ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
BUSINESS MODEL INNOVATION IN RENT-A-CAR
COMPANIES INTRODUCING CARSHARING IN
THEIR PORTFOLIOS
Autor: Pablo González-Iglesias Baeza
Director: Ludmila Striukova
Madrid
Mayo 2015
Proyecto realizado por el alumno/a:
Pablo González-Iglesias Baeza
Fdo.:
Fecha:
Autorizada la entrega del proyecto cuya información no es de carácter
confidencial
EL DIRECTOR DEL PROYECTO
Ludmila Striukova
Fdo.:
Fecha:
Vº Bº del Coordinador de Proyectos
Susana Ortiz Marcos
Fdo.:
Fecha:
EL CARSHARING COMO INNOVACION EN EL MODELO DE
NEGOCIO DE EMPRESAS DE ALQUILER TRADICIONAL
Autor: González-Iglesias Baeza, Pablo
Director: Dr Mila Striukova
Entidad colaboradora: ICAI-Universidad Pontificia de Comillas
RESUMEN DEL PROYECTO
Introducción:
El carsharing está creciendo en el mercado de alquiler de vehículos añadiendo valor a las
compañías de alquiler tradicional (Rent-A-Car, a partir de ahora “RAC”). Está penetrando
en el mercado como un servicio innovador para clientes con nuevas necesidades,
ofreciendo así una nueva solución de movilidad. Por otro lado, el RAC tradicional está
cambiando, adaptándose a las nuevas necesidades de los clientes. Las empresas de RAC
crecieron cuando el consumidor necesitaba una nueva manera de usar un vehículo sin
tener que comprarlo, estableciendo así un mercado con pocas compañías dominantes: Las
elevadas barreras de entrada, así como la ventaja de llegar primero ha creado una industria
como tal. No obstante, desde que los avances tecnológicos han ido cambiando el mundo
(internet, redes de comunicación, smartphones…), se ha producido un cambio ofreciendo
nuevas oportunidades de crecimiento a nuevas compañías en una industria tan complicada
de acceder. Por ejemplo, el carsharing está cambiando la manera en la que los vehículos
se alquilaban y se usaban. Es por ello que las empresas de RAC dominantes están
innovando y adaptándose a las nuevas tendencias y también para no perder participación
en el mercado y/o no quedar obsoletas.
A lo largo de este proyecto, se analizarán las empresas de RAC principales en Europa y
Estados Unidos basándose en un tipo de modelo de negocio, el modelo de Canvas, para
poder así entender cómo se están adaptando e integrando sus modelos de negocio para
soportar las nuevas plataformas de carsharing. Así, se analizará:
En EEUU:






Avis Budget
Sixt
Europcar
Hertz Holding (Hertz)
Enterprise Rent-a-Car (Enterprise)
U-Haul
En Europa:





Avis Budget
Sixt
Europcar
Hertz
Enterprise
El modelo Canvas se puede usar para identificar los factores clave o innovadores en una
empresa. Considerando los nueve componentes que define el modelo de Canvas, la
propuesta de valor que el carsharing introduce representa un nuevo valor añadido en las
compañías de RAC. Esta propuesta de valor se resume en un nuevo servicio de alquiler
de vehículos enfocado a clientes que buscan pagar sólo por el uso que se hace del mismo
y un servicio más personalizado a las necesidades de cada cliente. Por ello, se hará un
análisis específico en la propuesta de valor de cada compañía de RAC y su empresa de
carsharing. Este proyecto también servirá para entender si deben innovar los modelos de
negocio de manera más dinámica con el crecimiento de nuevos competidores.
Metodología:
Este proyecto se ha divido en varias partes:
 Se iniciará el proyecto definiendo el modelo de negocio para poder así entender
el objeto del mismo. Se recogerán varias definiciones de autores para poder llegar
a un entendimiento generalizado del modelo de negocio.
 El modelo de negocio Canvas se usará para analizar cambios innovadores en las
distintas compañías de RAC con respecto a sus negocios de carsharing (en EEUU
y Europa).
o
o
o
o
o
o
Avis Budget vs Zipcar
Sixt vs DriveNow
Europcar vs Car2go
Hertz vs Hertz 24/7
U-Haul vs UHaul CarShare
Enterprise vs Enterprise CarShare
 A continuación, se hará un análisis de costes en función de la hora y precio del
carsharing para poder entender en qué situación una empresa de carsharing es más
económica que otra o si existe un patrón de precios de carsharing entre las
empresas.
 Finalmente, se analizará cuáles son las amenazas del carsharing con respecto al
alquilar tradicional, así como las nuevas tendencias del mercado, mirando a las
Smart Cities como un nuevo mercado potencial innovador.
Resultados:
Analizando el modelo Canvas de las empresas de RAC y sus empresas de carsharing, los
resultados obtenidos fueron:
 Avis Budget vs Zipcar
o Avis: Avis First – cuanto más uses los coches de Avis, más descuentos te
llevas. Gama muy variada de vehículos en la mayoría de sus parkings. Avis
Preffered – evita todo el papeleo en los aeropuertos al hacerte socio.
o Zipcar: "Ruedas cuando las necesitas”. Usa sus vehículos con la misma
tarjeta de socio por todo el mundo. Trato personalizado (regalos,
descuentos) - one way aeropuerto o round trip.
o Sinergia:
Avis Budget & Zipcar: Sinergias Uso
Flota
% Uso Flota
100%
0%
Monday
Lunes
Tuesday
Martes
Wednesday
MiércolesThursday
Jueves
Avis Budget
Friday
ViernesSaturday
Sábado Sunday
Domingo
Zipcar
 Sixt vs DriveNow
o Sixt: El valor añadido de marca alemana (según encuestas), flota de alta
gama (60% flota) y myDriver (choffer).
o DriveNow: Flota de BMW serie 1 y la ventaja de cogerlo y dejarlo en
cualquier punto (no hay que devolverlo en el mismo sitio de recogida).
Uso por minutos (no hay mínimo de una hora de uso).
o Sinergia: Permite un servicio de 360º: DriveNow + SixtRentaCar +
SixtLeasing.
 Europcar vs Car2go
o Europcar: La mayor flota de vehículos permite preciso más baratos que la
competencia. Variedad de servicios: AutoLiberté, ToMyDoor (lleva en
coche a tu casa).
o Car2go: Flota de coches smart carsharing one-way. No hay costes por ser
miembro. Precio por uso y nada más. Si rellenas el depósito sin que sea
obligatorio, te regalan horas.
o Sinergia: "Nosotros en Europcar estamos convencidos de que este
lanzamiento marca el comienzo de una nueva era en movilidad urbana:
una era de movilidad en tiempo real” Philippe Guillemot, Consejero
Delegado de Europcar.
 Hertz vs Hertz 24/7
o Hertz: Gold Plus Rewards (mejora agilidad recogida y devolución
vehículos) – no tiene costes ser miembro. Adrenaline Collection: gama de
coches deportivos específicos. Green Traveler Collection. HERC (Hertz
Equipment Rental Collection – ventajas para clientes de empresas de
Hertz).
o Hertz 24/7: Darse de alta es gratis y no hay costes mensuales por ser
miembro. One-way + round-trip, según la necesidad del cliente.
o Sinergia: Su objetivo es combinar la tecnología de Hertz 24/7 para todos
los consumidores, de carsharing o de RAC.
 U-Haul vs UHaul CarShare.
o U-Haul: Especializados en productos y servicios para mudarse. Camiones
con productos asociados (U-Box – alquiler de trasteros). Clientes “hazlo
tú mismo” valoran mucho este servicio.
o UHaul CarShare: Precios muy bajos para usos muy cortos (precios
dinámicos). Únicos con precios dinámicos para clientes con usos
específicos.
o Sinergia: Su servicio de carsharing es una extensión natural de sus valores
como compañía.
 Enterprise vs Enterprise CarShare
o Enterprise: La mayor flota RAC del mundo. Tiene, según encuestas, el
mejor servicio de atención al cliente. Servicios para distintas necesidades:
Rideshare y Zimride.
o Enterprise CarShare: Ofrece la posibilidad de darte de alta para sin tener
que ser socio o puedes darte de alta como socio (precios a la larga más
baratos ya que ofrecen descuentos).
o Sinergia: Su modelo económico se basa en la proximidad geográfica de
sus clientes. Carsharing es la continuación de su modelo de negocio.
Una vez realizado el análisis de costes, los resultados fueron (en el proyecto se analizan
más casos - se muestra el caso de un uso de 4 horas ya que es el uso medio de horas de
carsharing):
4 HORAS DE USO – Europa
Comparativa Costes - 4 horas de uso
Precio
150 €
100 €
50 €
0 €
0
5
10
15
ZIPCAR
20
25
30
Distancia (km)
DRIVE NOW
60
100 150 200
HERTZ 24/7
CAR2GO
4 HORAS DE USO – US
Comparativa Costes - 4 horas de uso
Precio
200 $
100 $
0 $
0
5
10 15 20 25 30 60 100 150 200 400
Distancia (km)
ZIPCAR
DRIVE NOW
Enterpirse CarShare
HERTZ 24/7
CAR2GO
UHaulCarshare
Conclusiones:
Una vez recogidas varias definiciones de autores sobre los modelos de negocio, se
demuestra que no existe una definición exacta de lo que es. No obstante, el modelo
Canvas es una manera de definirlo y se ha usado para analizar cómo las mayores empresas
de RAC están innovando en su modelo de negocio introduciendo el carsharing.
Muchas veces la innovación en los modelos de negocio tiene mayor valor que la propia
innovación tecnológica o de producto, siempre y cuando se haya implementado
correctamente. Considerando el modelo de Canvas, muchos componentes han cambiado
cuando se introducía el carsharing. La idea detrás del carsharing es el alquiler, pero la
manera en la que se ofrece y usa el servicio es completamente diferente a la del alquiler
tradicional.
Una vez analizado y obtenido los resultados de los modelos de negocio de las mayores
empresas RAC se puede decir que:
 Existe un consenso general sobre el carsharing siendo un componente
fundamental en el futuro de las empresas de RAC, añadiendo valor a sus variados
servicios.
 Existen muchos Consejeros Delegados de la industria que están de acuerdo con
que el carsharing y su tecnología guiarán la movilidad del futuro.
 Para poder competir contra el tamaño y la experiencia de Zipcar, adquirir o
fusionarse con empresas existentes de carsharing puede ayudar a crecer de manera
más rápida a las empresas de RAC. Esto representa una oportunidad para bancos
de inversión y para start-ups de carsharing que estén buscando una salida de
negocio.
 El modelo de negocio del carsharing gira sobre la captación y retención del cliente.
Para poder sobrevivir, las empresas de carsharing deben crear una comunidad de
miembros que use y pague por el servicio de manera recurrente. Esto representa
un cambio en el tipo de servicio que tendrán que entender las compañías de RAC
para poder tener éxito en el futuro.
Una vez realizado el análisis de costes (precio de carsharing), se puede decir que:
 Carsharing de punto a punto (lo que ofrece DriveNow y Car2go) es, en la
actualidad, sólo económicamente competitivo para tiempos menores a una hora.
 Para mayores periodos de tiempo (> 1 hora), carsharing de vuelta entera es la
alternativa ideal, sobre todo con el uso de Zipcar (por precio y puntos de recogida
de vehículos). También, por el coste y tiempo medio de uso, el carsharing de
vuelta es la mejor alternativa el coche privado y un complemento más al transporte
público, taxi o bicicleta en las ciudades.
 El carsharing no es una amenaza al alquiler tradicional, sino un servicio
complementario que cierra la variedad de servicios de movilidad, añadiendo valor
a los servicios que ofrecen las empresas de RAC.
El carsharing requiere nuevas estrategias, una mentalidad dinámica y una capacidad para
ser abierto en la innovación. Tradicionalmente, las empresas de RAC nunca han sido muy
dinámicas, con lo cual el carsharing será un reto muy interesante al que se tendrán de
adaptar.
Finalmente, considerando el futuro de la movilidad y las nuevas tendencias en el mercado,
se puede decir que:
 Con la introducción de nuevas tecnologías el oligopolio de las principales
empresas de RAC puede estar en entre dicho si no innovan.
 Modelos de negocio dinámicos dominarán el futuro del alquiler de vehículos.
Se espera que el carsharing crezca durante los próximos años de manera exponencial y
con ello nuevas tecnologías y productos que afectarán al servicio prestado. Será necesario
un cambio hacia modelos de negocio dinámicos en empresas de alquiler tradicional.
BUSINESS MODEL INNOVATION IN RENT-A-CAR COMPANIES
INTRODUCING CARSHARING IN THEIR PORTFOLIOS
PROJECT SUMMARY
Introduction:
Carsharing is aggregating value in Rent-A-Car (RAC) firms, offering innovative services
to customers with different needs. Traditional renting is starting to change covering new
consumer needs. Rent-A-Car (RAC) companies stemmed from new customer needs,
creating an industry with a few dominant players. High barriers to entry, as well as first
mover advantage had created an industry dominated by few big players. However, since
technological advances have been changing the world (e.g. Internet, network
communications, smartphones…), there has been a shift in new opportunities, making it
possible for other players to grow in this market. For instance, carsharing is starting to
change the way vehicles are being rented and used. Nonetheless, the main RAC players
are innovating and adapting to these present trends in order to maintain market share.
Throughout this research the biggest RAC companies in Europe and United States will
be analysed using a business model framework, the business model canvas, to understand
how they are adapting and integrating their business models to underpin carsharing
schemes.
In the US:
In Europe:










Avis Budget
Sixt
Europcar
Hertz Holding (Hertz)
Enterprise Rent-a-Car
(Enterprise)
 U-Haul
Avis Budget
Sixt
Europcar
Hertz
Enterprise
The Business Model Canvas can be used to identify key drivers of difference or
innovation within an organization. Considering the nine components that define the
business model canvas, the value proposed that carsharing introduces (pay only when you
need the vehicle) is the epicentre from where business model innovation of the main RAC
companies stems from. For this reason, a specific focus on value proposition will be made
within each company’s rental schemes. This research will also help understand how and
if main players in the RAC industry need to innovate their business models faster each
time with an increasing threat of manifold technologies and new players.
Methodology:
This study has been divided is several parts:
 A general understating of what a business model is will help clarify the scope of
this research. A review of the literature will support several author’s
understandings concerning business models.
 The business model canvas will be used to analyse innovative changes in different
RAC companies vs their carsharing schemes. A focus on value proposition and
the synergy effect of combining both services in each case will be made.
o
o
o
o
o
o
Avis Budget vs Zipcar
Sixt vs DriveNow
Europcar vs Car2go
Hertz vs Hertz 24/7
U-Haul vs UHaul CarShare.
Enterprise vs Enterprise CarShare
 Then, analytical approaches concerning prices and distance in carsharing will help
understand in which cases one system of carsharing is more affordable than the
others or if there is a similar pricing strategy among different players.
 Finally, how big of a threat carsharing is to RAC businesses, as well as future
trends in the industry, looking at smart cities as the next potential innovative
approach will be reviewed.
Results:
Analysing the business model canvas of both the RAC companies and their carsharing
schemes, the results were:
 Avis Budget vs Zipcar
o Avis: Avis First – the more you use their fleet, the more discounts you get.
Many different types of vehicles in each parking. Avis Preffered – forget
about airport paperwork.
o Zipcar: "Wheels when you want them". Use the same member car
anywhere in the world. Personalized service (presents, discounts). One
way to airport or round trip.
o Synergy:
Avis Budget & Zipcar Fleet Utilization
Synergy
Fleet Utilization
100%
0%
Monday
Tuesday Wednesday Thursday
Friday
Avis Budget
Saturday
Sunday
 Sixt vs DriveNow
o Sixt: The brand (German), 60% high end vehcile fleet, and use of MyDrive
(choffer).
o DriveNow: BMW series 1 fleet. One way carsharing, use per minute.
o Synergy: Offers a 360º Solution: DriveNow + Sixt RentaCar +
SixtLeasing.
 Europcar vs Car2go
o Europcar: Biggest fleet in Europe allows to have very competitive prices.
Different services: AutoLiberté, ToMyDoor (car to your house).
o Car2go: One way carsharing using smarts. No costs for being a member
and if you fill up the car’s tank, get hours for free.
o Synergy: "We at Europcar are convinced that this launch marks the
beginning of a new era in urban mobility: an era of car mobility on
demand” Europcar CEO Philippe Guillemot.
 Hertz vs Hertz 24/7
o Hertz: Gold Plus Rewards (faster pick-up and leaving vehicles).
Adrenaline Collection (special sports car). Green Traveler Collection.
HERC.
o Hertz 24/7: Carsharing technology to many cars (future plan is to integrate
them all) and as of 2013, they had about 35,000 vehicles around the globe.
o Synergy: Hertz’s objective is to combine their 24/7 technology service to
all types of consumers, carsharing or traditional rental car consumers.
 U-Haul vs UHaul CarShare.
o U-Haul: Specialized in Do-It-Yourself products and services. Trucks to
move from one house to another. U-box (storage spaces) – discounts for
members.
o UHaul CarShare: Dynamic prices (very cheap for short uses).
o Synergy: The carsharing scheme is a natural extension of the company’s
core values.
 Enterprise vs Enterprise CarShare
o Enterprise: Biggest RAC fleet in the world. Best customer service. Other
different services: Rideshare and Zimride.
o Enterprise CarShare: Sign-up as a member or as a one use way (not have
to become a member).
o Synergy: The Company’s economic model is based on their geographic
proximity to their clients. Carsharing is the natural extension of their
services.
From the cost analysis the results were (there are more cases analysed in the research. 4
hour use is the average usage time):
4 HOUR USE – Europe
Cost Comparison - 4 hour use
Price
150 €
100 €
50 €
0 €
0
5
ZIPCAR
10
15
20 25 30 60 100 150 200
Distance (km)
HERTZ 24/7
DRIVE NOW
Prices 4 hour use Europe Carsharing
CAR2GO
Source: Company Website
4 HOUR USE – US
Cost Comparison - 4 hour use
Price
150 $
100 $
50 $
0 $
0
5
10
15
20
25 30 60
Distance (km)
100 150 200 400
ZIPCAR
HERTZ 24/7
DRIVE NOW
CAR2GO
Enterpirse CarShare
UHaulCarshare
Prices 4 hour use US Carsharing
Source: Company Website
Conclusions:
The review of the literature demonstrates how there is not a general definition on what a
business model is. Nonetheless, the business model canvas is one way to define a
complete business model and was used to review how the main RAC companies are
innovating their models through the growth of carsharing schemes.
Business model innovation is thought to be more powerful than technological or product
innovation, if well implemented. Considering the business model canvas, many different
components changed when introducing carsharing. The idea behind carsharing is renting,
but the way it is delivered and used is completely different than traditional renting
services.
After analysing the main Rent-A-Car player’s business models it can be said that:
 There is a general agreement on carsharing being a fundamental future component
in RAC company’s businesses, aggregating value to their different services.
 Many company CEOs in this industry agree that carsharing and its technology
will shape the mobility services of the future.
 In order to compete against Zipcar’s size and experience, other RAC companies
may consider a fast method of growth: acquiring carsharing companies. Merges
and acquisitions may speed up competitive positioning, making this industry
interesting for investment banks to consider in the present time and for carsharing
start-ups to find a route of exit.
