Car-sharing gains a foothold in London

Globally, London is the eighth city to adopt car sharing as part of its transportation mix, with the first testing ground being in the northeast of the city. Since the joint venture between automotive manufacturer BMW and car rental company Sixt launched at the end of last year, it has enjoyed a startlingly swift uptake: more than 10,000 people have signed up for the service in just four months.  

Based on the free-floating principle, meaning that cars can be picked up, driven and dropped anywhere, DriveNow operates in four adjacent London boroughs including Harringay, Hackney, Waltham Forest and Islington.

But getting things moving has been a challenge. Joseph Seal-Driver, director of DriveNow UK, said: “Because we weren’t known in London, there was lot of groundwork to do and it was two years before we started to gain any real traction. Unlike a unitary authority, where you have one decision-making department, there are lots of boroughs to deal with in London, as well as the various stakeholders and departments within those boroughs, such as transport, parking and planning. But now that we’ve launched, car sharing is capturing Londoners’ imagination.

“It’s still a fairly niche service but we expect that, as a location and booking-free, drive-by-the-minute, park anywhere service, it will provide the tipping point that transforms car-sharing into a mainstream mobility choice.”

While there are encouraging signs of early adoption in London, the city still has a long way to go before it reaches the level of popularity enjoyed by its German counterparts. In Berlin, for example, with 980 cars and 140,000 members, the entire city is within the DriveNow business area. Free-floating cars are an integral part of the way the city moves and functions.

So what will produce these sorts of figures in the UK’s capital over the coming months and years? And how ready are Londoners to take that crucial step from ownership to sharing?

Seal-Driver said the value proposition combined may speed things along: “As long as companies offering an alternative to traditional ownership through fractional use, or access to a service or provision personalise the user experience well (Airbnb, Uber, Spotify and Netflix are all good examples of this), people will still see the product or service as their own.”

The BMW DriveNow executive also says customisation and ease of use via mobile app will lure customers onto the platform: “Users can get a snapshot of available cars on their smartphone app, find the cars they like, and see which ones have been recently cleaned and have a high fuel level. Via the app, they also get to choose up to five sat-nav presets ready for when they get in the car. But in the future, we might have even more detailed personalisation, such as your favourite radio station coming on when you start the engine, and the automatic setting of headlights, seat position and mirror angles–these are just a few possible examples.”

Head of government affairs for DriveNow, Michael Fischer, believes that if other city schemes are anything to go by, the shift to shared car ownership in London will begin trending in the next few years. “What we discovered in Germany is that more people are getting rid of their second and third cars and turning to car sharing instead,” he said. “When you consider that, for every shared car, some five to ten private cars are replaced, you start to understand the societal benefits.”

Fischer adds: “In Berlin, 7% of our customers sold their cars. When DriveNow came to market, a lot of people realised they didn’t need to hold on to an aging vehicle. In Berlin today, we have 140,000 customers, which means around 10,000 people sold their car. It’s possible that, in time, London could outperform Berlin.”

Part of the challenge for DriveNow London, then, will be to gain greater knowledge of the needs of its market, by discovering what types of personalisation people want, and this will be key in any future decision to roll the scheme out in the future.

“It’s already a fiscally sustainable business in just four boroughs,” said Fischer. “Right now we’re concentrating on London. In time we will check other cities in the UK for their potential but first we want to understand how Londoners use DriveNow and have that as a template to gain a better understanding of the British market as a whole.”

If there’s one other crucial factor that has made DriveNow possible in London, it’s been the serendipitous fusion of various technological elements, without which the free-floating principle would struggle to succeed.

“Smart phones have made the model viable,” said Fischer.  “Mobile devices provide the flexibility users need. People can use the app on the street to get a pinpoint position on their preferred car, and also access other useful information on the vehicle. Prior to this innovation users would have had to book a car from home at least a day in advance.”

There are still some elements of technical integration that have remained elusive. For instance, using an Oyster card (London’s plastic smartcard for public transport) to open a DriveNow car may be a great idea in principle but it doesn’t work in practice.

BMW’s Fischer said: “We couldn’t use the Oyster card because there are technical incompatibilities and, in theory, people could get in a car without a driving licence. In Germany we had to put an RFID chip on driving licenses so that only those legally able to drive would be able to open the cars but the chips weren’t as stable as we hoped, so we switched to the customer card instead, which is what Londoners use at the moment. But now we’ve teamed up with an innovative partner and developed an app through which you can reserve, open and close the car, which means that people won’t even need to scan the reading device on their card through the windshield anymore.”

Ben Plowden, Transport for London’s (TfL’s) director of strategy and planning for surface transport says the public sector backs the programme. “The Mayor and TfL have long supported the growth of car sharing schemes across London, as they can help encourage more alternative travel choices. The arrival of DriveNow into London will help support more sustainable urban mobility while keeping the city moving.”

Find out more about the paradigm shift in auto-mobility across Europe at TU-Automotive Europe 2015.