Car Insurance Car

DB, theDeutsche Bahn, the German railroad operator, has been actively branching out from moving people on rails, offering carsharing (DB Carsharing), car rental (DB Rent) and even bike sharing (Call a Bike) in many German cities. Now they've created another service and another brand, with a unique service model - a hip carsharing service that appears to take it's queue from Zipcar - called Flinkster.

After several months of rumors, Flinkster finally launched in Stuttgart last week, while the launch in Köln announced but, as yet unspecified. Early reports indicated it was going to be similar to the "floating fleet" concept by Daimler of car2go in nearby Ulm, Germany, which would allow vehicles to be parked anywhere in the downtown area. But with actual launch, there's no indication that Flinkster is anything more than a hip version of classic carsharing. Flinkster is actively seeking parking places in these cities and will pay a bounty of membership, usage or even a 2nd class rail pass for parking spaces. Interestingly, the maps provided on the Flinkster website are the DB Carsharing maps and list all vehicles at a location - with Flinkster appearing as one of several classes of vehicles at a location. Here's an early map of the "floating fleet" area, now nowhere to be found on the Flinkster web site. Instead,

The best rate offered by Flinkster is € 1,50 + € 0,25 per kilometer (the equivalent in US dollars of $2 per hour + 20¢ per mile). In comparison, the standard rates for Cambio Carsharing in Cologne charges € 1,70 per hour + € 0,31 per km. But Flinkster's "occasional user" rate actually makes them the highest in Stuttgart according to a comparison done by German carsharing blog. Flinkster offers an increased insurance coverage of € 4 per trip or € 10 per month - reducing the deductible from € 1000 to € 300 per accident.

Cambio reported has about 250 vehicles and over 7,000 members in the city. In one news report Cambio spokesperson is quoted confidently stating, "About Flinkster we are relaxed, our biggest competitor is still car ownership." True, but...

In an interesting move, Flinkster partnered with Alfa Romeo, but not to provide sports cars, but a very nice 2 door, 4 seat sedan, the MiTo, equiped with Bluetooth and CD/mp3 players to appeal to the youth demographic DB says it's after. They emphasize that vehicle meets the strict Euro 5 CO2 standard.

For what it's worth, the name Flinkster was created by a real marketing person. "Link" in German has a similar meaning in English. "Flink" in German means quick and the "ster" (as in "friendster" or "hipster") to make the whole thing personal and cool - sort of "Quick-link-ster"

Perhaps DB wanted to get Flinkster launched and will implement the "floating fleet" concept at a later time (the operational challenges are significant). Otherwise, it seems strange to create a separate brand, especially one that seems likely to cannibalize customers from DB's existing carsharing and rental car services as well? It's worth remembering that for the past decade Germany has been allowing competition in passenger rail service and there are many other regional passenger rail operators, such as Metronome, that offer service renting DB tracks. So it appears that DB has gradually been trying to position itself as an all-around mobility provider, as well as providing rail passengers with the convenience of "combined mobility" (a concept that was first gained prominence about 20 years ago (in an early Swiss carsharing report, "Carsharing - the key to combined mobility").

We will watch with interest. The times they are a changin'.

Sunday's New York Times has a very nice article about carsharing, including a little history of yours truly, as well as Zipcar founder Robin Chase. I think the author Mark Levine has done a nice job telling the story, but then I'm biased since I'm quoted.

Something else the article talks about is the differing views of for-profit and nonprofit carsharing companies. Rick Hutchison of City Carshare is certainly right in saying that carsharing (in it's present form at least) is a low margin business. All companies have been struggling valiantly to increase profit margins since the day they started - for-profits to deliver returns to their investors and nonprofits to avoid rate increases (or maybe even lower rates if they got really big). The entry of car rental companies onto the field suggests they've also run the numbers and think it's not as low a margin business as it appears. My view is that there's room in most, if not all cities, for both for-profit and nonprofit carsharing. After all, less than 1-2% of people living in most neighborhoods served by carsharing are members, so it's not as if there isn't huge potential. In the short run, either one or the other company might give up or they differentiate themselves sufficiently to attract different customers.

