Moscow Takes Punt on State-Run Car-Sharing

By Roman Nazarov

---

2nd December 2020

The city department of transport is developing a digital platform for car owners who may be happy to share their vehicles with other drivers.

The officials has been playing with the idea for two years. Yet, it’s only now that the government is hiring software development staff into the project with the final release due in 2021. Conceptually, it will be an online marketplace with private cars available for rent during, say, their owners’ working hours. Playing on nostalgic feelings of the city’s residents about the “good old Soviet days”, the mayor of Moscow, Sergey Sobyanin, introduced the project as ‘The People’s Car-sharing’. “I think that such system could be well taken up in Moscow,” he said.

The program looks like a typical peer-to-peer scheme but consider one detail: globally, examples of state-owned car-sharing systems based on fleets of private cars hardly exist and there aren’t any in cities with seven-digit fleets of private cars. That makes the Russian capital’s project a first-of-a-kind experiment coming with a number of opportunities and challenges.

It’s about trust

For a start, the mayor is, obviously, not concerned by the fact that a number of peer-to-peer car-sharing platforms launched previously by private companies have not become a hit. Moscow’s world-largest shared fleet is, effectively, owned by the providers.

Although the owners of private cars may be happy their vehicles to earn extra money instead of spending it on parking fees, the security concern scares them off the scheme, says Alexey Popov, a car owner who offers his Kia Rio through the private platform RentRide. This year’s data by news site Truesharing.ru showed that 1-in-25 users in Moscow’s three largest shared fleets vandalized a rented vehicle, an unbearably high level for private owners. That explains why take-up of peer-to-peer solutions is weak.

Popov remembers his own hesitation before joining the ranks of RentRide participants. The company’s user policies, some of the strictest in the market, inspired him to try. RentRide accepts only applications from entrants with clean driving record. On the darker side, a flow of negative reviews from rejected users flies in the face of the provider. “It is certain that the government needs to provide two terms in order for the project to be successful among car owners, that is profitability and security,” Popov says. “If they do, then why not try?”

The People’s Carsharing, as depicted by the authorities, will suggest a spicier mix of benefits and risks. Parking benefits are, definitely, the strongest reason to try the municipal scheme. Yet, vehicle owners will have to invest in a telematic unit and buy a multiple-driver insurance plan. The security policy is vague. As head of the city department of transport Maxim Liksutov stated in a September blog post: “The mobile app will be a city government’s property and we will cautiously check the renters’ driving experience… you as an owner of the car will define yourself who can rent a car (age, experience and more) and where the users can end the trip.”

No projections, please

Some of the obstacles can naturally vanish, others cannot unless being catered for. Particularly, citizens’ trust in security of user data in the hands of the city council stays relatively low because of a lack of transparency. Mandatory telematic units will be another threshold for some of potential participants. Nevertheless, affordability of telematic equipment is gradually going up.

After all, the exact balance of pros and cons in The People’s Car-sharing remains unclear. Most importantly, people’s skepticism in the sharing model is sharply declining, says RentRide’s CEO Alexander Ladygin: “We already witnessed how fast the situation can change under influence from the media. In the last four years, the number of web searches for information on leasing a private car surged 15 times.”

Thus, projecting the past dynamics into the future must be done cautiously. “There is, definitely, a group of car owners who under no circumstances would grant their car to anybody,” Ladygin says. “In some part, this mentality comes from the Soviet period of history when a car was the only and most expensive private property, possessing a one was a luck rarely happening twice in a life. The opposite polar is formed of people who think of a car as more of an asset than a property. The latter comprise the ranks of early car-sharing adopters while the majority of drivers have not made up their minds yet. Although the share of early adopters is still small, the stable core of users is already formed.”