Pandemic Proves a Good Gig for Carsharing

The carsharing business may exit the COVID-19 pandemic in a stronger market position than it was in before the virus shut down the global economy last year.

Rental car companies and short-term carsharing firms have seen their businesses stabilize and bounce back resiliently from the near economic standstill of last spring’s quarantines and lockdowns. One company that’s already benefiting is Gig Car Share, a start-up that spun out of the US motor club AAA’s Northern California innovation lab, A3 Ventures, back in 2017.

Gig, an acronym for “Get In and Go,” claims to be the largest free-floating carshare in the US. It operates in half a dozen markets on the West Coast, offering more than 1,000 hybrid and electric vehicles to its more than 70,000 members. “Usage is now outpacing our pre-pandemic usage levels,” Jason Haight, president for Gig Car Share, tells TU-Automotive. He adds: “In 2020, we surpassed one million member trips.”

Haight said the company learned many lessons during the early days of COVID: “The pandemic spurred Gig to be even more agile. The needs of our members changed almost overnight as they looked for more control over their environment.” He said a few lessons that paid dividends include cleaning its fleet more frequently, providing members with safety tips, such as bring your own sanitizer, and advising them to wear face coverings during trips.

The company initially launched in the San Francisco Bay area and has expanded into other markets such as Sacramento and Seattle. In fact, Seattle was surprisingly devoid of carsharing when Gig rolled into town since rivals car2go, ReachNow and LimePod had all pulled out of the city. Haight noted: “Gig entered the Seattle market in 2020, serving new members in a market where more than 100,000 car share users were left stranded and needed a solution.”

While the company was strategic in Seattle, Haight said there is currently no roadmap for further expansion into new markets but he said the company has responded to increased demand for carsharing: “As a result of member demand and feedback, last year, we launched multi-day rentals.”

Carshare boom to continue

Meanwhile, mobility company RideCell found interest in carsharing and car subscription services surging in a survey of more than one thousand Americans. Respondents said their interest quadrupled in these transportation modes compared to their pre-pandemic views.

This interest is not just so much bluster, it is translating into better business for its clients. “Carsharing and the car rental businesses have seen a huge increase in growth,” asserts Mark Thomas, vice-president alliances and marketing, following its creation of a mobility platform aimed at helping companies monetize its fleets for customers including Penske, Toyota Sweden, Renault and Gig.

Thomas said ridership and usage has more than doubled from last spring when shelter-in-place and quarantines were implemented in many places. He added that some markets are reaching new highs: “We’re seeing a 30% increase over the pre-pandemic highs with our customer base. Our carsharing customers are adding plans for day-long, week-long, and even month-long rentals for people that want the convenience and safety of a vehicle without the commitment of ownership or a multi-year lease.”

Nearly half of respondents (42%) changed their preferences for transportation owing to the pandemic. Those who used either public transit or ridesharing dropped from 22% usage of these modes prior to COVID-19, to just 9% as of September. Also more than two-thirds of respondents that relied on public transportation before the pandemic expressed interest in using short-term vehicles and 57% of this group said they would use this short-term mode weekly or monthly. Thomas notes different forms of mobility are stronger in different markets: “In China, ridesharing has come back to be stronger than in the pre-pandemic times, but in Europe and North America, we’re seeing carsharing as the high-growth shared mobility market.”

Meanwhile, IBISWorld data forecast the $1.3 billion global carsharing industry to grow 4.3% in 2021, just off the pace of the 5.6% average annual gains of the past five years. A McKinsey global survey found carsharing the top choice among respondents who were asked which modes of transportation they would likely use after the pandemic. Carsharing ranked higher than public transportation, ridesharing, car rental, carpooling, car subscription, and micro-mobility options.

Carsharing companies are in the driver’s seat among most mobility modes, so it is now up to the individual companies to respond by converting greater consumer interest and trust in the short-term transportation mode into long-lasting customers. Haight summed up the situation and the opportunity: “The needs of our members changed almost overnight (and) we have seen interest in car-sharing rise based on our members’ desire to control their environment and we don’t see that changing anytime soon.”