I particularly liked this anecdote from Zipcar founder Robin Chase quoted from the article) because it gets to the heart of the dilemma about carsharing:

She and [business partner Antje] Danielson came up with a list of five potential names for the company, and Chase walked around Boston asking people on the street for their reactions. “Antje really wanted to do ‘Wheelshare,’ ” she says, “but that seemed too close to ‘Wheelchair.’ Then we tried ‘U.S. Carshare.’ That was how I learned that 40 percent of the people I talked to had an extremely negative reaction to the word ‘sharing.’ The word makes people nervous. They feel they’re being scolded or told to wait their turn. At that point I banned my staff from using the phrase ‘car sharing.’ Do we call hotels ‘bed sharing’? That’s way too intimate. Do we call bowling ‘shoe sharing’? Who would want to bowl?” Chase landed on the name Zipcar, accompanied by the slogan “Wheels When You Want Them.”



Since we're talking about history, here are some more screen shots from early Zip and Flex web sites (courtesy of WaybackMachine.org). As with Zipcar, Flexcar under founding CEO Neil Peterson, CEO of Flexcar, would avoided the "S" word.


Flexcar's first site hit cyberspace on May 10, 2000 and Zipcar's a few weeks later on June 21. Flexcar stuck with their "Shift Your Thinking" slogan until Revolution LLC came on the scene in 2006 and they decided that "sharing" wasn't a problem and declared themselves to be "the car-sharing company" as well as "the nation's first and best carsharing company".


Both Flex and Zip web sites underwent major upgrades in 2002, with Flexcar losing the orange in the X (apparently in a dispute with Cingular cell phone company which had a remarkably similar image at the time.


That same year Zip tried out another car logo...

...until they came up with their current Z version.

Here's City Carshare in the "old days", also back in 2002.

Sorry, no iconic green VW Beetle on their home page at the time. (Comically, Zipcar actually threatened City Carshare with legal action claiming that Zipcar had trademarked the green Beetle, even though CityCarshare started using them first.)

And to complete our little historical romp, although the original CarSharing Portland website isn't available, here's what the original brochure looked like (circa 1998):

Enough nostalgia. Onward.

Please give me 30 minutes of your time - either now or sometime this week to watch this video.

You probably wouldn't be reading this if you weren't an environmentalist of some sort. Whether you're trying to save the world one car or bicycle at a time, or trying to make money helping others do the right thing, the environment is the next frontier. On some level we all know there are big changes in our lifestyles ahead for all us, but exactly how big and exactly how do we, the people who are used to living in the lap of luxury, get there?

That's the topic of a very interesting talk given by Dr. Saul Griffith. He's a MacArthur grant-winner who has put together Wattzon.com - an online tool that gives a much more comprehensive understanding of your total lifestyle footprint - and how to reduce your role in climate change. In this dense but understandable talk from the PopTech 2008 series, Griffith uses his own life as an example and show where he uses energy, the consequences of not making changes, how he will have to adjust his lifestyle and how you can figure the same things out for yourself.

I think you'll find it well worth the time. Let me know what you think by posting a comment below. Thanks.

I regularly get inquiries from people in retirement communities who realize that many residents are spending a lot of money owning vehicles that mostly sit around and realize that carsharing could be the answer.

I've heard that a few urban retirement complexes have had carsharing vehicles at them, most retirement communities are not located in urban centers, so doing-it-themselves is the only option at the present.

The most important issue to figure out is vehicle insurance - after that everything is easy. As everyone interested in carsharing finds out very fast, the carsharing concept is not embraced (or even very well-understood) in the insurance world. The insurance options vary depending on the business model that's set up - so it's a sort of catch-22 situation - you can't get a quote until you decide what kind of company you're going to be and you're not sure what kind of company you should be until you get an insurance quote.