 A crucial aspect in a carsharing business models is the customer base attracted
and retained by the companies. Pure rental companies don’t thrive on a
community based platforms, as opposed to carsharing companies. The shift
toward having a greater client focused service than before, will be a fundamental
change to develop in order for big players to succeed.
From the pricing study (carsharing usage prices) it can be said that:
 Point-to-point carsharing is, at the moment, only best for very short times of use
(<1 hour). Therefore, it should be thought as an alternative to a taxi and less to
that of a personal vehicle.
 For longer uses of vehicles (more than one hour), round trip carsharing is ideal
and Zipcar offers the best solution for it in price and location in general terms (in
some cases some services were cheaper). Furthermore, due to cost and time usage,
round trip carsharing is the best alternative to the private vehicle and a
complementary service to that of public transportation, taxi, or bicycles in cities.
 Carsharing isn’t a threat to RAC companies, but a complementary service that
closes the gap of mobility solutions. This service is aggregating value to renting
companies, which also have to be careful for future perspectives and trends in
order to continue leading the RAC market.
Carsharing requires new strategies, dynamic mind-sets, and capacity for being open in
innovation. Traditionally, rental companies have never been very dynamic, therefore,
carsharing will be an interesting challenge.
Finally, considering the future of mobility and new trends it can be said that:
 Rental companies don’t want to stay behind in trends of mobility, but with the
introduction of new technologies their oligopoly can be jepordised if they don’t
react fast enough to new shifts in the market.
 Dynamic business models will dominate future renting service.
Carsharing is expected to grow during the next years at exponential rates and with it other
new types of technological services and products. A shift toward dynamic business
models in rental industries will be necessary to keep on surviving in such a competitive
industry.
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
Table of Contents
Chapter 1. Literature Review .......................................................... 5
1.1 Introduction ................................................................................................5
1.2 Business Model...........................................................................................6
1.3 Business Model Innovation .........................................................................9
1.4 Business Model Framework – Business Model Canvas ............................. 11
Chapter 2. Industry and Competitors ........................................... 15
2.1 Rent-A-Car (RAC) .................................................................................... 15
2.2 Carsharing ................................................................................................ 16
2.3 Main Players in the US ............................................................................. 21
2.3.1 RAC Players ................................................................................................. 21
2.3.2 Carsharing Players ........................................................................................ 22
2.4 Main Players in Europe ............................................................................. 23
2.4.1 RAC Players ................................................................................................. 23
2.4.2 Carsharing Players ........................................................................................ 24
Chapter 3. Case Studies: Main Players ......................................... 27
3.1 Avis Budget Group: Avis Budget & Zipcar ............................................... 27
3.1.1 Avis Budget US ............................................................................................ 27
3.1.2 Zipcar US ..................................................................................................... 28
3.1.3 Avis Budget Europe (Avis Europe ltd.) ......................................................... 29
3.1.4 Zipcar Europe ............................................................................................... 29
3.1.5 Avis Budget Business Model Canvas ............................................................ 29
3.1.6 Zipcar Business Model Canvas ..................................................................... 31
3.1.7 Value Proposition: Avis Budget & Zipcar ..................................................... 32
3.1.8 Synergies: Avis Budget & Zipcar .................................................................. 35
3.2 Sixt SE: Sixt & DriveNow ........................................................................ 37
3.2.1 Sixt US ......................................................................................................... 37
3.2.2 DriveNow US ............................................................................................... 37
3.2.3 Sixt Europe ................................................................................................... 37
3.2.4 DriveNow Europe ......................................................................................... 38
3.2.5 Sixt SE Business Model Canvas .................................................................... 39
________________________________________________________________________
-2-
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
3.2.6 DriveNow Business Model Canvas ............................................................... 41
3.2.7 Value Proposition: Sixt & DriveNow ............................................................ 42
3.2.8 Synergies: Sixt & DriveNow ......................................................................... 43
3.3 Europcar Group: Europcar & Car2go ........................................................ 45
3.3.1 Europcar US ................................................................................................. 45
3.3.2 Car2go US .................................................................................................... 46
3.3.3 Europcar Europe ........................................................................................... 46
3.3.4 Car2go Europe .............................................................................................. 47
3.3.5 Europcar Business Model Canvas ................................................................. 48
3.3.6 Car2go Business Model Canvas .................................................................... 50
3.3.7 Value Proposition: Europcar & Car2go ......................................................... 51
3.3.8 Synergies: Europcar & Car2go ...................................................................... 52
3.4 Hertz Global Holdings: Hertz & Hertz 24/7 .............................................. 54
3.4.1 Hertz US ....................................................................................................... 54
3.4.2 Hertz 24/7 US ............................................................................................... 55
3.4.3 Hertz Europe ................................................................................................ 55
3.4.4 Hertz 24/7 Europe ......................................................................................... 56
3.4.5 Business Model Canvas Hertz ....................................................................... 56
3.4.6 Business Model Canvas Hertz 24/7 ............................................................... 58
3.4.7 Value Proposition Hertz and Hertz 24/7 ........................................................ 59
3.4.8 Synergies: Hertz & Hertz 24/7 ...................................................................... 61
3.5 U-Haul Group: U-Haul & UHaul CarShare ............................................... 62
3.5.1 U-Haul US .................................................................................................... 62
3.5.2 UHaul CarShare US ...................................................................................... 62
3.5.3 U-Haul Business Model Canvas .................................................................... 63
3.5.4 UHaul CarShare Business Model Canvas ...................................................... 65
3.5.6 Synergies: U-Haul and UHaul CarShare........................................................ 67
3.6 Enterprise Holdings: Enterprise and Enterprise CarShare .......................... 69
3.6.1 Enterprise US ............................................................................................... 69
3.6.2 Enterprise CarShare US ................................................................................ 69
3.6.3 Enterprise Europe ......................................................................................... 70
3.6.4 Enterprise CarShare Europe .......................................................................... 70
3.6.5 Enterprise Business Model Canvas ................................................................ 71
3.6.6 Enterprise CarShare Business Model Canvas ................................................ 73
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3.6.7 Value Proposition: Enterprise & Enterprise CarShare .................................... 74
3.6.8 Synergies: Enterprise & Enterprise CarShare ................................................ 75
3.7 Main Players – Quantitative Comparison .................................................. 76
3.7.1 RAC Companies ........................................................................................... 76
3.7.2 Carsharing Companies .................................................................................. 77
Chapter 4. Pricing Analysis: Carsharing Schemes ....................... 79
4.1 Cost Analysis Carsharing Schemes with Different Players ........................ 79
4.2 Price Analysis Europe ............................................................................... 80
4.2.1 Case 1: 1 HOUR USE – Europe .................................................................... 81
4.2.2 Case 2: 4 HOUR USE – Europe .................................................................... 82
4.2.3 Case 3: 10 HOUR USE – Europe .................................................................. 82
4.3 Price Analysis US ..................................................................................... 84
4.3.1 Case 1: 1 HOUR USE – US .......................................................................... 85
4.3.2 Case 2: 4 HOUR USE – US .......................................................................... 86
4.3.3 Case 3: 10 HOUR USE – US ........................................................................ 87
Chapter 5. Threats and Opportunities: RAC vs Carsharing ....... 89
5.1 Is Carsharing a Threat To Rent-A-Car Industry? ....................................... 89
Chapter 6. Future of Mobility: Perspectives and Trends ............. 93
6.1 Future Perspectives Carsharing Market ..................................................... 93
6.2 Future Trends ............................................................................................ 94
6.2.1 Electric Vehicle ............................................................................................ 95
6.2.2 Multimodality ............................................................................................... 95
6.2.3 Autonomous Cars ......................................................................................... 96
6.2.4 Big Data ....................................................................................................... 97
6.3 Smart Cities .............................................................................................. 98
Chapter 7. Conclusion .................................................................. 101
7.1 Conclusion .............................................................................................. 101
7.2 Limitations .............................................................................................. 104
References ..................................................................................... 105
Appendix ....................................................................................... 114
Appendix 1 ................................................................................................... 114
Appendix 2 ................................................................................................... 119
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Chapter 1. Literature Review
1.1 Introduction
Since the start of the 20th century, the automotive industry transformed the way
cars were used (E. Korstanje 2011). Renting a vehicle became a new opportunity
for customers that could not buy a vehicle or for companies that wanted to tap into
a new market. Rent-A-Car (RAC) companies stemmed from new customer needs,
creating an industry with a few dominant players. High barriers to entry, as well as
first mover advantage had created an industry dominated by few big players.
However, since technological advances have been changing the world (e.g. Internet,
network communications, smartphones…), there has been a shift in new
opportunities, making it possible for other players to grow in this market. For
instance, carsharing is starting to change the way vehicles are being rented and used.
Nonetheless, the main RAC players are innovating and adapting to these present
trends in order to maintain market share. Carsharing is becoming increasingly
popular and RAC players are trying to become the leaders in this market (E.
Korstanje 2011). In Europe, as well as in the United States (US), the main players
in the RAC industry are innovating their business models by implementing
carsharing schemes.
Carsharing is aggregating value in RAC firms, offering innovative services to
customers with different needs (Shaheen, Sperling & Wagner 1999). Traditional
renting is starting to change covering new consumer needs. According to Morgan
Stanley, “advances in technology are working to eliminate many traditional aspects
of the car rental business such as a human interface at an airport counter, accessing
the vehicle and determining a vehicle’s status and location” (Morgan Stanley 2014).
The main players in the rental car industry are becoming aware of these changes
and are innovating their business models to meet news trends.
Throughout this research the main RAC companies in Europe and United States
will be analysed using a business model framework, the business model canvas, to
understand how they are adapting and integrating their business models to underpin
carsharing schemes. In the US Avis Budget, Sixt, Hertz Holding (Hertz), Enterprise
Rent-a-Car (Enterprise), and U-Haul are the main players that will be covered in
this research. In Europe, Avis Budget, Sixt, Europcar, Hertz, and Enterprise will be
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analysed. To begin, a general understating of what a business model is will help
clarify the scope of this research. A review of the literature will support several
author’s understandings concerning business models. Then, the business model
canvas will be used to analyse innovative changes in different RAC companies.
Additionally, analytical approaches concerning prices and distance in carsharing
will help understand in which cases one system of carsharing is more affordable
than the others. Finally, how big of a threat carsharing is to RAC businesses, as well
as future trends in the industry, looking at smart cities as the next potential
innovative approach will be reviewed. This research will also help understand how
and if main players in the RAC industry need to innovate their business models
faster each time with an increasing threat of manifold technologies and new players.
1.2 Business Model
The literature on business models suggest that there is not a clear understanding on
what a business model is or how this term is used. As Breivy and Wanber (2011)
convey, “no common definition of the business model construct exists” (Breivy &
Wanber 2011). Business models are sometimes referred to as the way the company
executes and implements a strategy, while this term really is concerned more with
“how a business works as a systems” (Osterwalder, Pigneur & Tucci 2005).
Executing a business model involves taking the concepts of business models and
transforming them into a plan with elements (business elements, structures,
processes…). (J. Teece 2010).
The term “business model” has no clear understating of what it is among different
authors, therefore, several different definitions will be provided. Then, in order to
develop the research, one specific structure of business model will be used:
Author
Dubosson-Torbay,
Osterwalder &
Pigneur (2001)
Business Model Definition
Definition
“A business model is nothing else than the architecture of a firm and
its network of partners for creating, marketing and delivering value
and relationship capital to one or several segments of customers in
order to generate profitable and sustainable revenue streams”
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“A business model is a conceptual tool containing a set of objects,
concepts and their relationships with the objective to express the
Osterwalder, Pigneur business logic of a specific firm. Therefore we must consider which
concepts and relationships allow a simplified description and
and Tucci (2005)
representation of what value is provided to customers how this is done
and with which financial consequences”
Johnson, Christensen Business models “consist of four interlocking elements, that, taken
& Kagermann
together, create and deliver value”
(2008)
Giesen,
Riddleberger,
Christner & Bell
(2009)
“The elements that define a business model are what value is delivered
to customers, how revenue is generated, how the company positions
itself in the industry, and how the value is delivered”
Gambardella & M.
Mc.Gahan (2010)
“A business model is an organizations approach to generating revenue
at a reasonable cost, and incorporates assumptions about how it will
both create and capture value”
J. Teece (2010)
“A business model articulates the logic, the data, and other evidence
that support a value proposition for the customer, and a viable
structure of revenues and cost for the enterprise delivering that value”
Amit & Zott (2012)
“A system of interconnected and interdependent activities that
determines the way the company ‘does business’ with its customers,
partners and vendors”
DaSilva & Peter
Trkman (2013)
“The term ‘business model’ often appears to encompass everything
from, among others, strategy, economic model, and revenue
model…The meaning of business model seems intrinsically
connected with a representation of reality, a simulation of the real
world through a model”
“There is a board consensus around four+1 critical components of a
Rayna and Striukova
business model: value propositions, value creation, value capture,
(2013)
value delivery, and value communication”
“A business model is the ‘recipe’ for how an enterprise creates value
KordaMenta (2014) for customers, partners and itself, based on its distinctive and superior
skills and competencies”
Table 1: Business Model Definitions (From the studied literature)
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There is a general consensus that the business model is an architectural set of
components or elements that when put into action are used to create value in order
to generate a profit (Osterwalder, Pigneur and Tucci (2005), Gambardella & M.
Mc.Gahan (2010), J. Teece (2010), Dubosson-Torbay, Osterwalder & Pigneur
(2001), Giesen, Riddleberger, Christner & Bell (2009), Rayna and Striukova
(2013), Johnson, Christensen & Kagermann (2008), & KordaMenta (2014)). The
main elements of a business model will be analysed and compared portraying how
RAC companies are innovating their business models by introducing carsharing in
their portfolios.
Interestingly, carsharing in the US and the term “business model” in papers had a
similar rate of growth proportional to that of the NASDAQ. In Figure 1 and Figure
2 it can be seen how there could be a relationship between the term “business
model” in papers, carsharing and technology. From the time when technological
advances transformed the world, businesses have been rethinking their business
models with more frequency and new mobility services have emerged with the
growth of new business models.
12000
4500
4000
10000
8000
3000
2500
6000
2000
4000
1500
$COMPQ INDX
Carsharing Cars
3500
1000
2000
500
0
0
1986
1990
1994
1998
Nasdaq Index
2002
2006
2010
Carsharing Cars USA
Figure 1: NASDAQ Index vs Carsharing Cars USA Source: DaSilva & Peter Trkman 2013
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12000
100
90
80
70
8000
60
6000
50
40
4000
30
Number of Papers
Carsharing Cars USA
10000
20
2000
10
0
0
1986
1990
1994
1998
Carsharing Cars USA
2002
2006
2010
Number of Papers
Figure 2: Number of papers vs Carsharing Cars USA
Source: DaSilva & Peter Trkman 2013
The term “business model” was first used in an academic article in 1957, but as
seen in Figure 2, did not start to appear considerably until the late 1900’s.
Carsharing was founded in 1948 in Switzerland, but did start becoming popular and
a potential business opportunity until the late 1900’s (Shaheen, Sperling & Wagner
1999). In the US, as seen in Figure 2, carsharing grew during the early 2000’s: it
started to enhance mobility when internet and communications developed and
improved, during the late 1990’s. Furthermore, these improvements made
carsharing a possible business opportunity at scale (Cohen & Kietzmann 2014).
Finally, smartphones and application development have made this service more
accessible than ever. Business model innovation has become necessary for RAC
companies to continue adapting to new services.
1.3 Business Model Innovation
RAC companies are innovating their business models in order to fill in new gaps in
the market. Similar to the term business model, there “has yet to achieve a common
definition in academic literature” regarding business model innovation (Breivy &
Wanber 2011). Although, there is a general agreement on how “a better business
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model will often beat a better idea or product” (Breivy & Wanber 2011) among
several authors, conveying that the change of business models is becoming more
powerful than implementing a new products or process (Debye 2014). Historically,
many managers related innovation with product development, but progressively
innovation is becoming more powerful in service, business models and other
intangible components (SloanSelect Collection 2011). Companies innovate to adapt
to present needs and future trends. In a fast changing world as todays, in order to
succeed dynamic innovative solutions are fundamental for survival (Giesen,
Riddleberger, Christner & Bell 2009). Although many managers agree on this, only
a few know how to successfully apply business model innovation (Alan Gleeson
2011).
According to Osterwalder, “business model innovation is the process of conceiving
and changing the business model; it ultimately involves a novel form of exchange
at some point along a company’s value chain” (Osterwalder & Pigneur 2010 &
KordaMentha1 2014). Although innovation is related with creativity and ingenuity,
in business models it can be defined in two ways (Pavie, Rödle & Tapia 2013).
According to Joseph Schumpeter, innovation can be radical or incremental (Rayna
& Striukova 2013). It is radical when more than one aspect or dimension changes
and breaks with the past, where incremental (ordinary) innovation has evolved from
“previous innovations and does so much more slowly and naturally” (Pavie, Rödle
& Tapia 2013). Innovation in businesses relates to a series of changes in a system
(Pavie, Rödle & Tapia 2013).
In the case of RAC and carsharing companies, innovation stems from proposing a
new value and service. Rent-a-car companies are known for their closed innovation,
compared to the open innovation in carsharing companies. The main RAC
companies agree on that open innovation is necessary in order to adapt carsharing
to their businesses (SloanSelect Collection 2011). Carsharing requires a dynamic
business model that is able to adapt faster to customer needs.
A possible way to analyse business model innovation is using Osterwalder’s
business model framework. In this research, Osterwalder’s business model canvas
(BMC) will be studied to analyse the different components that make up a business
model. This canvas is focused on “the rationale of how an organization creates,
delivers and captures value” (Breivy & Wanber 2011). It is built on 9 building
blocks that compose a business model. RAC companies have a traditional BMC
with several blocks that change completely with respect to a carsharing business
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model. These differences will be studied using the main RAC players in the US and
Europe.
1.4 Business Model Framework – Business Model Canvas
The three general components concerning the business model canvas are value
proposition, value creation, and value delivery (KordaMentha2 2014). As seen in
Figure 3 the BMC is composed of 9 blocks that are used to construct a business
model. The Business Model Canvas can be used to identify key drivers of difference
or innovation within an organization (KordaMentha1 2014).
Business Model Canvas
Key
Activities
Key
Partners
Customer
relationship
Customer
Segment
Value proposition
Key
Resources
Channels
Cost Structure
Revenue Streams
Figure 3: Business Model Canvas
Source: KordaMentha1 2014
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The main components of this framework are:
Value proposition:
It is the overall view of the output of the activity system of a business to the
customer. It is focused on the services and products in order to convince
customers that their product or service can fulfil their needs. Ultimately, it
solves a problem or satisfies a need.
Value Creation: Internal and External Factors – Critical for success
Key resources: Main assets that support the proposed value and business model.
Key Activities: Most important actions that the company does in order to fulfil
the proposed value and business model.
Strategic Partners: Main network of suppliers, alliances, and partnerships that
generate value to the business model.
Cost Structure: The main monetary means employed in the business model. The
main costs a business has to deal with related with their activities.
Value Delivery:
Customer segment: The target clients to whom the product or service is aimed
at.
Channels: The way or means in which the product or service is distributed
(customer interaction, communication…)
Customer Relationship: The way or means in which the business connects with
the customers. (Fundamental for survival and success in carsharing businesses)
Revenue Streams: Sources from where the money comes from into the business.
