The best solutions are the simple ones. The ones after you see them you cannot believe people had not thought of it sooner.
Anyone who has lived in a city has thought “I just need a car for like 5 minutes”, and then starts the mad scramble to borrow a friends’ rig. You bike, you take the subway, you walk, it’s just those couple of times that you want a car. Car2Go fills that void.
The economics are pretty easy, pay for only the minutes you are using the car, avoid the high cost of car ownership. Here in Seattle it is about 50 cents per minute, which is great for bopping from A to B. So long, that is, as A and B are close together, and free from crippling traffic –read: Portland– and have plenty of public parking.
Car ownership is not cheap; initial high fixed cost, the variable cost of gas, maintenance, and insurance, not to mention it having a huge opportunity cost, all combine to make it rather burdensome. Really though, that is not why Car2Go is working so well: it is the low cost per minute rate for occasional usage.
Sure bike and public transit offer lower rates, but the former requires a huge input of sweat equity and the latter a large dose of patience.
Car2Go grants access at the wave of a card, does not require users to bring the car back to a specific location, and incentivizes them to fill up the gas using Car2Go money. Just pop open the app, find a car nearby –reserve it for up to thirty minutes if you really need it– and go.
There are certainly very upfront flaws in their system: You cannot really leave the Car2Go specified zone, you are at the whim of other drivers for access to vehicles, and you are driving what amounts –both in performance and safety– to an engine inside a soda can. The biggest flaw is the size of the car; perfect for going to the grocery store, so long as you only pick up baby carrots, because anything bigger than a watermelon and you will start getting claustrophobic. Do not even think about a trip to Ikea.
Driving a Smart ForTwo –the Car2Go car– the American average 12 thousand miles a year, and owning it for the American average 6 years, buying it for the American MSRP of $12,500, getting its estimated around 35 MPG and paying $3.50 for the gas, leaves the cost at about 27 cents per mile.
Assuming low maintenance costs, really cheap gas, and lots of miles per year, yes, you would save money by purchasing the car. When it comes to cars though, Murphy’s Quantum Law is in full effect.
Car2Go really is not disrupting, it is not unpacking anything. Zipcar works much better for long trips because it is less expensive, Lyft and Uber for taxing people, and public transit for a more inexpensive option, especially over distance and time. Instead, they are finding the relatively large segment of people who want car ownership, solely though in short bursts and on demand. The next logical extension of this is the fully autonomous car, but let Google worry about iterating that.
Car2Go excels in about as many ways as possible for a service you may use for a handful of minutes and a pocketful of change at a time. So while it might not be the least expensive, the best long term solution, or even the most comfortable, Car2Go certainly is pulling into the fast lane.