Magazine for the professional car and truck rental industry.
Issue link: https://autorentalnews.epubxp.com/i/90712
PR O F IL E AN INDIE CAR SHARING OPERATION GROWS IN BROOKLYN While the car sharing market is moving toward control by national corporations, Gil Cygler, founder of Carpingo, believes there's a place for an independent. BY BRITTNI RUBIN A ALLCAR RENT-A-CAR LAUNCHED THE HOURLY CAR SHARING COMPANY Carpingo in Brooklyn, N.Y. in mid-August of this year. Cur- rently, the service has 38 vehicles including models such as the Chevrolet Malibu, Fiat 500 and Toyota Rav4, according to Gil Cygler, founder of Carpingo and president of AllCar. As of late September, Cygler and his team have built the service up to a modest base of 100 members. "There's defi nite- ly a need for a smaller, neighborhood car sharing program that customers might want to turn to if the big name programs are all out of cars or too expensive," Cygler says. "We could appeal to [renters'] loyalty to a local company." While operating a traditional car rental company for more than 30 years gave Cygler a leg up in the car sharing world, he found that opening Carpingo came with a set of challenges unique to car sharing. SECURING PARKING Securing adequate parking spots in New York City was one of those challenges. All of Carpingo's vehicles are parked on private lots, which Cygler says can be fairly costly compared to other cities. He says that while a traditional car rental lot might rent for $3,000-$4,000 a month, he's paying $200-$400 per spot for his Carpingo cars. And in some areas, Zipcar, the dominant car sharing company in New York and largest in the country, had already negotiated exclusive parking arrangements. With cars spread throughout 12 Brooklyn neighborhoods, Cygler has had to tactically choose his parking locations. "We're constantly on the lookout for spots and fi guring out where customers want us to be," he says. Among Carpingo's criteria are well-lit and well-populated areas with good public transportation — a strategy aimed at allowing customers to easily get to and from the car. But with those 12 locations come as many as 12 different landlords each with a separate bill, insurance certifi cate and security deposit. INSTALLING TECHNOLOGY Each Carpingo vehicle is installed with hardware that connects to the reservations and operations system, which tracks the vehicle, calculates time and mileage, and locks/unlocks the car. While the device may appear similar to a GPS tracking unit, the installation, maintenance and costs are much greater. For example, AllCar's traditional GPS tracking units cost about 20 November/December 2012 AUTO RENTAL NEWS CAR SHARING NUMBERS X 1.2 million car sharing members worldwide in 2010 X 31,665 vehicles in car sharing fl eets worldwide in 2010 X 755,000+ car sharing members in the U.S. so far in 2012 X 11,500+ vehicles in car sharing fl eets in the U.S. so far in 2012 X 25 car sharing companies operating in the U.S. as of January 2012 SOURCE: TRANSPORTATION SUSTAINABILITY RESEARCH CENTER, UNIVERSITY OF CALIFORNIA, BERKELEY $160 each and took about 20 minutes to install. But the car sharing device, by Metavera Solutions, costs about $1,200 per unit and takes three to four hours to install. In addition, each car model has slightly different wiring and confi gurations. Cygler says that synchronizing the cars and the units proved to be a challenge, and some cars did not initially re- spond to the transponders. "Getting the units installed is a com- plicated process — more complicated than expected," he says. CONTROLLING RATES AND COSTS Carpingo rates run from $4.50 to $14 per hour, which is about 15-20% lower than Zipcar's, according to Cygler. The member- ship fee is waived for a limited time. "We need to be highly competitive as the new guy on the block and the smallest guy on the block," says Cygler, who be- lieves the lower rates will remain sustainable so long as there's a high enough customer volume. Cygler fi gures each vehicle needs to generate at least $1,500 in revenue per month to be comfortably profi table. That may seem high in light of a business model in which all transac- tions are performed online and, as Cygler points out, won't be augmented by the traditional ancillary opportunities such as additional insurance, navigation or other upsells. He also brings up the unique costs to a car sharing service: maintaining a distributed fl eet. To service the cars, each must be picked up and brought in. Because locations are both outdoor and indoor, and multi-level or underground, cleaning regulations vary by location and might necessitate purchasing a waterless cleaning system, for instance. Costs are also incurred as a 24-hour business. Similar to tra- ditional car rental, the car sharing company must worry about after-hours roadside service and issues involving overbookings,