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Considering the nine components that define the business model canvas, the value
proposed that carsharing introduces is the epicentre from where business model
innovation of the main RAC companies stems from (KordaMentha2 2014). They
fulfil the need of customers that want a private vehicle without having to buy one;
urban dwellers that are changing the way they move around a city. This way of
renting a vehicle changes the way the value is delivered and the way the value is
created. As seen in Figure 4, business model innovation in RAC companies arises
from the value proposed, having a transformative impact in the rest of the
components in the business model.
Key
Activities
Key
Partners
Value
proposition
Key
Resources
Customer
relationship
Customer
Segment
Channels
Revenue Streams
Cost Structure
Figure 4: Business Model Canvas
Source: KordaMentha2 2014
The review of the literature has demonstrated how there is not a general
definition on what a business model is. Nonetheless, the business model canvas is
one way to define a complete business model and will be used to review how the
main RAC companies are innovating their models through the growth of carsharing
schemes. New gaps in the mobility sector are been deciphered and it will require
new and innovative business models to fill in the gaps. Carsharing introduces new
value propositions that changes and affects every component in the business model
framework. RAC and carsharing are two services that will be studied, then the main
players will be considered to understand how they fit into these markets and their
business models will be compared. Moreover, an analysis of carsharing driving
prices will be made to differentiate the services the main players offer, and finally,
future trends will rule the main player’s next innovation strategies.
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Chapter 2. Industry and Competitors
2.1 Rent-A-Car (RAC)
Renting or leasing a car consists in hiring a motor vehicle from a company or second
party during an amount of time. Renting normally consists in hiring a vehicle for
periods less than three months, and leasing for more than three months to two years
(SASB 2014).
Before carsharing existed, the way to have a temporary car was through a RAC
company. In 1916 the first fleet began to be available for customers that could not
afford or did not want a car (Counts, Dorstel & Mayers 2011). After the 1950’s,
when the Second World War ended, the industry mushroomed due to advances in
air travel, since RAC companies targeted mainly tourists and corporates. When
people travelled for vacations or work to a different city, and needed a car for a few
days, this market covered their needs. Airport locations, the main place where renta-car companies operate, served for both business and leisure travellers (SASB
2014).
Due to high barriers to entry (e.g. capital intensive business), first player advantage
has been critical to success in the RAC industry (Cohen & Kietzmann 2014). Since
the market started emerging, Hertz and Avis became the main players in a market
dominated by few competitors. Only Sixt, Europcar, U-Haul, and Enterprise in the
US and Europcar, Sixt, and Enterprise in Europe have been able to grow as
considerable players in this industry. From a global perspective, in 2013 the
industry generated about $50 billion in revenue (publicly traded companies account
for $37.5 billion, or 75% of the total revenue) (SASB 2014). The main customers
of RAC companies are leisure and business travellers with or without corporate
affiliation programs (Investor Campus 2002). A gap to cover customers that don’t
necessarily want a car for leisure or business travels had to be covered and
carsharing has started to cover this need.
After the 2008 financial crisis, a shift in customer behaviour as well as rise of new
trends (e.g. collaborative economy) changed the way RAC companies operated.
The business environment suffered tremendously, affecting the leisure atmosphere,
and therefore affecting the airlines industry. Considering how RAC and the airline
industry are highly connected, as the airline industry declined in profits, it affected
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the RAC companies too (SASB 2014). Less spending in leisure traveling and
business traveling affected RAC companies to the point where the RAC industry’s
revenues fell from 2006 to 2009 ( from $30 bn to $24.5 bn, or more than 18% in
three years) (SASB 2014). Smaller firms that began to lag were eaten by bigger
players and the economic downturn forced the industry to look into new markets.
Dominant players started to launch carsharing, although “they were not the first to
realize the potential of this new market” (Counts, Dorstel & Mayers 2011).
2.2 Carsharing
Carsharing is a 24/7 service in which members have access to a fleet of vehicles on
an on-demand, hourly basis. It is an innovative way of renting a car, not for days
per-se, but for hours or even minutes. It is most commonly known as the substitution
of car ownership, with many types of advantages (Millard-Ball, Murray, Schure,
Fox & Burkhardt, 2005). With carsharing a member can gain the benefits of a
private car without having to pay for insurance, gas, maintenance, cleaning…
In Europe, carsharing started to appear much earlier than in the US. The first
operators began in 1948 in Zurich, Switzerland. Until the late 1900’s carsharing
was a very small market compared to the present day (although it is considered a
niche product) (Morgan Stanley 2013). In the US the first carsharing operator,
Mobility Enterprise, was established in 1983 (Shaheen, Sperling & Wagner 1999).
Despite the fact that US carsharing started from replicating the European model,
the biggest player in the moment, Zipcar, was established in the United States.
Europe and the US have become the most attractive markets for carsharing growth
and the main RAC players are building their carsharing schemes around these two
markets.
Due to a lack of technological support (e.g. communications, internet…),
carsharing did not grow fast enough during its initial establishment in Europe.
When there was sufficient support, carsharing started to grow and Zipcar became
the biggest player in this market (Avis owns Zipcar). Enterprise, U-Haul, Hertz and
Sixt in the US and Europcar, Sixt, Enterprise and Hertz in Europe are trying to
expand their carsharing to compete against their biggest rival. From a global
perspective in 2013, the industry generated about $1 bn in revenues with about 3.5
million carsharing members and an expected 32 million by 2020 (Le Vine,
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Zolfraghari & Polak 2014 & Frost & Sullivan 2011). The main carsharing members
are urban dwellers that don not want to buy a car or feel that their private car is
unused most of the time.
Nowadays, carsharing is a trend that is growing exponentially, affected by the
change in consumer trends. “While historically access was perceived as an inferior
mode of consumption, the market has indicated a shift in the social cultural politics
of consumption” (Bardi & Eckhardt 2012). The crisis and the change in mind-set
of customers have started to transform the RAC industry. According to different
experts, “ownership is no longer the ultimate expression of consumer desire” (Bardi
& Eckhardt 2012). Consumer changes are also favouring a shift towards carsharing,
making the industry of carsharing the new desire of automakers and RAC
companies. The economy is shifting to a new sharing economy, from music (e.g.
Spotify) and movies (e.g. Netflix) to the housing market (Airbnb) and transportation
industry (e.g. Uber, Zipcar, bikesharing…) (Birdsall 2014). The sharing economy
has changed the way consumers think about ownership and created a new level of
engagement between inhabitants around the world (KordaMentha3 2014).
Carsharing is sometimes confused with carpooling, which is a different concept. It
encompasses the idea of ridesharing, a service made to join members that want to
share the same ride to get from destination A to B (Chellanthara 2013). Examples
of these services are Blablacar, which is used to travel long distances and share
costs of the trip with different members that want to arrive to the same destination,
or Uber, a platform that is used to get from point A to B hiring an individual driver.
In the transportation industry there is an increasing use of ridesharing (carpooling
and vanpooling), bikesharing, carsharing (share-used access to a vehicle fleet), and
on-demand riding services (Birdsall 2014). All these business models have in
common the way they operate in the “sharing economy” of collaborative
consumption, where individuals and companies offer their assets in new ways and
ownership is left aside (Cohen & Kietzmann 2014).
As opposed to RAC companies, carsharing companies can be for-profit companies,
cooperatives, or non-profit with a social aspect to change the environmental issues
of a city (Millard-Ball, Murray, Schure, Fox & Burkhardt, 2005). In the Transit
Cooperative Research program, they refer to carsharing as “ ‘the missing link’ in
the package of alternatives to the private automobile.” Members can use public
transportation like buses or trains, taxis, bicycles, and carsharing to move around a
city.
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Carsharing is concentrated in metropolitan areas, and according to the Transit
Cooperative Research, 95 % of the members in the US live in those areas. Vehicles
are unused an average of 23 hours per day (Shaheen, Sperling & Wagner 1999) and
carsharing is the perfect solution to optimize the use of a private vehicle in a city.
This service is emerging to address the gap between demand and supply for
sustainable mobility in cities (Cohen & Kietzmann 2014). Apart from being an
alternative to taxis, buses, train or bicycles, carsharing has very good benefits in
cities. The economics of driving change, less cars are introduced in cities, and due
to the type of fleets carsharing operators offer and the reduction of cars, there is a
reduction in emissions (Millard-Ball, Murray, Schure, Fox & Burkhardt, 2005)..
There are various types of carsharing models, but the RAC companies covered in
this research offer two (round trip and point-to-point) of the three types of
carsharing models:
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1. Round trip (B2C+B2B): Pick up the vehicle and return it in the same
parking spot from where it was picked up from, with a preservation made
via internet, app or by phone.
[Zipcar, Enterprise CarShare, UHaul CarShare, and Hertz 24/7 use this model]
A
Figure 5: Round Trip Carsharing
2. Point-to-point (also called “one way”) (B2C+B2B): Pick up the car with
or without previous reservation and return it to any location within a given
area.
[Car2go and DriveNow use this model]
A
B
Figure 6: Point-to-point Carsharing
3. Peer-to-Peer (P2P): Members use their own vehicles for carsharing
purposes (e.g. RelayRides). (Not picked up in this research - the main RAC
players have their own carsharing fleets).
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Carsharing and RAC companies are two different models of sustainable personal
transport. Figure 7 and Table 2 summarise the main differences:
Sustainable Personal Transport (Shared Vehicles)
Carpooling or
Ridesharing
Mutual
agreement
Car
Rental
Internet
based
Carsharing(covered in this research)
For
profit
-Blablacar
Nonprofit
-Zipcar
-Uber
-Car2go
Cooperative
-SAMBIL
-Mobility
-Wheels4All
- Goteborgs
Bilkoop
Figure 7: Three main types of personal Transports
Source: Frost&Sullivan 2010
Sustainable Personal Transport (Shared Vehicles)
Carpooling or
Ridesharing
Car Rental
Carsharing
Retained
No ownership
No ownership
Solutions
Ownership
Organization
Non-profit
For-profit
Mobility service
Shared mobility with
different time
arrangements
Usually daily
and longer
Vehicle type
Any vehicle that can
be shared
A large variety
of vehicles
Table 2: Three main types of personal Transports
For-profit, nonprofit,
and cooperative
Hourly and
daily
shared mobility
Majority are
smaller,
fuel efficient
vehicles
Source: Frost&Sullivan 2010
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As seen in Table 2, carsharing is a mobility service with different services focused
to reduce pollution (fuel efficient vehicles) in cities and support the need that urban
dwellers have.
2.3 Main Players in the US
2.3.1 RAC Players
The three biggest companies, Enterprise, Hertz, and Avis Budget, accounted for
95% of the market share in 2013 (Morgan Stanley 2014). As seen in Figure 8, the
American market is dominated mostly by three main players. The other players
analysed in this research, Sixt and U-Haul, are smaller competitors growing in a
fierce industry.
Leisure rentals accounted for 44% of the industry’s revenue, 35% accounted for
businesses revenue and 21% derived from leasing activities; only 2% from
carsharing (SASB 2014). In the US, car rental revenues amounted to $24.5 billion
in 2013. Notably, out of 24.5, about $ 13.5 billion (~54% of total revenue) came
from airport renting activities (Credit Suisse 2014). According to Credit Suisse,
Enterprise, Hertz, and Avis accounted for 33%, 37%, and 26% of the total market
share in on-airport locations and 66%, 13%, and 16% of total market share in offairport locations, respectively (Credit Suisse 2014).
US RAC Market 2013
Other, 5%
Avis Budget, 21%
Hertz, 25%
Enterprise, 49%
Figure 8 US RAC Market Share (2013)
Source J.P. Morgan 2014
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Of the three largest companies in the industry in the US, Enterprise is the only
private one; Hertz and Avis are public companies. Each of these companies have
made acquisitions of other medium sized players during the past years: Enterprise
Rent-A-Car owns Alamo and National, and Hertz owns Dollar and Thrifty (SASB
2014). The other two players, Sixt is public and U-Haul is private but is owned by
a public company.
2.3.2 Carsharing Players
Regarding carsharing, North America accounted in 2013 for 50.8% of worldwide
membership (Birdsall 2014). According to Shaheen and Cohen (2014), and as seen
in Figure 9, there were in 2013 24 U.S. carsharing programs that claimed about 1.2
million members and about 17,000 vehicles (TRSC 2014). Furthermore, the three
largest providers of carsharing in the US amounted for 87.2% of the total
membership (Shaheen & Cohen 2014).
In North America, rental car programs represented 67.0% and 64.7% of the
carsharing membership and fleets deployed, respectively, in 2013 (Shaheen &
Cohen 2014).
Carsharing Growth US
25
1,4
20
1,2
1
15
0,8
10
0,6
0,4
5
Cars (thousands)
Members (millions)
1,6
0,2
0
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(jan)
Members
Cars
Figure 9: Carsharing Members and Cars US
Source: Shaheen & Cohen 2014
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As seen in Figure 9, carsharing has grown fast during the past years in the US. Since
2006, the number of cars grew by 87% and the number of members by 92%. In
particular, in between January 2013 and January 2014 carsharing fleets grew 42%
in the US (Shaheen & Cohen 2014).
Increasingly, RAC companies are shifting from a traditional rental company to a
provider of a changing, growing range of mobility services. In the US, the three
main players, Enterprise, Hertz, and Avis Budget offer Enterprise CarShare, Hertz
24/7 and Zipcar. Then Sixt, Europcar, and U-Haul, offer DriveNow, Car2go, and
UHaul CarShare. In Europe RAC and carsharing presence is remarkably more
diversified.
2.4 Main Players in Europe
2.4.1 RAC Players
The largest companies in the rental industry in Europe are Europcar, Avis, Hertz,
and Sixt and Enterprise (under National Alamo brand) respectively. Figure 10
shows how the European Market in more fragmented than in the US, with 55% of
the market share covered by the three main players. Enterprise is growing fast in
Europe, with various acquisitions during the last years. Sixt is the main player in
Germany and growing rapidly in other cities around Europe (Bestir & Bestor 2014).
In Europe, car rental revenues amounted to $13.4 billion in 2013. In particular, out
of the 13.4, $ 5.1 billion (38% of total revenue) came from airport renting activities
(Hertz AR 2013). According to Hertz, “Europe has generally demonstrated a lower
historical reliance on air travel, the European off-airport car rental market is
significantly more developed than it is in the United States” (Hertz AR 2013).
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European RAC Market 2013
Enterprise
(National
Alamo), 5%
Sixt, 10%
Hertz, 16%
Avis Budget, 18%
Other, 30%
Europcar, 21%
Figure 10: European RAC Market Share (2013)
Source: Credit Suisse 2014
Of the three largest companies in the industry in Europe, Europcar is the only
private one; Hertz and Avis are public companies. The other two players, Sixt is
public and Enterprise is private. Interestingly, the two biggest players of each area
(US and Europe) are privately held companies.
2.4.2 Carsharing Players
The RAC companies with carsharing fleets in Europe amounted to 38.7% of
worldwide carsharing membership in 2013 (Total worldwide membership in 2013:
3.5 million members) (Birdsall 2014). Carsharing in Europe represented about 39%
of the worldwide market share (Roland Berger 2014). As seen in Figure 11,
carsharing has started to grow with exponential rates. Since 2006, the number of
cars grew by about 80% and the number of members by an estimated 91%.
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Members (millions)
2,5
45
40
35
30
25
20
15
10
5
0
2
1,5
1
0,5
0
2006
2008
2010
Members
2012
2013
Cars (thousands)
Carsharing Growth Europe
2014 E
Cars
Figure 11: Carsharing Members and Cars Europe
Source: Le Vine, Zolfraghari & Polak 2014
Avis manages the biggest carsharing fleet in the world, Zipcar (Gardiner 2013).
Europcar (partnered with Daimler) operates Car2go and Sixt (partnered with
BMW) owns DriveNow. Then, Hertz operates a carsharing service called Hertz
24/7 and Enterprise owns Enterprise CarShare, although they only are present in
the US (Gardiner 2013).
Although the main RAC players have their own carsharing schemes, they operate
in a competitive market. In Europe there are more than 40 CSOs that operate in
more than 250 cities, with a market estimated to amount to € 7 bn in 2020 (Roland
Berger 2014). United Kingdom, Germany, France, and Switzerland will account for
75% of the European Carsharing market (Roland Berger 2014).
The main RAC companies in the US and Europe will be analysed in this research
to understand how innovation has affected their RAC service and how carsharing
has given an impulse in their way of operating. To conclude, Table 3 summarizes
the main players that will be analysed:
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Rent-a-car
Company
Presence
Carsharing Company
(relative to this
research)
Fleet
Model
US + Europe
Round-Trip
US + Europe
Point-topoint
US + Europe
Point-topoint
US + Europe
Round-Trip
US
Round-Trip
US + Europe
Round-Trip
Table 3: Car-Rental Players and their carsharing schemes
Source: Company Websites
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Chapter 3. Case Studies: Main Players
3.1 Avis Budget Group: Avis Budget & Zipcar
3.1.1 Avis Budget US
In 1946 Avis was founded by Warren Avis with the name of “Avis Airlines Rent A
Car Systems” in the airport of Detroit, introducing the first car rental company to
operate in an airport. On the other hand, Budget (before Avis and Budget merge)
was established in 1958 as a company for American customers with the goal of
becoming the best quality price brand. Its business mushroomed during the 1960s,
expanding its rental car services through the North American territory. Then, during
the 1990’s Budget considerably increased its services through its Budget truck
division (Avis Budget Group AR 2013). During 1996 the world’s largest hotel and
residential area franchiser, HFS Incorporated, buys Avis and changes Avis’ name
to Avis Rent-a-Car Systems, LLC. and a year later becomes public. Four years later,
in 2001 Cedant Corp (provider of business and consumer services) acquired Avis
and in 2002 acquired the Budget brand and Budget vehicle rental operations in
North America, Australia and New Zealand. After several acquisitions and
technology improvements, Cedant Crop. split into four independent companies, one
of them being Avis Budget Group, Inc (Avis Budget Group AR 2013). Advancing
in technology and innovating its business model, Avis Budget launches in 2009 the
first-ever application for rental cars in the US. In 2011 Avis Budget showed its first
intentions of starting a carsharing scheme with an agreement signed in 2011 with
I.D. Systems “for a free wireless vehicle management system for corporate clients
that would enable virtual rental transactions” (Brown 2011). It was called ‘Avis On
Location’ and was deployed on 25,000 vehicles. Then, in 2013 Avis Budget
acquired Zipcar, the biggest player in carsharing industry, and adding a new service
to the Avis Budget Group (Avis Budget Group AR 2013).
The revenues in the US accounted for $ 5.03 bn, representing a 64% of the total
revenues in 2013 (Avis Budget Group AR 2013). Avis had a strong presence in
airports in the US, where they amounted 71% of their total revenues (Avis Budget
Group AR 2013). They had in 2013 about 3,100 locations and about 344,000
vehicles in service in the U.S. With carsharing, they are planning to penetrate into
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the inner cities, gaining market share in new areas where they had a lower presence
(Morgan Stanley 2014).
Avis Budget Group owns Avis, Budget, Budget Truck and Zipcar brands which
represent 65%, 26%, 5% and 3% respectively of their $ M 7,937 revenues in 2013
(Avis Budget Group AR 2013). They have about “10,000 rental locations, with
about 512,000 vehicles, in approximately 175 countries around the world, and
through its Zipcar brand more than 900,000 members” (Avis Budget Group AR
2013).
