Reporting on pedestrian life in the D.C. area

Meet Car2Go and Hertz On Demand, D.C.'s new car-sharing competitors

February 3, 2012 - 09:52 AM
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Welcome the new car-sharing competition. (Photo: Courtesy of Daimler)

The D.C. car-sharing monopoly is officially over. In 2012, both Daimler's Car2Go and the Hertz On Demand models of car-sharing have quietly established their groundwork for entering our city's streets and parking spaces. Little fanfare trumpets their arrival yet but I expect we'll see more flair from the two companies soon. They stand in stark contrast to the world's car-sharing king Zipcar, which touts more than 60,000 members in Washington, D.C. Hertz On Demand is officially launching its services this week, as Hertz spokeswoman Paula Rivera confirmed by phone, and Car2Go is finalizing operational agreements with the D.C. government as we speak.

Zipcar should watch out because these two new companies enter D.C. with distinct new features and attractive pricing that may begin to chip away at Zipcar dominance. First let's compare rates:

Zipcar's Occasional Driving Plan: Annual fee of $60, $25 application; Hourly rate: $7.75 to $15.25; Daily rate: $73 to $110.

Hertz On Demand (D.C. rates): No annual membership fee, no application fee; Hourly rate: $8; Daily rate: $76.

Daimler Car2Go (based on rates in other U.S. cities, not final for D.C.): No annual membership fee, $35 application; Minute rate: $0.35; Hourly rate: $12.99; Daily rate: $65.99.

Car2Go offers the more detailed Washington, D.C. website and has created a Twitter account, although Car2Go's communications manager Katie Stafford tells me these are "just being tested" until Daimler finalizes details with D.C. and formally launches later this year. Hertz On Demand now lists D.C. among its cities and features an interactive map that lists the location of several On Demand vehicles around the District.

Chocolate strawberries
Hertz On Demand. (Photo: Wikimedia Commons)

These companies are poised to make quite a splash in the next few months and may well launch special deals and incentives to steal away some of the Zipster crowd. The D.C. metro region has close to 200,000 households that own no personal automobiles, and according to D.C.'s Office of Planning, a car costs more than $8,000 a year in all its expenses, two statistics that suggest great car-sharing opportunity.

Car2Go and Hertz On Demand will feature a healthy share of parking spots in the District, many of them expensive public spaces acquired in a contentious bidding war against Zipcar last year. Hertz On Demand is offering members 80 parking spaces at launch, with 23 on-street parking spots. Car2Go has a map that outlines 28 "dedicated parking locations" throughout the city, concentrated particularly in Northwest, although Stafford notes they're not final. These spaces will hardly come close to matching Zipcar's 850 to 900-car fleet spread throughout D.C. but neither company needs to beat Zipcar outright. They simple need an edge with which to break into the market.

Luckily these competitors have multiple attractive advantages. The lack of membership fees will draw in some who may balk at Zipcar's initial charges. Both companies also emphasize electric vehicles more than Zipcar, and Hertz On Demand has integrated its Union Station electric-vehicle charging locations with its new car-share program. You can take Hertz's all-electric and plug-in hybrid cars for a spin starting from there. Car2Go has also promoted electric vehicles rather notably, creating America's first all-electric car-sharing network in San Diego late last year. The Hertz car-sharing fleet includes Nissan Altima, Mercedes C300, Mitsubishi Endeavor, Cadillac CTS, Fiat 500, Chevy Cruze, Chevy Malibu, Mazda 2, Mazda 3, Jeep Patriot, the Fortwo, and the Nissan Leaf. The blue and white vehicles of Car2Go will be the "coolest cars on the road," the Car2Go site announces, "the innovative Smart Fortwo. At 41 miles-per-gallon hwy, they are the most fuel-efficient non-hybrid vehicles" in America. Hertz On Demand has already alluded to plans for expansion to suburbs of Virginia and Maryland and Hertz CEO and chairman Mark Frissora doesn't hesitate to note in a statement about D.C. that the service's member benefits "far exceed those of our competitors."

"As of today, we have approximately 20 cars in the fleet and we're continuing to add vehicles," said Hertz spokeswoman Paula Rivera. The company hopes to build the fleet about to 100 vehicles in the course of its first phase. Rivera said they're also "looking to add EVs at other locations" besides Union Station as our city's charging infrastructure expands.

Hertz On Demand offers what I personally view as the biggest edge over either Car2Go and Zipcar by allowing one-way trips to 175 locations throughout the U.S. Northeast. Rivera told me that Hertz On Demand won't be offering one-way service in D.C. just yet but will be studying the market and may well do so as it builds its fleet. I imagine great demand for such one-way car-sharing travel to nearby locations, such as Baltimore (where the MARC train doesn't run on weekends). Traditional car-sharing services require drivers to take round trips and return vehicles to the spaces they picked them up. The round-trip is more convenient for the car-sharing company and also builds loyalty as users come to expect the same vehicles in the same locations. Zipcar requires round trips, and Smart2Go's D.C. terms specify that traveling "outside a 200 mile radius of the Business Area is prohibited" (although Car2Go does offer more flexibility about where to leave its vehicles within the city's operating area). In that round-trip model, a person can't take a car-sharing vehicle to other cities like Baltimore, Philadelphia, or even just the airport and leave that vehicle there — a major car-sharing downside that Hertz On Demand has managed to defy nationally thanks to the robustness and omnipresence of its traditional rental fleet.

But Zipcar's general manager in D.C. questioned the environmental wisdom of the practice. "With the one-way car-sharing model, it's not really proven," Ellice Perez told me. "Eventually that car is going to have to returned." Zipcar's model, she emphasized, is proven and is shown to reduce the vehicle miles traveled.

Car2Go wins the branding war and may be on par with Zipcar in terms of distinction. Car2Go vehicles are cute. They're blue and white. They're only 8.8 feet long. The site and presence of a Twitter account already suggests the bubbly personality and voice that create distinct and fun brands committed to reliable transportation and the environment (Sample line: "Blue plus white equals green"). Car2Go stresses easy urban mobility and quick trips, with no need for advance reservations and a "free-flowing" element to the system, as Car2Go's communications manager explained, with fleet teams monitoring where the different vehicles are in the city. Where else can you find a car-sharing model that charges by the minute?

"We are a little bit different than these traditional car-sharing companies," Stafford said. "The point-to-point aspect is really important to our model. You'd be able to pick a car up in Dupont Circle and drop it off in Georgetown."

We may be a Zipcar town but both of these new competitors carry global heft not to be casually dismissed. Hertz On Demand has acquired about 120,000 members since its start in December 2008, and Car2Go, also founded in 2008, hopes to establish itself in more than 50 cities in the coming years. Then again, Zipcar will soon mark a dozen years in D.C. and claims more than 60,000 Zipsters locally and more than 650,000 worldwide. Perez doesn't worry about the competition and told me Zipcar welcomes the presence of Car2Go and Hertz On Demand.

"These additional companies raise more awareness for car-sharing," Perez said. "We've built our brand on the back of our mission. We continue to grow. We always see our main competitor as car ownership."

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