fee.

        As for the article, I don’t see what that craptastic CLA brings to the picture. I doubt many car share members will look at that and go “wow.”

      • 0 avatar
        ect

        In Toronto, the Autoshare rate is 9.25-10.25 per hour, the daily rate $70-76,, depending on the membership level (frequency of use). Budget’s daily rate in the city is $48-53. At first blush, sounds like a no-brainer.

        However, Autoshare’s price is all-in, including gas and insurance. At Budget, you have to buy gas and insurance (beyond basic)separately.

        To rent from Autoshare, I go online, reserve a particular car at a particular spot, takes about a minute to complete. The car is parked within a 5-minute walk from home. At the reserved time, I walk to the car, swipe my card to unlock it, and drive away. When I return, I exit the car, swipe my card to lick it, and walk away. Easy.

        At Budget, I have to go to their location (20 minutes or so by transit), deal with paperwork, stop to buy gas on the way back, deal with paperwork again, and find my way home. Not so easy.

        For 2-4 hour missions, carshare is streets ahead of conventional rental services. Daily, it’s more a toss-up, based on how you prefer to trade price vs. convenience.

    • 0 avatar
      rdchappell

      How did you get past the 180 mile limit?

  • avatar
    CoreyDL

    I thought the purpose of Car2Go was for people who only needed cars occasionally, so this renting a little car for a special purpose made sense. It won’t get many to step into the dealer, because they aren’t interested in OWNING a car.

    And if you want a “premium” car for a “special purpose,” turning up in a FWD compact Mercedes with a big blue stripe isn’t gonna cut it.

    “Hey you guys! Look at this ugly paint scheme Mercedes I for sure DON’T own! I’m fancy!”

    • 0 avatar
      hubcap

      “It won’t get many to step into the dealer, because they aren’t interested in OWNING a car.”

      Not interested now but plans change. Customers move further out and now meed a car. I’m not saying this will happen in any appreciable amount but I see where Juan is coming from.

      Your point on the paint scheme is valid. I’d hope they just use solid colors but who knows?

      • 0 avatar
        bomberpete

        Juan’s right that the “cheapening the brand” argument is irrelevant. M-B began that process as soon as early Nineties high currency rates and Toyota losing money on the first Lexus LS 400 put them on the run.

      • 0 avatar
        jim brewer

        I think so. My college student is probably three years or so from owning a car. Zipcars has definitely shaped my kid’s preference (Hyundai Elantra, Mazda 3).

    • 0 avatar
      Maymar

      I’m a Car2Go member since it cost me nothing to sign up (promotion when they first started in Toronto), and there’s no yearly fees, so it’s nice just to have a guaranteed backup if anything happens to my daily driver. That said, depending on the length of the trip, it’s often cheaper than public transit (if my wife’s coming with me) or parking downtown. Solid taxi alternative as well, or if I know I’m drinking that night, I don’t have to worry about getting my vehicle home.

  • avatar
    TW5

    Car-sharing is a way to sell services to car-free urban dwellers, and it’s a hedging strategy against rising numbers of car-free households.

    If the manufacturers are looking for a new nation-wide reality, it’s fleet services for non-commercial customers. Allows the manufacturer to capture the insurance, repair, and rental industries. Drivers get access to specialized vehicles rather than beige compromise. Don’t know if it will ever happen, but the potential is present.

  • avatar
    Mullholland

    I live in southern California, a good option for me was RelayRides.com. Private vehicles. My insurance. Just needed a small pickup truck to move some of my daughter’s furnishings from OC to Brentwood. Worked great very smooth and easy—$27 bucks for one 14-hour weekend day.

  • avatar
    Maymar

    I actually recieved a Car2Go survey about a week ago, where they hinted at this possibility. I’ve wondered for a while if they’d ever expand the service to include the B-Class (which we get in Canada), as the next cheapest Benz.

    It generally doesn’t fit how I use the service, but if it were made available, I’d certainly take one out for a spin, for the hell of it.

  • avatar

    I would NEVER share my SRTs with ANYONE.

    I wouldn’t even let my own momma drive them.

    Lend her some money for a rent-a-car…

    “Premium car sharing”… Now you’ll see a bunch of weekend wannabes in CLA and BMW 4′s.

  • avatar
    dartman

    “I would NEVER share my SRTs with ANYONE.”….Really???

    http://www.youtube.com/watch?feature=player_detailpage&v=KC5G7Vrut-Y&list=PLBBCng0jCM5AgFP-XSRZk2HlkrPnhrqtp

    youtube.com/watch?v=fj2qrQRjLTs

    p.s. your welcome. I hope the hits help with gas money…


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