3.1.2 Zipcar US
Zipcar was founded in January of 2000 in the US by Antje Danielson and Robin
Chase in Cambridge, Massachusetts (Counts, Dorstel & Mayers 2011). When
Zipcar started operating in the US, they replicated the service that already was
growing in Europe. Zipcar targeted mayor key cities (Boston was their first city,
then Washington DC in 2001 and New York City in 2002) as they wanted to help
customers have a new alternative to car ownership and reduce the number of
vehicles in the cities. During the initial years, and as happens to any carsharing
company, cash burned fast and had to look for investors that believe in their
business. By 2005 they secured $ 10 M from investors, but also ousted Robin Chase
from Zipcar. Scott Griffith, former CEO of Digital Goods (software company)
became Zipcar’s new CEO in 2005. After 10 years of no profits, Zipcar decided to
raise more capital by going public. With an initial target of raising $75 M at $18
per share, they ended up with an outstanding $174 M (Counts, Dorstel & Mayers
2011). Then, in 2013, Zipcar was acquired by Avis Budget by $473 M, at $12.25
per share, with the reassignment of their CEO, Mr. Griffith, but with a future
perspective on synergy efficiency on fleet costs and management. (Primack 2013).
Although Avis has constantly innovated in products (Wizard system in 1973, in
2000 first internet internet-based operating system, mobile application to all mayor
smartphones by 2012), Zipcar has become their most recent innovation in their
business model. Zipcar became their new service with aggregated value which uses
advanced vehicle technologies to develop a self-service solution. As of 2014, Zipcar
in the US operated in 53 cities (Zipcar Web 2014) with more than 100+ campuses
in North America.
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3.1.3 Avis Budget Europe (Avis Europe ltd.)
In Europe, by 1953, Avis entered Europe, and established their corporate offices in
the United Kingdom in 1956 and was name Avis Europe. By 1973 Avis Europe was
recognized as the market leader in Europe, Africa and the Middle East (EMEA).
Then in 1986 Avis Europe spun off from Avis and in 1989 Avis Europe became a
consortium among Avis Group (Now Avis Budget Group), General Motors, and
D’letern before becoming public in the London Stock Exchange in 1997. Then, in
2011 Avis Europe plc (public limited company) was acquired for $1 bn by Avis
Budget Group with its licenses to operate in EMEA and Asia. Avis Budget Group
became the largest publicly traded RAC and created was present in four operating
regions: North America, Europe, Middle East and Africa (EMEA), and Latin
America/Asia (Avis History 2011). After the acquisition of Zipcar in 2013, Avis
now operated in Europe with RAC and carsharing vehicles.
3.1.4 Zipcar Europe
Zipcar started operating in Europe in 2009 by acquiring a percentage Avancar, the
first Spanish carsharing start up based in Barcelona. By 2012, Zipcar completed the
whole acquisition of the Spanish carsharing company. In order to grow around other
European cities, in April 2010 they acquired Streetcar Limited, a carsharing startup based in London, UK (Zipcar Prospectus 2011). London became the city of
reference for expansion around Europe. As of 2014, Zipcar in Europe operates in
17 cities in Europe (4 countries) which are Austria, France, Spain and the UK.
3.1.5 Avis Budget Business Model Canvas
Avis is a company with many years of international fleet management experience.
Constantly adapting to trends in the mobility market and adapting their business to
fulfil customer needs have made them stand where they are. Avis Budget’s business
model canvas is portrayed in Figure 12.
Avis offers many kinds of services inside their rental programs to give as many
solutions as possible to the customer. Their international presence around the world
guarantees a service with manifold options for customers.
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Avis US Business Model Canvas: Europe + US, Europe, US
Value
proposition
Key
Activities
- Rent a car in airports and cities
-24 hours minimum rental time
-Rental, leasing, and fleet
management.
-Car for traveling
Key
various days,
Partners
vacations in a
different city,
-Partnership
business meeting
with mayor
in different cities
airlines and
- Brand: Avis,
hotels
Budget, Budget
-Railroad +
Truck, Payless
Key
Cruise
and Apex
Resources
partnerships
- Accessibility:
- [ 520,000 vehicles worldwide ]
many cars per
Concession
- 10,000 car and truck locations
office
agreements
(4,500 licensed)
- FastFleet
with
- 67 % Fleet in North America
solutions
airport
- Wizard technology system
(organizations
authorities
- Premium luxury, sport and
manage their
performance vehicles
own fleet)
Commercia
- 29,000 employers worldwide
- Worldwide
l contracts
(20,000 were
Presence: 175
(PGA Tour)
employed in North America)
countries
- 28% fleet international (Includes -Avis Preferred
every country expect the ones in
Select & Go
North America)
Cost Structure
- Operating Costs (parking, insurance, accidents,
maintenance…)
- Vehicle Depreciation
- SG&A
- Vehicle Interest
- Non-vehicle D&A
Customer
relationship
-Customer
loyalty
programs
-Avis
Preferred
(bypass
program to
avoid
paperwork)
Channels
- Television,
radio, printed
advertising…
- Internet and
email
marketing
- Wireless
mobile device
applications
- Facebook
and twitter
Customer
Segment
Individual
s older
than 25
years old
and 1 year
minimum
of driving
license
Corporates
-Insurance
customers
Revenue Streams
- Avis: 65%
- Budget: 26%
- Budget Truck 5%
- Vehicle rentals and licensee (other
companies can operate their brand
around the world)
- Accessory sale or renting (GPS,
roadside assistance service, fuel
service options...)
- 37% car fleet comprised of vehicle
agreements
requiring automobile manufacturers
to repurchase vehicles
Figure 12: Business Model Canvas Avis Budget
Source: Avis Budget Group AR 2013
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3.1.6 Zipcar Business Model Canvas
Zipcar Business Model Canvas: Europe + US
Key
Activities
Key
Partners
- Car nearby, ondemand, pay-asyou-go service, per
hour (minimum 1
hour)
-Round-trip
carsharing
- Operations and
fleet management
Universities
- Federal
agencies and
Key
local
Resources
governments
-Toyota,
- Vehicles > 12,000
Ford, Opel
- Integrated
technology platform
- On board
computers with own
technology software
- EV, Low emission
vehicles…
- 30 mayor cities
- 300 college
campus worldwide
Customer
relationship
Value
proposition
- Zipsters
- Customer loyalty
programs
- Community of members
- Committed to urban
sustainable living
- Feedback from members
in
local events, advertising,
sponsorships, public
relations, and social media
activities
- "Wheels
when you
want them"
- Sharing is
the new
buying
- Largest
carsharing
fleet in the
world
- Vehicles
can be used
from hours to
days.
- With the
Channels
same Zipcard
open vehicles - App, internet, sms, phone
all around
- Facebook and twitter
North
- Friend recommendation
American and
Europe
Customer
Segment
- >900,000
members
worldwide
- Individuals
in cities older
than 21 years
old (19 for
campuses)
- Corporates
and
Governments
- People that
don't want to
own a car
- People with
a car in a city
Revenue Streams
Cost Structure
-Vehicle costs: “lease expense,
depreciation, parking, fuel, insurance, gain
or loss on disposal of vehicles, accidents,
repairs and maintenance as well as
employee-related costs.”
- Member service
- SGA
[ Zipcar 3% of Total Avis Budget Income]
- Annual fees
- Monthly fees
- Usage fees (Price per hour + some kilometres
included in their price – if exceeded, price per
kilometre)
- Checking driving records and credit card
information
Figure 13: Business Model Canvas Zipcar
Source: Avis Budget Group AR 2013
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As seen in Figure 12 and 13, both services have different business models. Zipcar
represents a shift in mind-set, operational management, and customer relationship.
Zipcars are found mostly in inner cities in parking spaces right next to members’
homes in order mimic the same sensation as having a private vehicle. Furthermore,
they label vehicles with different human names so customers feel more engaged
with their carsharing fleet. Zipcar even has a name for their members: Zipsters. On
the other hand, Avis serves a less client interactive service, but guarantees a fleet
around the world with different brands and vehicles with the option of renting a
vehicle in one place and leaving it in another Avis location. All these differences
revolve around the epicentre of the mayor difference in both services: value
proposition.
3.1.7 Value Proposition: Avis Budget & Zipcar
3.1.7.1 Avis Budget: Value Proposition
Avis Budget Group (Avis, Budget, Budget Truck, Payless and Apex) offer
traditional car rental services. Their biggest and most important value they propose
is their brand, history and experience in this market. The brand is associated with a
multinational worldwide company that offers cars for leisure and business travel
almost in any part of the world. Avis Budget and its other brands are focused on
daily and weekly transactions for different kinds of travellers or short-term
substitutions of cars during repairs of owned vehicles: they offer cars for a
minimum of 24 hours and can rent a car days, weeks or even months. This value is
transformed in an assured accessibility of fleet availability. Their prices do not
included fuel, parking or insurance as opposed to Zipcar’s carsharing schemes, but
they do include maintenance and cleaning. Furthermore, Avis talks about clients
and not members due to the fact that the service is not so oriented to interact with
the customer as in Zipcars services, where there is a community based platform.
Avis Budget offer any kind of car with their brands Avis, Budget, Budget Truck,
Payless and Apex. Budget is focused more on clients that look for quality price, and
Budget Truck on offering one of the largest local and one-way truck rental
businesses in the US (f.e. As of 2013, Budget Truck had a fleet of 23,000 trucks
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that are rented through a network of approximately 1,300 dealers and 350
Company-operated locations) (Avis Budget Group AR 2013). Furthermore, Payless
is a leading supplier positioned to serve the high-end segmented car rental vehicles
in the industry, but operates mostly in New Zealand and Australia.
Although they do not have a focus of customer relationship as a carsharing provider
does, they do offer various services to engage clients to use their brand: “
Avis Preferred, a counter bypass
program available at major airport
locations
Avis Specialty Vehicles, a line of
luxury and sport vehicles such as
the BMW 328i, 528i, 740i and X3,
Ford Mustang, Dodge Challenger,
Infiniti JX, Lincoln Navigator and
the Chevrolet Camaro and Corvette
Roving Rapid Return, wireless
technology that permits customers
who are returning vehicles to obtain
a printed charge record from
service agents at the vehicle as it is
being returned and/or to receive a
receipt via email
Amenities such as Avis Blast, a
portable satellite radio product, and
Avis Access, a full range of special
products and services for drivers
and passengers with disabilities
”Figure
Avis Preferred Select &
Go, a program added in
2012 at certain U.S.
airport locations which
allows customers to
select an alternate vehicle
or upgrade their vehicle
choice without visiting
the rental counter
Portable GPS units for rent
that feature Bluetooth
hands-free calling and MP3
playback capability
Avis Prestige, a line of
luxury performance cars
and stylish convertibles
offered to our customers
in Europe
Availability of eco-friendly
vehicles, including
gas/electric hybrid vehicles
like the Ford Fusion, Ford
C-Max and Toyota Prius
A 100% smoke-free car
rental fleet in North
America
Etoll electronic toll
collection, which lets
customers avoid toll booth
lines
Avis Interactive, a
proprietary management
tool that allows corporate
clients to easily view and
analyse their rental
activity via the Internet.
Avis First, a customer
loyalty program that
rewards customers with
additional benefits for
frequent rentals
14: Avis Budget Different Service (Value Proposition)
Source: Avis Budget AR 2013
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Although in general RAC companies are not self-service systems (a client has to go
always to Avis’ offices to pick up the car) Avis is trying to change this system with
the use of innovative services as the Avis Preferred service. Therefore, as opposed
to Zipcar, it is not a 24/7 service. Avis Budget has an online platform called Wizard
system which their fleet reservation, rental, data processing and information
management system to control everything around the world (Avis Budget AR
2013).
Another strong value that Avis Budget proposes is the varied fleet that they offer.
In 2012 they purchased vehicles from “Audi, BMW, Fiat, Hyundai, Kia, Mazda,
Mercedes, Mitsubishi, Nissan, Peugeot, Porsche, Renault, Subaru, Toyota and
Volkswagen” and in 2013 from “Audi, BMW, Chrysler, Fiat, Ford, General Motors,
Hyundai, Kia, Mazda, Mercedes, Mitsubishi, Nissan, Peugeot, Porsche, Renault,
Subaru, Toyota and Volkswagen” (Avis Budget AR 2013). This varied amount of
cars brands and services guarantees an equipped rental service with different
solutions that a customer is looking for (Avis Budget AR 2011).
3.1.7.2 Zipcar: Value Proposition
As seen in the business model canvas of Zipcar, it has mostly innovated in five
different areas: Profit Model, Process, Customer Engagement, Product
Performance, and Channels. Considering the BMC, the most important component
that interconnected the different elements was the new value proposition that Zipcar
offered with respect to the traditional RAC model of Avis Budget.
Zipcar’s value proposition, “wheels when you want them”, offers a user friendly
“service where members have immediate access to a broad network of vehicles
without supporting the costs of ownership” (Zipcar IsIt 2014). It is estimated that
in the US a member can save up to $ 500 a month using Zipcar’s carsharing service
compared to having a private vehicle (Zipcar IsIt 2014). In Zipcar usage price
(time+distance) they include fuel, maintenance, cleaning, parking and insurance.
Zipcar has a simple process to join a very big community and fleet. It is as easy as
what they say: 1. Join 2. Reserve 3. Unlock and 4. Drive. Thanks to a technology
platform designed by Zipcar, they are able to manage real-time interactions between
the customer and the fleet of vehicles. The platform enables members to access and
drive by using their smartphone, being able to reserve, extended, open via wireless
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connection a vehicle, and allows Zipcar to control all main KPIs in order to
guarantee the best possible service (Traverso 2012).
According to several studies, Zipcar’s value proposition eliminates the need for
about 15 to 20 private vehicles: “Members reported that they reduced their miles
travelled by 44% by making smart transportation choices. This relies on a mix of
solutions including Zipcar, walking, taxis, biking, and buses. Zipcar addresses
responsible urban living, financially smart consumption, and environmentally
sustainable transportation” (Traverso 2012).
This value proposition has led to Zipcar to have more than 900,000 members and
more than 14,000 cars and having a total market share of 40% of the carsharing
market as of 2013, as seen in Figure 15 (Credite Suisse 2014).
2013 Carsharing Market Share (Estimated Total Market
Share ~$650 mm)
Zipcar
Others
~ 40%
~ 60%
Figure 15: 2013 Zipcar vs Carsharing Market Share
Source: Credit Suisse 2014
3.1.8 Synergies: Avis Budget & Zipcar
Combining RAC and carsharing for Avis Budget Group is a strategic move that
benefits both sides, Avis Budget and Zipcar. According to Ronald L. Nelson, Avis
Budget Group chairman and chief executive officer, "By combining with Zipcar,
we will significantly increase our growth potential, both in the United States and
internationally, and will position our Company to better serve a greater variety of
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consumer and commercial transportation needs". Avis Budget Group sees
carsharing as a complement to their traditional business (Avis Budget Group Press
Release 2013). From Avis Budget side, they provide capacity of efficient fleet
management at a big scale, and from Zipcar’s point of view, they offer an innovative
way of moving around cities with cars with an on-demand, 100% autonomous
service underpinned by its technological capacity.
The Company is expected to generate from $50 to $70 M in annual synergies (Vine,
Zolfraghari & Polak 2014). Also, they expect cost reductions across the fleet life
cycle and have removed Zipcar’s cost of being a public company (Avis Budget
Group Press Release 2013). There is a growth opportunity for both sides and a
complementary utilization of vehicles for times of peak demand. During the
weekend, Zipcar’s fleet demand is at its maximum utilization and during vacations
or working days Avis Budget’s fleet is on high peek demands. As seen in Figure
16, the synergies products will have an incredible complementary interaction to
maximize fleet usage and reduce costs.
Avis Budget & Zipcar Fleet Utilization Synergy
Fleet Utilization
100%
0%
Monday
Tuesday Wednesday Thursday
Avis Budget
Friday
Saturday
Sunday
Zipcar
Figure 16: Avis Budget & Zipcar Fleet Utilization Synergy
Source: Vine, Zolfraghari & Polak 2014
Zipcar and Avis Budget graph indicates that the fleet utilisation between its
traditional car hire and round-trip carsharing unit is complementary, with an
estimated $20 M+ opportunity, and has therefore begun to pool their fleets.
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3.2 Sixt SE: Sixt & DriveNow
3.2.1 Sixt US
Sixt is a European RAC company that has proven to become a considerable
competitor in a country dominated by three main players. In the US, Sixt entered
the market in 2011 and is currently (2014) present in 15 airport car rental locations
in “California, New Jersey, Texas, Tennessee, Washington, Florida, Arizona,
Nevada, Connecticut, Massachusetts, North Carolina, South Carolina and Georgia”
(Sixt AR 2013). It is present in 4 states in the US, with 17 stations of its own, and
9 franchise stations. Compared to the biggest three players and the time Sixt has
been operating in the US, it is clear that they have a competitive road ahead.
3.2.2 DriveNow US
Although DriveNow is mainly present in Europe, it focused very early (2012) on
expanding to the US. From the begging they started operating in San Francisco,
albeit due to a “crazy quilt of parking regulations, a slow-moving city government
and a culture in which every inch of curbside space is a battleground,” DriveNow
has had to change is initial plans and has taken more than expected to penetrate into
the US (Nelson 2015). Nonetheless, operating in San Francisco attracts customers
with similar entrepreneurial mind sets. One of their biggest users are Google’s 2500
employees which already have three DriveNow hubs: “two at its main campus in
Mountain View and one at a satellite campus in San Bruno that houses the YouTube
video streaming service” (Nelson 2015). They are still small in the US, but are
planning on expanding during the next years.
3.2.3 Sixt Europe
Sixt SE is a car rental company headquartered in Pullach, Germany with a long
history, considered the fifth largest RAC Company in the world (Sixt AR 2013 &
Morgan Stanley 2014). In 1912 Martin Sixt founded the company in Munich but
not until 1966 did they open airport offices in two cities of Germany, Munich and
Frankfurt. In 1951 the company was named “ ‘Auto Sixt’ Rent a Car”. Then, by
1969 Erich Sixt, former Chairman of the Board of Sixt SE, started working in Sixt
as the third generation offspring. In 1982 the name of the company changed again
to “Sixt Autovermietung GmbH”. The company was formalized in 1986 as a result
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of “Sixt Autovermietung GmbH” becoming public (with a new name: “Sixt
Aktiengesellschaft”), where it started to mushroom as a company. By 1997 it
became the mayor RAC in Germany, having various partnerships with airlines like
British Airways and Deutsche BA and South African Airways. By this time Sixt
started to expand in Europe and the US, covering countries in Europe like “Italy,
Ireland, the Netherlands, Hungary, Malta, Spain, Portugal, and the Czech Republic”
(Corporate History 2014). It was not until 2013 when “Sixt Aktiengesellschaft”
changed again its name to Sixt Societas Europaea (SE) (Corporate History 2014).
As of 2013, Sixt SE is the parent company that acts as the holding company for the
Sixt Group (Sixt AR 2013). They operate in Europe, in Belgium, Germany, France,
Luxembourg, the UK, Monaco, the Netherlands, Austria, Switzerland and Spain.
Sixt is the leader in Europe’s biggest rental market, Germany, with a 30% share
(Six AR 2013).