It's worth noting that most commercial carshares have a 70+ age cut off, after which technically the member needs to provide an annual letter from a physician indicating they are fit to drive. That requirement by itself will often get a senior's blood pressure up a couple of notches all by itself!

To anyone contemplating starting a carshare, I would pose a couple of questions:

How large is the group of residents that wants to participate? If it's 5 or 10 households it's possible that doing something informal will be easier than trying to set up a formal business. Set up an LLC company to own the vehicle(s); agree the financial issues and on how to reserve the vehicles and how you'll notify each other. I'm told that Progressive has written a business policy for non-related individuals. Don't give up, keep asking.

If you see the service expending to more than 3 vehicles, you're probably looking at a creating a separate entity - nonprofit (or possibly for profit business) - to manage things. The options would be to set up a nonprofit or to build consensus within your group to have the management of your retirement community run the service (after all they probably already provide some transportation-related functions like vans to events). They could add the vehicles to their corporate liability policy (if they wanted to).

Establishing a nonprofit to operate the business itself seems the most likely. It could contract with a local garage to maintain the vehicles and clean them twice a month. The board would establish policies on membership, payment, reservations, gas reimbursement, etc. Many nonprofit organizations get their insurance from Non Profit Insurance Alliance of California, which works through brokers in many states.

Establishing a nonprofit corporation is very easy in most states. Don't worry about getting federal tax-exempt status for your nonprofit at this point, it's not nearly as important as you might think. It's primary benefit is to enable people who make donations to your nonprofit to write them off on their taxes. Any nonprofit can offer that right now by setting up a deal with organizations such as this or this.

A final possibility is to contact Enterprise WeCar, U Carshare or even Zipcar to see what their terms might be.  Typically, they will be looking for a minimum guaranteed usage revenue - probably over $1,000 per month and a minimum number of vehicles.  It's not worth your time to start talking to these companies until you have a pretty good idea of the number households that might be willing to use the service and how much they might drive.

January is time for the annual Transportation Research Board meeting in Washington, DC - the leading meeting of academic and industry research an information. Several sessions will cover carsharing topics at this year's TRB starting on Monday afternoon, January 12. All will be held at the Hilton Washington, 1919 Connecticut Avenue, NW, Washington, DC 20009 (Dupont Circle Metro stop).

General information about TRB and the annual meeting can be found the TRB website. Your author will be at most of these sessions, as well as the special session on Sunday afternoon, January 11, about public bicycle systems, a topic that also interests me.

The annual meeting of the "carsharing" subcommittee will meet on Monday, January 12 from 1:30 to 3:15 pm at the Hilton, Dupont. (The subcommittee is changing its name to "Shared-Use Vehicle Public Transport Systems subcommittee of the Emerging and Innovative Public Transport and Technologies Committee (AP020).

Sessions about carsharing at this year's TRB include the following. Click on the hyperlink for each session title to get easy access to full descriptions of each paper. PDFs of the full papers are included on the CD proceedings included with conference registration ($500).

Session 409 - Carsharing as a Climate Change Mitigation Strategy
Monday, January 12, 2009, 7:30 PM - 9:30 PM, Hilton
Matthew J. Barth, University of California, Riverside, presiding

This session explores the potential of carsharing as a greenhouse gas mitigation strategy. It includes presentations on the impacts of carsharing including auto ownership, fuel use, vehicle miles traveled, and modal shift. It also explores the role of public policy in supporting this transportation alternative.