In 2013, Sixt’s revenues amounted to € 1,665 M where in Germany they account
for € 1,134 M (68% of total revenues) (Sixt AR 2013). They have locations
worldwide, which amount to 4,500 in 2014 with more than 3,000 employees (Sixt
Motion 2014). Sixt in 2014 was present in 105 countries and had more than 220,000
vehicles (Sixt 2014).
3.2.4 DriveNow Europe
DirveNow was launched in Germany in 2011 as a 50-50 Joint Venture between
BMW and Sixt. It has expanded in several cities during the last years. For example,
they started in Hamburg their operations in 2013, and in just two months they had
more than 25,000 members using their service, a clear indication of how well
carsharing is established in Germany (Six AR 2013). By 2014 DriveNow had 2350
cars across Europe and in the US. They have become one of the fastest growing
carsharing services in Germany, where the number of members in 2013 amounted
to 215,000 (three times as much as in 2012) (Sixt AR 2013). As of 2014, they
operate in Germany, UK and Austria in Europe with a fleet of BMW’s (series 1)
and Minis.
BMW's carsharing service allows customers to reserve vehicles using they
smartphone app and geo-locate vehicles around the city. The cars are not parked in
fixed parking spots and can be picked up/dropped off around delimitate areas in
each city. This way, the offer point-to-point carsharing in a dynamic way, relying
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on their app as the most important tool for members to use their service. Their rates
cover gas, insurance, parking and maintenance (Morgan Stanley 2014).
3.2.5 Sixt SE Business Model Canvas
Figure 17 shows Sixt’s Business Model Canvas. Similar to Avis Budget, their
strongest points are concentrated in the size of their company, vehicle brands, and
fleet management capacities.
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Sixt Business Model Canvas: Europe + US
Key
Activities
Customer
- Rent a car in
relationship
airports and cities
-24 hours
Value
-Customers
minimum rental proposition
use cars with
fee
no type of
Key
- Leasing
- Car for
affiliation
Partners
Activities (Sixt
traveling
-Customers
Neuwagen)
various
understand
- Tourist
- Sixt Mobility
days,
and like the
industry
Consulting (full- vacations in
high quality
(Hotels)
service fleet
a different
brand
- Mobility
management)
city,
industry
- MyDriver
business
- Airlines
- Sell second
meeting in
- ADAC
hand vehicles
different
(German's
cities
Channels
motorists'
- Brand:
association)
Sixt
- Television,
- Parking’s
Key
- Present in radio and print
Resources:
105
advertising
- 220,000
countries
- Internet and
vehicles (2013)
(2014)
email
- Worldwide
marketing
vehicles
- Wireless
- BMW, Audis,
mobile device
Mercedes…
applications
- Facebook
and twitter
Cost Structure
- Operating expenses (vehicle
maintenance, acquiring, leases…)
- Personnel expenses
- D&A, Wages and Salaries
Customer
Segment
- Individuals older than
25 years old and 1 year
minimum of driving
license
- Corporates
Insurance/Replacement
for several days
- If 21 to 25 charged for
younger driver
Revenue Streams
- Rental Business
- Leasing Business
- Consulting services
- Fleet management
Figure 17: Sixt Business Model Canvas
Source: Sixt AR 2013
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Sixt BMC is similar to traditional RAC companies, where they have strong
partnerships with important airline travelling brands and other big players that add
value to their service. On the other hand, Figure 18 shows DriveNow’s BMC and
how a point-to-point carsharing scheme required specific customers and customer
relationships in order to succeed with their service. These elements are underpinned
by DriveNow’s value proposition.
3.2.6 DriveNow Business Model Canvas
DriveNow Business Model Canvas: Europe + US
Key
Activities
Customer
relationship
- Cars rented by the minute
-One-way trips
Key
- Corporate carsharing
Partners - Sales and Marketing (local
events, advertising,
- Federal sponsorships, public relations,
agencies
and social media activities)
and local
-Operations and fleet
governme
management
nts
- BMW
Key
and Mini
Resources
Vodafone
- 2,350 vehicles US and
Europe
- BMW Series 1 and Mini
-BMW and Sixt support
Customer
Segment
- Customer
registration is
very intuitive
Value
-App to
Generation
proposition
engage
Y
customer in
- People
- "Drive it
friendly user that don't
Now"
experience
want to
- Find car via
have a car
app, drive,
Channels
in cities
leave, All
- App,
- Test
Included
internet, sms,
driver for
phone
BMW
- Facebook
- >160,000
and twitter
members
- Friend
recommendati
on
Cost Structure
-Vehicle costs: “lease expense,
depreciation, parking, fuel, insurance, gain or loss
on disposal of vehicles, accidents,
repairs and maintenance.”
- Member service , SGA
Revenue Streams
- Usage fees
- Registration fee
Figure 16: DriveNow Business Model Canvas
Source: Sixt AR 2013
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3.2.7 Value Proposition: Sixt & DriveNow
3.2.7.1 Sixt: Value Proposition
Sixt SE’s history and origins (German) conceive a strong value proposition in the
mobility sector. The brand and the type of vehicles this company has is one of their
strongest assets. The traditional rent a car business is known by everyone, but trust
and brand is hard to build. They offer German brands like BMW, Mercedes-Benz,
or Audi, and also offer vehicles of the category of a Jaguar or Aston Martin (Six
AR 2013). With 60% of premium fleet brand, any customer that rents their vehicles
understands and values quality of the product. Furthermore, they offer as of 2014
Vehicle Rental, Rent a Truck, Holiday Rental Vehicles, Limousine services, and
Luxury cars. Sixt also offers a wide range of strategic partnerships with reputable
companies in the tourism and mobility industries, through which “they can offer
their customers comprehensive travel-related services as well as numerous travel
discounts” (Sixt Brand 2014).
They also offer myDriver, which is a chauffeur service launched in the first quarter
of 2013 (Six AR 2013). It is an alternative to taxis and classic limousine services,
with a fixed cost when reserving a vehicle for a short trip. It is present in several
German cities for private clients and businesses (Sixt AR 2013).
Then, apart from renting a car, they offer leasing activities like Sixt Neuwagen and
independent business segment that offers customers leasing new cars from 30
different car manufactures (Sixt AR 2013). It is independent from DriveNow and
was formed by a cooperation between Sixt Leasing and the PSA Group (Peugeot
and Citroen). With the leasing activities they offer Sixt corporate carsharing, a
service portfolio of their leasing arrangements (Sixt AR 2013).
Sixt has a varied portfolio of products and services that ensure product and service
solutions to customers. DriveNow was another big step in offering every kind of
mobility solutions.
3.2.7.2 DriveNow: Value Proposition
DriveNow’s most important value proposed is cars by the minute with point-topoint trips. Customers use a service that can be used from minutes to hours
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(normally used less than one hour), and leave the cars in any legal space when their
trip is over. Customers generally use this service for spontaneous uses to move from
one place to another without having to return back (Gardiner 2013). Point-to-point
carsharing, although still an alternative to public transportation, is not seen as much
as a replacement of someone’s own vehicle. The fact that a customer doesn’t have
a fixed spot with a car under their house has a psychological disadvantage in that
sense (Gardiner 2013).
Sixt offers this service with the click of an app. In a very simple way, customers
have a distributed network of BMW’s Series 1, X1, and ActiveE and Minis (Cabrio,
Clubman, and Countryman) to use. It is a service that also relies on BMW’s
successful technology, being comprehensive with BMW’s ConnectedDrive
information service or BMW’s fuel-efficient EfficientDynamics engines (Sixt AR
2013).
For Sixt, DriveNow is a point of inflexion in their innovation strategy. They
introduce a new business model different than the other services they had: point-topoint carsharing. BMW, the other partner in their joint venture, details how this new
innovation sets into place: “Our core business in the ’70s was selling cars; in the
’80s, late ’70s came the great innovation of leasing and financing, now you can pay
per use of a car. It’s like the music industry. You used to have to buy an album, now
you can pay per play” (Gardiner 2013). With DriveNow, Sixt invested in a longterm strategy to cover all aspects of mobility by supplying innovative, universally
useful and top-quality services. Alexander Sixt, managing director at Sixt car rental,
stated how big companies would be foolish not to lead the way in changing their
industries. “If you don’t disrupt your own business,” he said, “somebody else does
it without you” (Gardiner 2013).
DriveNow aggregates value to a company that is growing around Europe and the
US. Customer base is growing in both services and the brand is becoming stronger
implementing new services.
3.2.8 Synergies: Sixt & DriveNow
Sixt SE did not want to stay behind in the trend of new mobility services, and
invested in DriveNow. With it, they completed a circle of services that encloses any
situation a customer needs. As seen in Figure 19, DriveNow closes the gap of
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services it want to offer. It was “the missing link” in Sixt’s varied rental services.
Now a Sixt customer can use their varied services for any situation.
Sixt SE Services: " Only Pay What You Actually Need"
Sixt Rent a Truck
Sixt Mobility
Consulting
MyDriver
Sixt
Leasing
Sixt
Corporate
Carsharing
DriveNow
Sixt Rent a Car
6
1 MIN
1 DAY
MONTHS
Figure 19: Sixt Varied Services From minutes to years
3
1 YEAR
YEARS
Source: Sixt AR 2013
A combination of services and products reinforce Sixt’s brand to offer different
solutions to clients around the world. Due to point-to-point carsharing nature, it is
unclear how much cost reduction will Sixt benefit from using DriveNow. They will
still use DriveNow as an aggregated value to their services, but cost efficiency is
not as clear as with Avis and Zipcar. Vehicles, since they are not in fixed spots, are
not as easy to manage during low and high demands. Nonetheless, DriveNow’s
vehicles can work as a platform to help customers move around a city, and as a new
marketing way of showing Sixt’s vehicles to customers. Furthermore, Sixt use will
serve as a platform to optimize fleet usage (underused cars can change to carsharing
services or the other way around).
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3.3 Europcar Group: Europcar & Car2go
3.3.1 Europcar US
Europcar tapped into the American market much later than when it was founded in
Europe. In 1998 it formed a strategic alliance with Dollar Rent a Car (since 2010
property of Hertz) to enter the US. In order to penetrate into this market Europcar
has always partnered with different rental companies. In September 2008 Enterprise
Rent-A-Car, North America’s largest rental company, and Europcar created a
strategic alliance to operate Europcar’s brand in North America, as well as the
National Car Rental and Alamo Rent A Car brands (property of Enterprise) in the
EMEA area (license ended at the end of 2014 – no longer operated by Europcar)
(Enterprise Press 2008). In June 2013, Europcar and Advantage Rent a Car
(Franchise Services of North America) partnered to increase rental activity in the
US (Europcar Advantage 2013). This way, Europcar’s customer would be served
by Advantage in the US and outside of the US, Advantage’s customers would be
served by Europcar (Europcar Advantage 2013). In the US, as seen in Figure 20,
Europcar is not very present, due to the fact that the three biggest players in that
country have a market share of 95% (Credit Suisse 2014).
Figure 20: Europcar’s US and Europe Presence
Source: Company Website
Although their presence in the US is very small (about 50 different stations as of
2014), they are strongly present in Europe, Africa and the Middle East.
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3.3.2 Car2go US
Although Car2go first launched its services in Europe, its entrance into the US
Market stemmed at a very early stage of Car2go’s short history. After starting in
one city in Germany, Car2go’s second public launch was in the city of Austin,
Texas in May of 2010 (Car2go Torrance 2012).
It has grown in popularity in various cities in the US and as of 2015, operates in 12
cities. Some of these cities are Miami, Los Angeles, New York City or San Diego.
Due to the nature of Car2go’s carsharing system (point-to-point), it has a reduced
perimeter area where the vehicles are, compared to the actual size of the cities. For
example, in New York city, which has a total 780 square meters (301 square miles),
Car2go can only be found in about 94 square km (36 square miles), which is only
about 12% of the whole city (Miller 2014). In order for point-to-point carsharing to
work in cities, carsharing companies have to be granted with a license to park
vehicles all around a city without having to use fixed spots. For instance, in San
Francisco, due to the issues DriveNow encountered, Car2go has not launched their
services in that city.
Car2go in the US expect to expand to new cities in the US to tray to compete against
its biggest competitor, Zipcar. In Europe, Car2go is growing fast.
3.3.3 Europcar Europe
Europcar was founded by Raoul-Louis Mattei in 1949 in Paris with the name of
Companie Internationale Europcars and since then has experienced many changes
in its history. In 1957 Europcar partnered with Hertz to gain market share, and 20
years later, the name of Europcar, which was Europcar’s in the time, re-branded the
service to Europcar and expanded internationally around Europe (Italy and Spain).
By 1989 Europcar changed its company colour to green from the previous white
and red they had, and merged with InterRent Car Rental GmbH (known as the low
cost rental company of Europcar). By 1999 Volkswagen AG became the owner of
Europcar, demonstrating its trust in Europcar’s board and showed commitment in
developing a strong organizational culture. Then, in 2006 Eurazeo (French Private
Equity) acquired Europcar with new expansion plans. In 2007 Europcar
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strategically bought the businesses of Vanguard (National Car Rental and Alamo
Rent A Car and made a transatlantic alliance with Vanguard (Although, in 2008
Enterprise bought Vanguard, but Europcar still operated with National and Alamo
with a license agreement that ended in 2014) (Europcar History 2014 & Europcar
Brands 2014).
By 2014, this privately held company was present in more than 130 countries
around the world and now operates through two segments, corporately-owned
rental and international franchising (Overview Europcar 2014). They have more
than 10,000 locations and more than 186,000 vehicles in their fleet, becoming the
largest rental company in Europe. In 2013 Europcar’s revenues amounted to € 1,903
M (Eurazeo 2014). Europcar Groupe’s brand portfolio include Europcar, InterRent,
and Advantage (Marketwired 2013).
3.3.4 Car2go Europe
Daimler AG’s subsidiary, Car2go, was built in 2009 with the purpose of offering
new mobility solutions. Their pioneering city, Ulm, Germany become the start of a
new service Daimler offered: one-way carsharing. In the end of 2011 Daimler
partnered with Europcar to enhance expansion decision at faster growth rates
around Europe. With Europcar’s management fleet skills, Daimler taped an
interesting opportunity to expand with experienced help. Europcar also benefited
by offering new mobility services in their portfolio. They now hold a 25% share of
the joint venture and Daimler, the rest (Europcar Press 2011). This new partnership
was aimed at adapting to the incoming trend of carsharing in urban cities (Europcar
Activity Report 2012). It started in April 2009, offering only “two-seater Smarts
with state-of-the-art telematics and an innovative solar roof” and since then have
expanded to many cities around Europe and the US (Europcar Activity Report
2012).
At the end of 2014 car2go announced that they had reached 1 million members
worldwide and have more than 12,000 vehicles for this service (Car2go AutoRental
2014).
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3.3.5 Europcar Business Model Canvas
Europcar is best known in Europe for its presence everywhere. They have a
different variety of services to complement any need a customer has. In the US,
although they are small have similar partners and focus of the same customer
segments. As seen in Figure 21, Europcar’s BMC is focused on offering the best
varied service to clients all over the world.
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Europcar Business Model Canvas: Europe + US, Europe
Customer
relationship
Key
Partners
- Partnership
with mayor
airlines and
hotels
- Railroad +
Cruise
partnerships
- Concession
agreements
with
airport
authorities
- With main
manufactures
(Mercedes,
Peugeot,
Fiat, Opel…)
- Credit card
partners
(Citibank,
HSBC)
-Cycling
Federation
-Circuit de
Catalunya
Key
Activities
- Rent a
car in
airports
and cities
- 24 hours
minimum
rental fee
Key
Resources
- Total of
10,000
locations
and more
than
186,000
vehicles
- Customer loyalty
programs
- Funway card
(discount and
Value proposition
Customer
services to
Segment
members)
- " Moving your
- Europcar Privalige
way"
- Individuals
- Car for traveling loyalty card (special
older than 25
offers)
various days,
years old and 1
- From car centric to
vacations in a
year minimum
customer centric
different city,
of driving
business meeting in - Promoter Score
license (21 years
(Survey after each
different cities
old acceptable
use)
- Brands:
pays extra fee)
Europcar,
- Corporates
Channels
InterRent, and
Advantage
- Television, radio Insurance/Repla
- Market position
cement for
and print advertising
- InterRent (low
several days
- Internet and
cost rent)
email marketing
- ToMyDoor
- Wireless mobile
- AutoLiberté
device applications
- Truck Rental
- Facebook and
- Chaffeur drive
twitter
service
Cost Structure
- Operating Costs
- Vehicle Depreciation
- SG&A
- Vehicle Interest
- Non-vehicle D&A
Revenue Streams
- vehicle rentals and licensee royalties
- sale and/or rental of optional ancillary products
and services
-Renting and Leasing
Figure 21: Europcar Business Model Canvas
Source: Eurazeo 2014
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3.3.6 Car2go Business Model Canvas
Car2go is mainly present in Europe. They offer a peculiar service that only has
Smart cars. They agile service in an aggregated value that Europcar did not offer
before. There are growing very fast in customer base and offer their service with no
monthly fees. Their prices include parking, fuel, insurance, maintenance and
cleaning. Car2go BMC in Figure 22 represents the innovative steps Europcar is
talking in mobility management.
Car2go Business Model Canvas: Europe + US
Key
Activities
- Car close by
when you need
it per minute
-One-way trip
- Marketing
- Operations
and fleet
management
Key
Partners
- Federal
agencies and
local
governments
- Public
transportation
Value
proposition
- "Smart
fortwo"
- Smarts for
one-way
carsharing
- No need
previous
reservation, no
membership
fees
Key
Resources
- Smarts >
9,000 (2013)
- Integrated
technology
platform
- On board
computers
- Smart cars
Customer
Segment
- 400,000
Customer
members
in
relationship:
2013
- Customer
loyalty programs - Individuals in
cities older than
- NO monthly
21 years old (19
fees
for campuses)
- People that
don't want to
Channels
own a car
- App, internet,
-Urban dwellers
sms, phone
- Facebook and
twitter
- Friend
recommendation
-Main customer
segment: 18-35
years old
- 60% Students
Revenue Streams
Cost Structure
-Vehicle costs: lease,
depreciation, parking, fuel, insurance…
- Member service, SGA
- Usage per minute and kilometre
Figure 22: Car2go Business Model Canvas
Source: Eurazeo 2014 & Gardiner2 2013
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3.3.7 Value Proposition: Europcar & Car2go
3.3.7.1 Europcar: Value Proposition
Europcar offers many kinds of vehicles for short and medium term corporate and
leisure rentals under their internationally recognized brand. The Europcar
network’s mix of stations (airport and non-airport stations), rental needs served
(corporate and leisure customers) and geographic diversity (domestically sourced
and internationally sourced rentals) provide Europcar with a broad customer base
that ranges from multinational corporations and tour operators to individuals.
They are the market leaders in Europe, with state of the art proprietary IT systems
(Europcar 2007). With this advancement in technology, they have been developing
new alternative services from traditional renting. For example, they offer a personal
on demand service AutoLiberté, which is a flexible reservation systems for
customers that can choose a variety of vehicles over a year in align with their
mobility needs and preferences, for an annual subscription. More than 4500 French
customers in 2012 used AutoLiberté (Europcar Activity Report 2012).
They also offer ToMyDoor, which was initially introduced for corporates. It
consists of a service where customers can pick up and drop off rented vehicles near
their homes, without having to go to a rental station.
These different kinds of possibilities combined with chauffer offering and truck
rental service, make Europcar a fleet manager with many kinds of solutions. They
are a brand that make their proposed values in the rental industries appreciated by
customers.
3.3.7.2 Car2go: Value Proposition
Carg2go’s novel proposition consists in offering its customers a fully flexible
mobility solution by having distributed around a city vehicles for point-to-point use
from and to any point as long as the vehicle is parked in a delimited perimeter.
There is a GPS-real time technology that permits customers know in real time where
the Smart is, its booking status, state of the vehicles (how clean it is) and filling
level of gasoline. All Smarts can be accessed with an RFID card or using a
smartphone without any monthly commitment to the carsharing company.
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Therefore, there are no fixed cost with car2go. The price includes gas, millage,
parking, taxes, insurance and maintenance.
The novelty and difference compared to round-trip carsharing of Car2Go’s business
model is that they offer “a free-floating carsharing service; that is, carsharing
without rental stations and/or fixed drop points” (Danish Business Authority 2012).
Member can pick up, on-demand, vehicles around delimited areas on streets using
their application or online, using a computer. In order to use the service, members
have to join paying a small fee, but with no monthly commitment. It is a pay-asyou-go service, calculated with a fee per minute and if parked in their areas, a fee
per parking time. Furthermore, they offer driving time for users that refuel the
vehicles (as opposed to other carsharing schemes that don’t offer this possibility)
(Danish Business Authority 2012).
Car2go’s vehicles sizes underpin the necessity of moving around a city with small
vehicles and facilitate finding parking spaces. This 24/7 services supported by two
giant (Europcar and Daimler), are growing fast in Europe, demonstrating the
potential demand there is for this type of carsharing.
3.3.8 Synergies: Europcar & Car2go
Car2go is managed by the rental company. Daimler partnered with Europcar to
benefit from their expertise in fleet management, as well as historical and strategical
logistics already created. The combination of a historical RAC company and new
carsharing service is an advantage for both sides. Europcar’s extensive rental
network will also provide outlets for registration, complementing the car2go
locations (Europcar Press 2011). Present CEO of Europcar, Roland Kepler,
remarked how Europcar sees “untapped possibilities arising from customers’
changing mobility needs and preferences. More and more people want to enjoy a
car without owning one” (Europcar Activity Report 2012). These new mobility
changes made Europcar become very interested in carsharing around Europe and
the US.
Since Europcar has partnered with Daimler, they have also changed their company
logo and message. In 2012, they changed Europcar’s message to “Moving your
way” which is focused on displaying customer’s preferences in terms of mobility
and on Europcar’s promise to respond to customer preferences by providing the
desired services. Moreover, Europcar’s carsharing service is aligned with their
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customer-centric corporate strategy. The new logo and the new change symbolizes
the company’s bet on mobility and accessibility (Europcar Activity Report 2012).
Commenting the strategic partnership between Europcar and Car2go, former
Europcar CEO Philippe Guillemot, said:
“Europcar has been anticipating changes in travelers’ needs and offering mobility
solutions for the past 60 years. With car2go, we are now expanding our offering to
provide urban residents with a new lifestyle service and mobility by the minute.
Through such innovations, we demonstrate our commitment to constantly
enhancing the customer experience, and answer all needs related to the car. This
explains why Europcar is the industry leader in Europe today” (Europcar Press
2011).
He also expressed how Europcar is convinced:
"We at Europcar are convinced that this launch marks the beginning of a new era
in urban mobility: an era of car mobility on demand. It combines the best of both
worlds: the freedom and comfort of a personal car and the benefits of public
transportation, on an ultra personal level. As people discover the simplicity and
convenience of this service, we see it becoming a very attractive lifestyle option for
them. We are essentially enabling this new lifestyle service and we see it as very
complementary to our car rental services" (Daimler Europcar 2010).
The partnership offers both companies (Europcar and Car2go) important
advantages. This new service is the perfect combination to close gaps in Europcar
mobility service and to innovate and adapt to current trends in the RAC industry.
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3.4 Hertz Global Holdings: Hertz & Hertz 24/7
3.4.1 Hertz US
Hertz’s history dates back to the early 1900’s, and in particular, 1918, when Walter
L. Jacobs, the pioneer of rental cars, opened a RAC business at the age of 22 in
Chicago. By 1923, Mr. Jacobs sold his company to the President of “The Yellow
Coach Manufacturing Company” (later named “Yellow Truck Manufacturing
Company”), John Hertz. At the time, that car rental business was called “Hertz
Drive-Ur-Self System”, and was bought by General Motors in 1926. By the 1930’s
the Hertz Company started to open offices in the Chicago Midway Airport. By late
1980’s, after the company changed owners and named The Hertz Corporation a
company formed by Ford Motor Company. In 1989 Hertz introduced an innovative
and famous Hertz Club Service, the “#1 Club Gold Service”, which became an
international know for begin a fast-service for customers; they could avoid
paperwork and waiting times when renting a vehicle. During the 1990’s, Hertz
launched its website and expanded to many regions around the globe. By the end
of the decade, Hertz became a public company (HRZ) listed in the New York Stock
Exchange (1997). Then, in 2005 Hertz was acquired by three large Private Equity
investment companies, “Clayton, Dubilier & Rice; The Carlyle Group and Merrill
Lynch Private Global Equity” (Hertz History1 2015) and Hertz’s brand operated
under Hertz Holding name. Finally, in 2013 Goldman Sachs and J.P. Morgan
bought Hertz Holding’s shares from the prior investment companies and became
the majority owners of the RAC company. Hertz Global Holdings, Inc. (the parent
company of all the brands) operates in brands through “Hertz, Dollar Rent A Car,
Thrifty Car Rental and Firefly brands” (Hertz AR 2013).
By 2013 Hertz’s sales accounted for $ 10,794 M (73% generated in the US) and
had 11,555 car rental locations all around the globe (5,874 in North America)
(Credit Suisse 2014 & Hertz AR 2013). In the US, 70% of its revenues came from
airport leisure and by 2013 they had a fleet of 628,025 vehicles worldwide (467,225
in North America, or about 74% of its fleet) (Credit Suisse 2014).
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Hertz's Revenues 2013 ( By Segments)
Other, 5%
WW Equipment Rental,
14%
US Car Rental,
59%
Intarnational Car
Rental, 22%
Figure 23: Hertz Revenue Segmentation 2013
Source: Hertz AR 2013
As seen in Figure 23, most of Hertz’s revenues came from the US car rental
division. Hertz is considered the second largest rental company, and the biggest
public one in the U.S.
3.4.2 Hertz 24/7 US
At the end of 2008, Hertz entered the hourly car rental market with a service called
“Connect by Hertz” and first started to operate in New York. By 2011 they changed
their carsharing service to “Hertz on Demand,” eliminated membership fees, cut
hourly rates, and expanded the types of vehicles available through the service to
compete against Zipcar and attract customers (Merrihew 2011). In 2013 they
equipped many of their previous vehicles with carsharing technology and changed
their carsharing company name to Hertz 24/7 (Business Travel 2013). In 2013 they
were available in the U.S., Canada and Europe. They are present in the U.S. in states
like California, New York, Ohio, Texas, New Jersey or Colorado and are present in
23 universities around the US in 18 states (Hertz Web 2014). Hertz has been
targeting universities as one of their main customer targets to growth during the
past years.
3.4.3 Hertz Europe
Although Hertz is mostly present in the U.S., it is a worldwide prestigious brand
found in many continents. In 1950 its first European location started in France and
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grew around other European countries (Hertz History2 2015). By early 1990’s
“Hertz #1 Club Gold” service was exported to Europe (Hertz History1 2015). Then
by late 1997, Dublin Ireland became Hertz Europe's Service Centre where
reservations where handled around many European countries.
In 2013, Europe accounted for about 14% of their total revenues, from which,
contrasting to the U.S. about 43% of their revenues comes from off-airport locations
and 57% form airport locations (in the US 70% on-airport) (Hertz AR 2013). In
Europe, Hertz is more diversified in between airport and non-airport locations.
3.4.4 Hertz 24/7 Europe
Hertz entered the European market soon, considering Europe as a continent with
high potential for carsharing programs to grow. They entered in London and in Paris
and since then have expanded to more cities. In Europe, as of 2014, they are present
in the Netherlands, Italy, UK, France, Spain, Germany, and Belgium. Although
Hertz in Europe is expanding, their service is still unknown and are struggling to
increase customer base.
3.4.5 Business Model Canvas Hertz
As one of the top rental companies in the world, Hertz has growing and expanding
since its origins. Its business model canvas, seen in Figure 24, represents the amount
of services and products that makes Hertz’s value proposition so strong. Supported
by strong partnership with mayor players around the world in different industries,
as well as a consistent revenue stream from renting activities, Hertz is a well
reputable brand.
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Hertz Business Model Canvas: Europe + US, Europe, US
Key
Partners
Customer
relationship
Value proposition
- Car for traveling
- Partnership
Key
various days, vacations
with mayor
Activities
in a different city,
airlines and
Rent
a
car
in
business meeting in
hotels
airports
and
different cities
- Railroad +
cities
24
- “Brand: Hertz Classic
Cruise
hours
• Hertz Rent2Buy—Car
partnerships
minimum
Sales
- Concession
rental
fee
•
Hertz
24/7
agreements with
- Airport
• Hertz Local Edition
airport
- Off- Airport
• Donlen
authorities
• Dollar Rent A Car
Key
-“AAA
• Thrifty Car Rental
Resources
• USAA
- GM, Nissa,
• Firefly
• Marriott
and Toyota top • Hertz Rent2Buy—Car
• Delta
OEM
Sales
• JetBlue
- Chrysler and
• Hertz 24/7
• United
Fords top
• Ace
• American
OEMs
• Dollar Rent A Car
Express
• Thrifty Car Rental
• Live Nation
NeverLost navi
• Firefly”
• Ryanair
gation system
• Flexicar (Melbourne
• ARC Europe
-628,025
Carsharing Service)
• Etihad Airways
vehicles
-Hertz Gold Plus
• American
worldwide
Rewards membership
Express
(467,225 in
program
• Disneyland
North America, -Mobile Gold Alerts
Paris
or about 74%
- Gold Choice
• Lufthansa”
of its fleet
- eReceipts
Cost Structure
- Operating Costs
- Vehicle Depreciation
- SG&A, Vehicle Interest, D&A
- Customer
loyalty
programs
-“Net
Promoter
Score (NPS):
measure and
further
improve
customer
satisfaction”
Customer
Segment
Individual
s older
than 25
years old
and 1 year
minimum
Channels of driving
license
- Television,
radio and
Corporate
print
s
advertising
- Internet
Insurance/
and
Replacem
email
ent for
marketing
several
- Wireless
days
mobile
device
applications
- Facebook
and twitter
Revenue Streams
- Renting, Leasing and Car Sales Program
- Commercial agreements, fleet
management
Figure 24: Hertz Business Model Canvas
Source: Hertz AR 2013
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3.4.6 Business Model Canvas Hertz 24/7
Hertz built a carsharing scheme that has been always associate with its brand name:
Hertz. Hertz 24/7 BMC portrayed in Figure 25, demonstrated how they have
innovated in many different component of their business model to introduce
carsharing. In order to compete against its main player, Zipcar, Hertz has offered
their service with no monthly commitment, point-to point services to some airport,
round-trip options and will install carsharing technology in all of their cars in order
for the customer to choose one service or the other.
Hertz 24/7 Business Model Canvas, Europe + US
Key
Activities
- Car close by when
you need it per hour
-Round-trip
- Sales and Marketing
(local events,
advertising,
sponsorships, public
relations, and social
Key
media activities)
Partners
-Operations and fleet
management
Universit
Key
ies
Resources
- Federal - Vehicles > 35,000
agencies
(2013)
and local
- Integrated
governm technology platform
ents
- On board computers
-2,500 locations
Value
proposition
- "Click.
Swipe. Go!"
- No fees or
membership
plans
- Ability for
point-to-point in
some stations
Cost Structure
-Vehicle costs: lease,
depreciation, parking, fuel, insurance,
maintenance….
- Member service, SGA
Customer
relationship
- Customer
loyalty
programs
- Community
of members
- Committed
to urban
sustainable
living
- Feedback
from members
Customer
Segment
- >200,000
members (2013)
- Individuals in
cities older than
19 years old and
1 year of driving
license
- Corporates and
Channels
Governments
- App,
- People that
internet, sms,
don't want to
phone
own a car
- Facebook
- People with a
and twitter
car in a city
Revenue Streams
- Usage fees
Figure 25: Hertz 24/7 Business Model Canvas
Source: Hertz AR 2013 & Hertz PR2 2013
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3.4.7 Value Proposition Hertz and Hertz 24/7
3.4.7.1 Hertz: Value Proposition
Hertz is a RAC company with many years of history and innovation that has led
them to offer many different services, giving increasing value to what they propose.
They offer vehicles from 24 hours, to weekly, monthly, and even yearly rates with
their leasing programs.
For example, they offer, “Gold Plus Rewards”, a point-to-point rental program to
rent a vehicle in one office and leave it in other Hertz office. Then they have a
national-scale luxury rental program called Prestige Collection, which gives
customers access to certain types of high end vehicles. Also, they have a sports car
rental program, Adrenaline Collection, which guarantee fast and sportive cars to
customers. They also have an “environmentally friendly” service called Green
Traveler Collection, which fits in to customers that have more concerns towards
environmental issues. They even have a high end rental program with elite sports
and luxury cars called Dream Cars (Hertz AR 2013).
Apart from renting a vehicles, Hertz also offers Donlen a leading provider of fleet
leasing and management services for corporate fleets (Hertz AR 2013). This brand,
a subsidary owned by Hertz, operates in the U.S. and in Canada and offer a solution
for companies that need a fleet for their employers during several months or years.
They also offer a unique equipment rental proposition. Called HERC,
Hertz Equipment Rental Corporation, it is “one of the largest equipment rental
companies in the United States and Canada combined” (Hertz AR 2013). According
to Hertz Annual Reports, “HERC rents a broad range of earthmoving equipment,
material handling equipment, aerial and electrical equipment, air compressors,
generators, pumps, small tools, compaction equipment and construction-related
trucks. HERC also derives revenues from the sale of new equipment and
consumables as well as through its Hertz Entertainment Services division, which
rents lighting and related aerial products used primarily in the U.S. entertainment
industry” (Hertz AR 2013).
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Hertz Global Holding offers a varied amount of services and propositions that make
renting a car an absolute experience for a user, with multiple options, from short to
long renting, and with many kinds of different resources.
3.4.7.1 Hertz 24/7: Value Proposition
Hertz’s carsharing segment has not seen an exponential growth in members,
compared to its main competitors, since it was first built. It entered the carsharing
industry with fierce competition from Zipcar and other carsharing schemes. In order
to differentiate themselves, they have built a carsharing system that differs from
other traditional carsharing schemes and have proposed a mixed value in carsharing
schemes. For example, Hertz does not charge any joining, membership or annual
fees. This means joining Hertz and becoming a member is completely free.
They are integrating their carsharing technology to many cars (future plan is to
integrate them all) and as of 2013, they had about 35,000 vehicles around the globe
that can be used with the same smartcard in any place, in one of their 2,500
locations: this offers flexibility to customers that travel and want to use the service
in different countries (Blanco 2013). Also, they offer carsharing vehicles for oneway (even to the airport) and round-trip services (depending on the city), and have
many different kinds of vehicles for customers to choose. A combination of both
services give more options to customer that would prefer one service or the other.
Customers are charged an hourly fee, including “fuel, insurance, 24/7 roadside
assistance, in-car customer service and an allowance to drive 180 miles per 24 hour
period” (Hertz AR 2013).
In order to value their carsharing scheme, Hertz has recently re-branded their
carsharing segment to Hertz 24/7 (Bachman 2013). According to their CEO and
Chairman, Mark P. Frissora, Hertz 24/7 is a fundamental service to create faster,
easier, and more valued experiences in renting for a customer (Hertz News 2013).
The Hertz brand is a worldwide aggregated value and the company knew they had
to play with this for their carsharing scheme.
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3.4.8 Synergies: Hertz & Hertz 24/7
Hertz 24/7 and Hertz is a natural combination that together make both services
extremely adaptable. “Hertz 24/7 is revolutionary because it combines technology
and on-demand service associated with carsharing” with the global operational and
fleet management skills that Hertz offers (Hertz News 2013). Hertz’s objective is
to combine their 24/7 technology service to all types of consumers, carsharing or
traditional rental car consumers. Creating Hertz 24/7 demonstrates Hertz
compromise towards sustainable mobility, making the traditional renting vehicles
viable to any kind of consumer (Hertz News 2013).
Hertz is applying a similar strategy as Avis, adapting their both services for different
times of demand. Although they are growing slow in member numbers, Hertz is
betting strong on carsharing. According to Bob Stuart, Hertz's senior vice president
of global sales and marketing, Herts is “going to introduce the future of car rental,"
he said (King 2013). Hertz's 24/7 program is aimed ultimately at turning 100% of
its car rental fleet into a vehicle that can be reserved on line and rented by the hour,
with minimal or no human interface (Morgan Stanley 2014).
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3.5 U-Haul Group: U-Haul & UHaul CarShare
3.5.1 U-Haul US
U-Haul is an American rental and storage company best kwon for its rental trucks
and vans to help families move boxes from one place in to another. In 1945 after
World-War II, U-Haul was established, when the need for do-it-yourself (DIY)
started to spread around the nation. Sam Shoen (a Navy veteran) and his wife were
two individuals that foresaw a new trend in the market and acted upon it (U-Haul
History 2014) by establishing U-Haul as a DIY company. DIY is a method of
building or fixing things without the aid of professional, and can be done using
someone else’s assets. The company was named “U-Haul Trailer Rental Company”
and by 1959 they rented trucks through an independent U-Haul dealer. By 1969 Mr.
Shoen incorporated American Family Corporation (AMERCO) as a holding
company, having U-Haul as the main operating company (Amerco History 2005).
Then in 1974 they started to open storage facilities and manage their own rental
trucks and trailers. U-Haul also sold “brand boxes, tape and other moving and selfstorage products” and services DIY customers at all of their distribution outlets and
through their “eMove web site” (Amerco AR 2014). In 1993 AMERCO went
public, trading in the New York Stock Exchange. The following year they began
trading in the NASDAQ (Amerco History 2005). Since then, U-Haul has become
one of the best known brands in North America. As a family owned business, they
have not expanded to Europe.
As of 2013, U-Haul has the largest fleet in the “DIY moving industry which
includes a fleet of trucks, trailers and towing devices” (Amerco AR 2014). As of
March 31, 2014, their rental fleet consisted of approximately “127,000 trucks and
98,000 trailers” and U-Haul’s revenues amounted to $ 2,371 M (Amerco AR 2014).
3.5.2 UHaul CarShare US
UHaul CarShare was founded in 2008 “to help reduce emissions and congestion”
in cities and targeted college campuses in cities like “Portland, Maine, and Salt Lake
City, Utah” (PRNewswire Uhaul 2011). U-Haul has not had an exponential growth
as other competitors, although as of 2013 they were present in 21 states, for
example, California, Colorado, Florida, or North Carolina (UHaul CarShare About
2013). Furthermore, they offer round-trip carsharing in 34 Universities around the
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states. U-Haul’s carsharing service is still growing in the US with perspective to
grow into new countries.