Assessing Greenhouse Gas Emission Impacts from Carsharing in North America (P09-1731)
Elliot Martin, University of California, Berkeley

Carsharing: An Urban Climate Strategy in the U.S. (P09-0666)
Sharon Feigon, I-GO Car Sharing

Role of Carsharing Policy in Greenhouse Gas Emissions (P09-0661)
Kevin McLaughlin, AutoShare

Carsharing in the Twin Cities: Measuring Impacts on Travel Behavior and Automobile Ownership (09-0446)
Frank Douma, University of Minnesota
Ryan Gaug, Minnesota Department of Transportation

The following posters are also scheduled for TRB. Authors will likely be present during this scheduled time:

Poster Session 549 Carsharing and Shared-Vehicle Research
Tuesday, January 13, 2009, 2:30 PM - 5:00 PM, Hilton
Susan A. Shaheen, University of California, Berkeley, presiding

Modeling Activity Persistency of Carsharing Members Using Dynamic Ordered Probability Model (09-0693)
Catherine Morency, Ecole Polytechnique de Montreal, Canada
Khandker M. Nurul Habib, University of Alberta, Canada
Vincent Grasset, Ecole Polytechnique de Montreal, Canada
Hamid Zaman, University of Alberta, Canada

Evaluating the Effect of Carsharing: Exploring the Gap Between What We Know and What We Need to Know and Its Effect on Optimism Bias (09-0742)
Gil Tal, University of California, Berkeley

Wireless Networks for Car- and Ridesharing Systems: Assessment of 802.11 Wi-Fi (09-0750)
Rex Chen, University of California, Irvine
Amelia Regan, University of California, Irvine

Concepts for Large-Scale Carsharing System: Modeling and Evaluation with Agent-Based Approach (09-1888)
Francesco Ciari, Swiss Federal Institute of Technology, Zurich
Michael Balmer, Swiss Federal Institute of Technology Zurich
Kay W. Axhausen, Swiss Federal Institute of Technology Zurich

Carsharing in France: Past, Present, and Future (09-2007)
Robert Clavel, CERTU, France
Muriel Moriotto, CERTU, France
Marcus Paul Enoch, Loughborough University, United Kingdom

Carsharing and the Built Environment: GIS-Based Study of One U.S. Operator (09-2963)
Tai Stillwater, University of California, Davis
Patricia L. Mokhtarian, University of California, Davis
Susan A. Shaheen, University of California, Berkeley

User Characteristics and Responses to Shared-Use Station Car Program: Analysis of ZEVïNET in Orange County, California (09-3260)
Matt Heling, University of California, Irvine
Jean-Daniel Maurice Saphores, University of California, Irvine
G. Scott Samuelsen, University of California, Irvine

Carsharing in a University Community: Assessing Potential Demand and Distinct Market Characteristics (09-3396)
Jie Zheng, University of Wisconsin, Madison
Michelle Scott, University of Wisconsin-Madison
Jessica Y. Guo, University of Wisconsin, Madison
Miguel Angel Rodriguez, University of Wisconsin, Madison
William Sierzchula, University of Wisconsin-Madison
David Platz, University of Wisconsin-Madison
Teresa Adams, University of Wisconsin, Madison

North American Carsharing: Ten-Year Retrospective (09-3688)
Susan A. Shaheen, University of California, Berkeley
Adam Cohen, University of California, Berkeley
Melissa Chung, University of California, Berkeley

Finally, one of the papers to be presented at a climate change session will include a discussion of carsharing

Session 795 Behavioral Considerations in Response to Energy Prices and Global Climate Change
Thursday, January 15, 2009, 10:15 AM - 12:00 PM, Hilton

Psychological Analysis of Acceptance of Pro-environmental Use of the Automobile: Cases for Carsharing and Eco-car (09-3689)
Hiroyuki Ohta, Tokyo Institute of Technology, Japan
Satoshi Fujii, Tokyo Institute of Technology, Japan
Yoshihiro Nishimura, Toyota Central R&D Labs., Inc.
Misuzu Kozuka, Toyota Central R&D Labs., Inc.

Again, General information about TRB and the annual meeting can be found at the TRB website. I look forward to meeting you at TRB.