3.5.3 U-Haul Business Model Canvas
U-Haul, in total size, is the smallest company analysed in this research. However,
their truck rental services are the strongest competition in the truck division of the
main player’s truck rental programmes. U-Haul strong American culture as a
company (established by an American Veteran), as well as their capacity to
understand since the beginning the DIY American culture, have made this company
succeed in their specific industry. Many DIY customers really on U-Haul’s varied
truck rental programs and storage facilities. U-Haul’s business model canvas in
Figure 26 convey the DIY culture, but at the same time, the small size of the
company (less services and products –only offer trucks and vans to rent- than other
RAC companies) compared to the main players in the industry.
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U-Haul Business Model Canvas: US
Key
Activities
Key
Partners
- Rent a truck in
Value
cities - 24 hours proposition
minimum rental
fee
-Trucks and
DIY
philosophy
- Dealers
Key
Resources
-23,800
employees
Cost Structure
- Operating Costs
- Vehicle Depreciation
- SG&A
- Vehicle Interest
- Non-vehicle D&A
Customer
relationship
Customer
Segment
-“do-it-yourself”
household
movers
-individuals and
Channels
families, college
students,
- web based advertising,
print and yellow pages vacationers and
sports
-trade events,
enthusiasts
movie cameos of our
rental fleet and boxes, -16 years old for
trailers
and industry and
-18 years old for
consumer
trucks
communications
- online reservation and
sales system
- Customer loyalty
programs
Revenue Streams
- U-Haul rental truck services
-U-Haul storage capacities
-Accessories for the DIY industry (tapes,boxes…)
Figure 26: U-Haul Business Model Canvas
Source: Amerco AR 2014
A particular different of U-Haul is the minimum age requirements that they have in
order to rent a truck or trailer. It is one of the few companies that rent trailers to 16
year old clients and trucks to 18 year old clients. They try to attract customer from
very young ages and retain them through different customer loyalty programs. The
other rental car companies have a minimum age set of 21 and customer form 21 to
25 have to pay an extra daily fee for rental activities. Although it is a risky way of
opening customer base (younger clients tend to have more accidents), U-Haul has
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to find a way to differentiate themselves compared to the other big players. They
use a similar strategy in their carsharing services.
3.5.4 UHaul CarShare Business Model Canvas
As a compliment to the DIY philosophy and to expand into new potentially
interesting markets, U-Haul offers UHaul CarShare. Their BMC, Figure 27, is
simpler than others due to their smaller size. A way to open retain customers since
they are young is by offering the service to any king of customer (not only
university students) that are 18 years old. UHaul CarShare has played with this
strategic methods to gain customers in a different, riskier way. Their initial strategy
was targeting university students and saw a link in between students that needed a
vehicle for short amounts of time and students that needed to move from one house
into another.
UHaul CarShare Business Model Canvas: US
Key
Activities
- Vehicles
per hour
-Round-trip
Key
Key
Resources
Partners
- Present in
Universities 21 states
Value
proposition:
- “Log in & go!”
- "the division of
use and
specialization of
ownership"
Customer
relationship:
- Engage
university
students in the
loyalty programs
Channels
- App, internet,
sms, phone
- Facebook and
twitter
Customer
Segment:
- Individuals in
cities older than 18
years old with 2
years of driving
experience
Revenue Streams
- Usage fees
Cost Structure
-Vehicle costs (operating costs)
- SGA
Figure 27: UHaul CarShare Business Model Canvas
Source: Amerco AR 2014
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U-Haul’s other strategies to attract and retain customers are by not charging any
registration fee or having no monthly commitment. Their offer a pay-as-you-go
service with no other types of charges than the time and mileage covered.
3.5.5 Value Proposition: U-Haul and UHaul CarShare
3.5.5.1 U-Haul: Value Proposition
U-Haul is mostly characterized by its company culture. Its American value and
services convey a strong value proposition that stands out in the DIY market. They
lead the DIY market in the US and their brand and history gives them a reputation
that customers value. Although they only have trucks and vans (or trailers) to move
things, inside this small range of vehicles, they have many different services that
give value to U-Haul.
For example, “U-Haul has one of North America’s largest propane refilling
networks, with over 1,085 locations providing this convenient service. They refill
all propane cylinders and alternative fuel vehicles. Their network of propane
dispensing locations is one of the largest automobile alternative refuelling networks
in North America” (Amerco AR 2014). They also manage business that deals with
self-storage capacities: it became “a natural outgrowth of their self-moving
operations”. Household and other customers that need an extra space to leave any
type of materials or goods can rely on U-Haul’s strategically located storage units.
(Amerco AR 2014). Furthermore, as an addition to their storage capacities, they
offer U-Box, “a moving and storage pod that is delivered where the customer
chooses and once filled, can be sent to a destination that the customer desires”
(Amerco AR 2014).
Although these extra service are not directly related with renting vehicles, they are
services that are relating with sharing, renting assets, and with their truck rental
programs. They are small services that surrounds customer needs in the DIY
industry. In line with these renting and sharing service is their innovative business,
UHaul CarShare.
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3.5.5.2 UHaul CarShare: Value Proposition
UHaul CarShare offer a 24/7 access on an hourly or daily basis of compact vehicles,
electric-gasoline hybrids, sedans, SUVs and trucks. Although they are not as strong
as other competitors (only present in the US), they propose values generating an
increase in customer base. They have a flexible rate structure with not fixed costs
with a different methods. They rates start with a lower price per hour compared to
other competitors (with an initial fee per kilometre). The payment systems has an
automatic way of switching to a new price if the second type of price they offer is
cheaper. For example, as they state in PRNewsWire, “UHaul CarShare sets the bar
in carsharing for the most cost-effective way to drive green. The flexible rate plan
starts each reservation out at $4.95 per hour (plus $0.59 per mile) then automatically
switches over to the flat hourly rate of $8-$12 that includes 180 miles free” if the
time a mileage driven is more expensive. (PRNewswire Uhaul 2011). This gives
UHaul CarShare’s customers competitive initial rate compared to other companies.
Also, if a client wants different rates, some can have a monthly fee with lower fees
per use (PRNewswire Uhaul 2011). This dynamic pricing aggregates value to UHaul’s carsharing business.
Carsharing is not the strongest service that U-Haul offers different types of services
give value to customers in the DIY industry.
3.5.6 Synergies: U-Haul and UHaul CarShare
Although it may look like U-Haul’s renting service is completely independent from
their carsharing segment (they have completely different vehicles), the carsharing
scheme is a natural extension of the company’s core values. They represent a
company that takes care of the environment and helps the client in different ways,
and adding carsharing to their fleet is the perfect combination (Amerco AR 2014).
In order for customers to appreciate the value of their carsharing unit, U-Haul
changed their initial carsharing segment name from U Car Share to UHaul
CarShare. Similar to U-Haul, Hertz and Enterprise have done the same change.
UHaul CarShare’s program manager, Cassandra Allen, explained how “U-Haul has
been in the truck-sharing business since 1945, so the UHaul CarShare component
is a perfect fit to our model of excellent service and reliability. We look forward to
the added visibility this will give us, and the reassurance it will give our members,
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knowing that they have the entire U-Haul network supporting them” (PRNewswire
Uhaul 2011).
Considering cost efficiency, there is not a clear understating yet of how carsharing
could help their company reduce costs in fleet management, due to the difference
in nature of both product (Trucks vs cars). Nonetheless, with a bigger carsharing
fleet managed, combining trucks and vehicles for different demanding times could
be an opportunity to optimize their fleet utilization. Although cost reduction is still
unclear, U-Haul’s company values are completely aligned with both services.
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3.6 Enterprise Holdings: Enterprise and Enterprise CarShare
3.6.1 Enterprise US
Enterprise is a successful RAC company that was able to compete against the
biggest players in an industry hard to dominate. Enterprise tapped into the market
years after Avis and Hertz consolidated as dominant players. Going back to 1957,
Enterprise’s first brand name was ‘Executive Leasing’ (Enterprise History 2013).
Jack Taylor, Enterprise’s founder, saw an opportunity thinking that customers
would see as an advantage leasing instead of buying a vehicle. By the 1960’s
Enterprise’s name was changed in honour to “the USS Enterprise aircraft carrier in
which the founder had served during World War II” (Enterprise History 2013). By
1962 the company’s customers demanded vehicles when their own personal vehicle
was being fixed. This strategy, using Enterprise’s vehicles as replacement vehicles,
shaped the company’s success and started to open offices close to where inhabitants
worked or lived. They created an innovative disrupting services called “we’ll pick
you up” (Berry, Shankar, Parish, Cadwallader & Winter 2006), which was
introduced in 1974 (Enterprise History 2013). During the 1980s and 1990’s
Enterprise grew around the US (rebranded Enterprise Rent-A-Car) and also entered
Europe. Then, during the financial crisis Enterprise gained market share by
acquiring in 2007 Vanguard, which operated under the “Alamo Rent A Car and
National Car Rental brands in North America” (PRNewswire Enterprise 2014).
Today, about 90% of the US population live within a 15-mile radius of an Enterprise
office (Berry, Shankar, Parish, Cadwallader & Winter 2006 & EH 2014). As of
2013 Enterprise has 979,370 vehicles with 6,045 locations in the US, and had
revenues that amounted to $ 11,900 M (total Annual Revenue accounted for $
17.8bn) (Auto Rental News Enterprise 2013 & EH 2014). It has become the largest
rental company in the U.S. with a 49% market share and is still held by private
owners, most of them still from the founding family (King 2013).
3.6.2 Enterprise CarShare US
In 2005, Enterprise entered the carsharing market under Enterprise’s Rent-A-Car
brand. By 2007 they evolved into a larger carsharing fleet with the name of WeCar
by Enterprise. They were initially focused on university and corporate campuses,
reaching to clients like Google in California, and Washington University in Saint
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Louis (Brown 2012). From then on, they began to acquire smaller carsharing
companies to gain market share and compete against their main competitors. In
2011 the company acquired PhillyCarShare (PCS), a Philadelphia based
organization and in June 2012 Enterprise bought “Mint Cars-On-Demand”,
including 8,000 members from New York and Boston. Enterprise then merged Mint
with its existing WeCar and PhillyCarShare units to create Enterprise CarShare
(King 2013). One year later in May 2013, the RAC company acquired IGO, a nonprofit local car-sharing service established in Chicago.
Through various acquisitions and own carsharing organization, Enterprise
CarShare’s vehicles are now available at “75 college campuses, 40 government and
business campuses and about 20 urban markets” (Falk 2014). They are available in
35 U.S. states with perspectives to grow in the European market (Enterprise
CarShare History 2014). In 2013 Enterprise CarShare had an estimated 60,000
members with about 1000 vehicles (Brown 2014).
3.6.3 Enterprise Europe
Enterprise entered the European with strong competitors already settled in the
market, during the mid-1990s and has tried to compete again the biggest players in
the European market. During 1994 they launched their first European branch in
Reading, UK. Then, thye opened offices in 1997 in Ireland and Germany. By 2012,
Enterprise expanded operations into France and Spain with the acquisition of
National-Citer (Leader in France and Spain), which owned Citer SA and its
subsidiary Atesa, from PSA Peugeot Citroën (Enterprise History 2013). Enterprise
described how they are not entirely satisfied by its acquisition of Citer and Atesa;
they wish to use these companies as a foundation for its ambitious expansion plan
that will allow them to further penetrate into the market (Happening Enterprise
2013). Through this acquisition, Enterprise in Europe is now known as Enterprise
Atesa.
3.6.4 Enterprise CarShare Europe
Enterprise has yet to enter the European market, amid it is the next market it is
aiming at.
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3.6.5 Enterprise Business Model Canvas
Enterprise is the biggest rental company in the world, with many different services
and loyalty programs to engage customers to use their products. In the US and
Europe, they are highly present and have been historically recognized for offering
a great service and even more, a great customer service. Their BMC in Figure 28
covers their general services and products that have made them the biggest player
in the market.
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Enterprise Business Model Canvas: Europe + US, US
Customer
relationship
Key
Activities
Key
Partners
- Rent a car in
airports and cities
- 24 hours
minimum rental
fee
- Airport
- Off- Airport
rental and leasing
-Long term rentals
Value
proposition
- Customer loyalty
programs
- Award winning
customer service
Customer
Segment
- Car for
Individuals
traveling
- Drive
Partnership
various days, Alliance partnership older than
with mayor
25 years old
vacations in a
+ Enterprise Plus
airlines and
and 1 year
different city,
(members win
hotels
minimum of
business
points)
- Railroad +
driving
meeting in
Cruise
license
different cities
partnerships
- Corporates
- Ridematching,
Channels
Concession
Insurance/R
vanpooling
Key
agreements
services, car
- Television, radio eplacement
Resources:
with
- Vehicles >
sales, exotic car and print advertising for several
airport
days
-Presence in 63
rental,
- Internet and
authorities
countries
motorcycle
email marketing
- >83,000
rental and
- Wireless mobile
employees
commercial
device applications
->1.5 million cars
truck rental.
- Facebook and
and trucks
-Zimride
twitter
-979,370 vehicles
-Rideshare
sources and
-6,045 locations
tour reservations.
Cost Structure
Revenue Streams
- Operating Costs
- Vehicle Depreciation
- SG&A, Vehicle Interest
- Non-vehicle D&A
- Rental, Leasing and fleet
management
- Vehicle sales
Figure 28: Enterprise Business Model Canvas
Source: Auto Rental News Enterprise 2013 & EH 2014
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3.6.6 Enterprise CarShare Business Model Canvas
Backed by Enterprise, the neighbourhood car rental company, their carsharing
program offers a fleet management expert. Although they are still young in the
carsharing market, as their BMC portrays in Figure 29, using their fleet can
guarantee having solutions for any situation.
Enterprise CarShare Business Model Canvas: Europe + US
Value
proposition
Key
Activities
- Car close by when you
need it per hour
-Round-trip
- “Reserve.
Unlock and
Go.
Return.”
Convenient
locations
Key
Partne
Key
rs
Resources
Univers
- Vehicles > 1,000
ities
(2013)
- Integrated technology
Federal
platform
agencie - On board computers
s and
- Hybrids, Electric
local Vehicles, Trucks…(Ford
govern Fiesta Sedan, Hatchback,
ments
Volkswagen Golf,
Hyundai Accent..)
Customer
relationship
Customer
Segment
- Customer loyalty
programs
- Community of
Individuals
members
in cities
- Committed to urban
older than
sustainable living
21 years old
- Feedback from
(18-20 if in
members
university)
- Corporates
and
Government
s
- People that
Channels
don't want
- App, internet, sms, to own a car
- People
phone
- Facebook and twitter with a car in
a city
- Google+
-60000
members
(2013)
Revenue Streams
Cost Structure
-Vehicle costs (operating)
- Member service, SGA
- Usage, membership, signup fee
Figure 29: Enterprise CarShare Business Model Canvas Source: Auto Rental News Enterprise 2013 & EH 2014
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3.6.7 Value Proposition: Enterprise & Enterprise CarShare
3.6.7.1 Enterprise: Value Proposition
Enterprise is the largest company in the rental market. They have an extensive car
and truck rental fleet, as well as services that offer corporate fleet management, and
second had car sales (PRNewswire Enterprise 2014). Their brand is associated with
quality in customer service and fleet capacity: anywhere around the world
Enterprise offers solutions to clients with different needs. The products and services
(value proposition) that Enterprise offers are varied.
For instance, they have Enterprise Rideshare, specialized in giving personalised
“vanpool programs and commuter services” for any type of customer, individuals
or business (Enterprise Ride Share 2013). This service founded in 1994 and has
become the American leader in servicing both “individual vanpool groups and large
employer work sites” (Enterprise Ride Share 2013).
They also offer Zimride, a carpooling solution for university and corporate
networks. Zimride it is a service specialized in uniting friends or people that share
the same destination. Blablacar, one of the leaders in these types of services, is well
known around Europe. (Zimride About 2013).
Enterprise also offers different brands that support their brand value. National and
Alamo, for example, are Enterprise’s brands. Furthermore, they offer exotic
vehicles in thier “Exotic Car Collection” division or commercial trucks to broaden
their services and products.
3.6.7.2 Enterprise CarShare: Value Proposition
Enterprise CarShare offer a round-trip carsharing program around North America.
Its strongest value at the moment is the recognition of their service with a wellknown brand, Enterprise. Their carsharing rates include fuel, maintenance, parking,
insurance and fuel, but offer their service with a membership fee.
With more than 1000 vehicles in 21 States, Enterprise is growing with perspective
to tap into new markets and strengthen their carsharing service.
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3.6.8 Synergies: Enterprise & Enterprise CarShare
Round-trip carsharing and Enterprise’s traditional renting company is the perfect
combination to close the gap of services and to maximize vehicle fleet utilization.
The combination of carsharing and RAC strategy is aligned with Enterprises
strategies. Jim Burrell, Vice-President of Enterprise in Europe sates how the
company’s “economic model is based on our geographic proximity to [their]
clients. Hence, all of [Enterprise’s] existing locations will be maintained and
[Enterprise] plan[s] to open additional ones. [Enterprise’s] approach is to give the
rental locations their independence by giving them access to all the necessary tools
and methods to best serve their customers. [Enterprise’s] employees are our first
strategic levers of growth. Because for our customers, the brand and its attributes
make a difference” (Happening Enterprise 2013). Carsharing requires proximity to
clients and Enterprise is an expert company in those situations.
Other managers like Enterprise’s VP Ryan Johnson (responsible for the company's
carsharing operations) state how the combination is a natural extension of their
business (Brown 2012). Moreover, the company sees an opportunity using
carsharing technology: the system allows members to use a service that can be
100% autonomous. Enterprise could develop this technology throughout their 1.2
million cars and trucks (Brown 2012). Johnson states how they will “look at using
the technology to automate and enhance the rental transaction business in the
traditional rental business” (Brown 2012). Carsharing technology allows for a more
customized controlled of fleet management, accurately measuring gas and millage
and usage for optimizing fleets (Brown 2012).
Enterprise is still young in the carsharing market, but they take for granted that
combining carsharing and traditional rental cars will maximize their fleet usage and
reduce cost in management (Brown 2012). As other rental companies like Hertz,
Enterprise is an established and well-known car rental brand, and changed their
carsharing service’s name from “WeCar by Enterprise” to “Enterprise CarShare” to
use their brand name, as a way to convey their successful brand to customers.
Enterprise believes in the future of carsharing and are using carsharing to enhance
customer experience and broaden their rental services to cover any type of need.
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3.7 Main Players – Quantitative Comparison
The main RAC players have grown to consolidate themselves in the rental market.
In their carsharing services, they are still growing fast to gain market share and
enhance their carsharing schemes. To understand their different sizes, Figure 30
and Figure 31 portray a quantitative comparison between each company.
3.7.1 RAC Companies
RAC Companies Worldwide Revenues + Vehicles (2013)
20,0
1600
17,8
Revenues ($ bn)
1200
10,8
12,0
4,0
800
7,9
8,0
1000
600
2,4
400
2,6
2,2
Vehicles (thousands)
1400
16,0
200
0,0
0
Uhaul
Enterprise
Avis
Budget
Sixt
Europcar
Hertz
Revenues ($ bn)
Vehicles (thousands)
Figure 30: RAC Companies Worldwide Revenues + Vehicles (2013)
Figure 30 portrays the RAC company’s worldwide revenues and vehicle fleet. As
reviewed in the BMC, Enterprise is the largest rental company alive in revenues
and fleet size. Then, Hertz and finally, Avis. On the other hand, regarding their
carsharing schemes, market share differs.
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3.7.2 Carsharing Companies
1000
Carsharing Companies WorldWide Members + Vehicles
(2013)
40
Members (thousands)
30
25
600
20
400
15
10
200
Vehicles (thousands)
35
800
5
0
0
Zipcar
Hertz 24/7 DriveNow
Car2go
Enterprise
Entr
CarShare
CarShare
Members (thousands)
Vehicles (thousands)
*(UHaul CarShare – NA)
Figure 31: Carsharing Companies WorldWide Members + Vehicles (2013)
Due to the relative early stage of carsharing companies (in general) and their
revenue sizes compared to RAC companies, market shares are measured in
members and fleet size. Also, membership is the key to success in carsharing
companies and make it one of the most important indicators in a carsharing
company’s success. In Figure 31, and as reviewed through the different BMC, in
2013, Zipcar was the dominant player in members by a considerable amount. On
the other hand, Hertz has started to integrate their 24/7 technology to many of its
vehicles and are expanding fast in fleet size. Also, another important indicator in
carsharing success is the price it offers to its customers: a very low price will
generate constant loses in the company, but a high price will scare customers away.
In the next section, a cost analysis will be done to understand which carsharing
companies offer the best prices.
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Chapter 4. Pricing Analysis: Carsharing Schemes
4.1 Cost Analysis Carsharing Schemes with Different Players
The main success of carsharing companies relies on their ability to retain and gain
customers. Membership is crucial because once a customer starts to use the service
and likes it, a loyal customer can be there for a lifetime. One of the main ways to
attract customers is through price differentiation. Carsharing is very competitive,
with increasingly companies entering the market. The main RAC companies
understand this competitive nature, and are offering different price schemes to gain
membership base.
In order to understand the nature of the prices that will be studied in the carsharing
schemes, an average customer profile will be defined. According to Frost &
Sullivan, the main customer carsharing profile of members are:
 Gender: Male (60%)
 Average age group: Mid 30’s
 University graduate or advanced degree (60%)
RAC industry is a very competitive market where prices is one of the key
determinations for clients to use one service or the other. The same happens with
carsharing schemes, although in this case convenience also plays an important role
in customer decision to choose one brand or the other. Since most of the big players
in the RAC are still in initial phases in their carsharing fleets, except AVIS which
has an experienced carsharing fleet, most will struggle to decide which prices will
they have to offer to compete against other players and to obtain as many members
as possible. A cost analysis will be done to understand which carsharing program
is more economical than the others and will see how their prices vary compared to
other modes of transportation.
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4.2 Price Analysis Europe
In Europe, the main players that offer carsharing services are:
Carsharing
Provider
Zipcar (AVIS)
Membership
Fee
Yes
Monthly
Fee
Yes
Hertz 24/7 (Hertz)
DriveNow (Sixt)
No
Yes
No
No
Car2go (Europcar) Yes
No
Other
*Monthly and membership fees not included in
studied price scheme
*Membership fee not included in studied price
scheme
* Charge an extra price (park/min) if members
park vehicles during their reservation. Not
included in prices as it is a very particular case.
*Membership fee not included in studied price
scheme
* Charge an extra price (park/min) if members
park vehicles during their
reservation. Not
included in prices as it is a very particular case.
Table 4: Main Players Carsharing
Source: Company Website
Three different cases will be:
 1 hour use
 4 hour use
 10 hour use
*In appendix 1 Tables are provided to give a more detailed analysis of each
carsharing price in distance and time.
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4.2.1 Case 1: 1 HOUR USE – Europe
Price
Cost Comparison - 1 hour use
80
70
60
50
40
30
20
10
0
€
€
€
€
€
€
€
€
€
0
5
10
15
20
25
30
60
100
150
200
Distance (km)
ZIPCAR
HERTZ 24/7
DRIVE NOW
Figure 32: Prices 1 hour use Europe Carsharing
CAR2GO
Source: Company website
In a 1 hour use scenario, point-to-point services are much more expensive than
regular round-trip carsharing like Hertz 24/7 and Zipcar. Furthermore, it can be seen
how the main carsharing players in Europe have similar price offering: constant
price per hour with some kilometres included in each reservation. After 30 km,
Car2go’s price rise to point where no customer would offer their service. In Figure
32, with 1 hour use, Zipcar’s prices are the most economical approach.
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4.2.2 Case 2: 4 HOUR USE – Europe
Cost Comparison - 4 hour use
140 €
120 €
Price
100 €
80 €
60 €
40 €
20 €
0 €
0
5
10
15
20
25
30
60
100
150
200
Distance (km)
ZIPCAR
HERTZ 24/7
DRIVE NOW
Figure 33: Prices 4 hour use Europe Carsharing
CAR2GO
Source: Company Website
In a four hour use of carsharing, point-to-point proves to be very expensive. Only
parking convenience (leaving vehicle in another spot), would help choose those
schemes. Hertz prices start to differ compared to the most economical choice,
Zipcar.
4.2.3 Case 3: 10 HOUR USE – Europe
Cost Comparison - 10 hour use
140 €
120 €
Price
100 €
80 €
60 €
40 €
20 €
0 €
0
5
10
15
20
25
30
60
100
150
200
Distance (km)
ZIPCAR
HERTZ 24/7
DRIVE NOW
Figure 33: Prices 10 hour use Europe Carsharing
CAR2GO
Source: Company Website
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Interestingly, Car2go offers a price per day which after 5 hours of use, reaches its
maximum price, which make their price competitive for longer hours, but only for
a low amount of kilometres (<30 km).
Conclusions of three cases in Europe:
 DriveNow is the most expensive program.
 Zipcar, in general terms, is the most economic choice, but has a monthly
fee.
 Carsharing programs with signup and monthly fees are cheaper per use than
carsharing companies with no monthly commitment.
 Car2go and DriveNow (point-to-point) better for <1 hour use (taxi
competitors) (see appendix 2 for price details)
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4.3 Price Analysis US
In the US, the main players that offer carsharing services are:
Carsharing
Provider
Zipcar (AVIS)
Membership Monthly
Fee
Fee
Yes
Yes
Hertz 24/7 (Hertz)
DriveNow (Sixt)
No
Yes
No
No
Car2go (Europcar)
Yes
No
*Membership fee not included in studied
price scheme
* Charge an extra price (park/min) if
members park vehicles during their
reservation. Not included in prices as it is
a very particular case.
Yes
*Monthly and membership fees not
included in studied price scheme
No
*Membership fee not included in studied
price scheme
Enterprise
Yes
CarShare
(Enterprise)
UHaul
CarShare Yes
(U-Haul)
Table5: Main Players Carsharing
Other
*Monthly and membership fees not
included in studied price scheme
*Membership fee not included in studied
price scheme
* Charge an extra price (park/min) if
members park vehicles during their
reservation. Not included in prices as it is
a very particular case.
Source: Company Website
Three different cases will be:
 1 hour use
 4 hour use
 10 hour use
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*In appendix 1 Tables are provided to give a more detailed analysis of each
carsharing price in distance and time.
4.3.1 Case 1: 1 HOUR USE – US
Price
Cost Comparison - 1 hour use
25
20
15
10
5
0
$
$
$
$
$
$
0
5
10
15
20 25 30
Distance (km)
60
100 150 200
ZIPCAR
HERTZ 24/7
DRIVE NOW
CAR2GO
Enterpirse CarShare
UHaulCarshare
Figure 35: Prices 1 hour use US Carsharing
Source: Company Website
In the US, the economics vary in a similar way to that of Europe. Zipcar still
maintains is dominance of low price per use. In one hour uses, Enterprise CarShare
and Zipcar have a very similar price. Hertz in the US is slightly more expensive
than Zipcar. Then, Car2go and DriveNow once again demonstrate that hourly
rentals are still very expensive compare to the other competitors. Finally, UHaul
CarShare has a notable interesting difference: dynamic pricing. If offer the best
price for customers, although they are still present in a few places around the US.
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4.3.2 Case 2: 4 HOUR USE – US
Cost Comparison - 4 hour use
Price
150 $
100 $
50 $
0 $
0
5
10
15
20 25 30 60 100 150 200 400
Distance (km)
ZIPCAR
HERTZ 24/7
DRIVE NOW
CAR2GO
Enterpirse CarShare
UHaulCarshare
Figure 36: Prices 4 hour use US Carsharing
Source: Company Website
In a four house use scenario, prices start to tighten up in several carsharing schemes.
In point-to-point carsharing, prices are unsustainable and Zipcar and Enterprise,
along with UHaul CarShare offer the best deals for 4 hour uses.
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4.3.3 Case 3: 10 HOUR USE – US
Cost Comparison - 10 hour use
200 $
Price
150 $
100 $
50 $
0 $
0
5
10
15
20 25 30 60 100 150 200 400
Distance (km)
ZIPCAR
HERTZ 24/7
DRIVE NOW
CAR2GO
Enterpirse CarShare
UHaulCarshare
Figure 37: Prices 10 hour use US Carsharing
Source: Company Website
Prices are very alike in 10 hour uses for all carsharing schemes except for that of
UHaul CarShare. At higher prices (which resemble their prices per day), all
companies offer very similar solutions. UHaul CarShare dynamic pricing is an
advantage that should be used to attract customers.
Conclusions of three cases in the US:
 DriveNow is the most expensive program.
 Zipcar, in general terms, is the most economic choice, but has a monthly
fee.
 Carsharing programs with signup and monthly fees are cheaper per use than
carsharing companies with no monthly commitment.
 UHaul Carsharing, only ones that operate with dynamic pricing model.
 Car2go and DriveNow (point-to-point) are better for <1 hour use (taxi
competitors) (see appendix 2 for price details)
The main RAC players mostly use a similar pricing method where they include
some kilometres in their hourly prices, although each main payer has their particular
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way of differentiating themselves. Nonetheless, carsharing vehicles, at the end of
the day, are renting vehicles. Analysts and rental companies have always considered
to which point is carsharing a threat to rental car industries. For this reason, an
analysis of how much of a threat is carsharing to rental car companies will be done.
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Chapter 5.
Carsharing
Threats
and
Opportunities:
RAC
vs
5.1 Is Carsharing a Threat To Rent-A-Car Industry?
Carsharing is becoming one of the next steps towards innovation in mobility and is
changing lifestyle inside the cities. It affects the industries related with vehicles, as
automakers or RAC companies. It is changing the ways vehicles are sold, rented,
and leased and there are growing debates towards how disruptive it can be.
Carsharing, considering its product life cycle, is in its growth phase without really
knowing how steep the curve will get (Rink & Swan 1979). Carsharing’s main
target focus may be the answer to how much of a threat it is to RAC companies: it
was introduced to replace the hazards of the personal vehicle, not the same as
traditional rental vehicles.
According to various research studies regarding mobility in the U.S., carsharing
accounted for 0.03% of the US urban population and licensed drivers miles covered
(Millard-Ball, Murray, Schure, Fox & Burkhardt, 2005) and according to Morgan
Stanley, it is estimated that carsharing will account for between 0.2-0.3% of all light
vehicle miles travelled on US roads by 2016, very niche but still large enough to
allow a viable business (Morgan Stanley 2012). Considering these numbers,
carsharing is still a niche product in the industry, although its technology and
service behind it will define the future of vehicle renting. That is why, and as The
New York Times states, “instead of letting the popularity of car-sharing disrupt
their business, they are joining in, and even taking the lead, with their own new
ventures in the hopes of holding onto existing customers and connecting with future
ones” (Gardiner 2013).
Furthermore, considering the impact in sales that carsharing has in the rental
industry, there is no threat to be concerned about. For example, Zipcar’s sales
amounted to only 3% of the total sales of Avis in 2013. As reviewed in the section
of synergies, carsharing is becoming a necessary service to have, and not a threat,
to broaden services. The only considerable threat that carsharing could have on
rental companies is the fact that they require fast, adaptable changing companies to
operate and meet consumer demand (Morgan Stanley 2013). Nonetheless, they are
completely complementary services, and as seen in Table 6, they both form a
strategical operational base. The synergies produced will reduce fleet and
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management cost in both types of services and the technology in carsharing will be
able to fit into traditional rental cars perfectly.
The biggest risks that RAC companies will have to face regard changes in the
market driven by factors outside of their control, with the threat of making their
services incrementally obsolete (Morgan Stanley 2012). Increasingly, the
sustainability of the car rental oligopoly should not be taken for granted (Morgan
Stanley 2012). It will depend on how the RAC companies can adapt to future trends.
RAC companies don’t want to stay behind in the future trends and are innovating
their business models to do so. Implementing carsharing is not only not a threat for
them, but the perfect way to close the gap of mobility services they can offer. Many
CEO’s in RAC companies and carsharing companies agree on how carsharing is a
natural complementary service that RAC companies need (Gardiner 2013).
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Rent-A-Car and Carsharing, Complementary Services
Carsharing
Basic Proposition Alternative to car
ownership for people who don’t use
cars often
Car Rental
Cars for business trips,
vacations or
insurance replacement
Customers
Urban dwellers and commuters;
campus
Business and leisure
travellers; owners getting
their cars repaired
Usage Model
Membership / community based
Transactional
Car Locations
Dispersed throughout urban centres,
neighbourhoods and campuses
Airport locations and
other geographic hubs
Access to
Vehicles
Online, mobile apps; car doors
opened using
smartcards or smartphones; 24/7
Traditional retail model –
branded airport
counters / contracts
Pricing
All-inclusive pricing with insurance
and gas
included (pay per time with
normally some kilometres included)
Gas and insurance options
upsold separately
Value
Proposition
By the hour or by the day; majority
Reservation
of reservations are hourly
Duration
” Table 6. Rent-A-Car and Carsharing, Complementary
By the day, multi-day or
week
Services Source: Avis Inv 2013
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Chapter 6. Future of Mobility: Perspectives and Trends
6.1 Future Perspectives Carsharing Market
RAC companies are betting on carsharing, although they still are a very small
percentage of their total sales. Nonetheless, according to Frost and Sullivan’s
report, the carsharing industry is expected to grow at exponential rates.
Members (Millions)
35
450
400
350
300
250
200
150
100
50
0
30
25
20
15
10
5
0
2010
2012
2014E
2016E
Members
2018E
Vehicles (Thousands)
Worldwide Carsharing (Members & Vehicles) 2010-2020
2020E
Vehicles
Figure 38: Future of Carsharing Members and Vehicles
Source: Frost & Sullivan 2010
By 2020 it is in expect that Europe will have about 200,000 vehicles in carsharing
schemes operating in a $ 7 bn market (Frost&Sullivan 2010). Worldwide, it is
expected for carsharing to grow up to 32 million subscriptions with more than
200,000 vehicles.
RAC businesses are shifting toward a trend in new technology that revolves around
carsharing schemes. Gradually, carsharing technology will shift toward traditional
renting services and penetrate into more cities. Carsharing is the perfect opportunity
for rental services to enhance customer journeys in a fast changing world.
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6.2 Future Trends
Improvements in technology are shaping vehicle use from different angles.
Progressively, companies in the market are talking more about mobility and less
about vehicles. RAC companies, automakers and other vehicle companies are
shifting towards new trends in the industry. According to different reviews, there is
a general consensus that “the rise of the modern city is built on mobility” (Wegener
2013). In mobility aspects, according to the literature, a shift towards “Mobility
Management” is shaping the city of today, where competition among each mode of
transport no longer favours one type but the combination of all. New “mobility
frameworks” are shaping multimodal demands in cities by combining different
innovative transportation business models (Wagner & Shaheen 1998).
As seen in Figure 39, RAC companies are now mostly just RAC companies and
carsharing is only a small portion of their business. Nonetheless, it is a natural trend
that they will adapt their fleets to carsharing models and technologies to optimize
the usage of it in strategical ways.
PRESENT
RAC
FUTURE
Carsharing
Future
Optimized
RAC
Optimized
Carsharing
Fleet
Fleet
Figure 39: Future RAC fleet management
Among a merge of RAC and carsharing business models helped by improvements
in technology, there are other emerging trends that RAC companies are closely
looking at and considering for their business models. Electric Vehicles, Multimodal
cities, autonomous cars, and smarts cities will shape the next generation of mobility
services around the world.
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6.2.1 Electric Vehicle
Electric vehicles have been in mayor companies agendas for many years, but
designing profitable schemes has been a hazard for most of them. Tesla Motors is
one of the few innovative companies that during the past years has been able to
make a profit with electric vehicles. Concerns about the environment (C02
emissions), as well as a growing demand for these kings of cars, are making mayor
players interested in offering this kind of product (Futurice 2013).
By 2016 it is expect that one in every five carsharing vehicles will be an electric
vehicle (Frost & Sullivan 2010). Mayor rental companies are betting on it and as
happens with carsharing, the two mayor electric vehicle markets are Europe (26.1%
world market share) and North America (39% market share) (Frost & Sullivan
2014).
By 2020, it is estimated that China and the US will be the biggest contributors to
electric vehicles, followed by Japan and Spain (Global EV 2013). Furthermore, it
is estimated that by 2020 there will be about 20 million electric vehicles on the
roads (Global EV 2013) which represent 2% of total passenger cars (compared to
0.02% from 2012, which means 100 times more in 2020) (Global EV 2013).
6.2.2 Multimodality
Industry experts in mobility are predicting a revolution in the way inhabitants move
around the city. With the help of technology, applications and on-demand services,
experts think that “future of mobility, they believe, will be ‘multi-modal,’ with
urban dwellers using smartphones to plan mix-and-match trips that combine cars,
bikes, public transportation and walking” (Gardiner 2013). The biggest players in
the carsharing industry, as well as Frost & Sullivan analysts, agree on that
carsharing can only co-exist in cities with strong transportation infrastructure (Frost
& Sullivan 2013).
Carsharing is becoming the new alternative to other types of transportation methods
in cities where customers do not want a private vehicles. Cities with new types of
transportation schemes are adding carsharing to aggregate value to transportation
infrastructures.
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6.2.3 Autonomous Cars
Many industry experts agree on the fact that autonomous driving will be essential
in the main player’s agendas in the near future (Morgan Stanley 2014). At the end
of 2012 Google developed a driverless car that has already covered more than
500,000 km without having any type of accident (Futurice 2013). As seen in Figure
40, Morgan Stanley predicts that autonomous cars will be fully present in society
by 2025.
Timeline Adoption Autonomous Vehicle
100% Autonomous
Complete autonomous
capability
Limited driver
substitution
Passive driving
2012
2014
2016
2018
2020
Figure 40: Timeline for Adoption of Autonomous Cars
2022
2024
2026
Source: Morgan Stanley 2014
Cars with semi-autonomous capability are being sold nowadays (e.g. Toyota Prius
and its autonomous parking). Beyond practical benefits of autonomous cars, there
is an economic impact that also attracts big players in the market. Morgan Stanley
estimated that “autonomous cars can contribute $1.3 trillion in annual savings to
the US economy alone, with global savings over $5.6 trillion” (Morgan Stanley
2014).
Autonomous cars and innovation in mobility services are attracting from outside
the RAC industry. Google, Uber or OEMs are starting to become potential threats
to the present oligopoly in rental markets. Technology improvements are lowering
barriers to entry for new players from different industries, “as all vehicles become
connected devices, representing constantly mobile capacity, potentially disrupting
such traditional strengths as the location of their available fleet at key spots, such
as airports” (Morgan Stanley 2014). According to Morgan Stanley, “autonomous
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driving provides a powerful encouragement for car usage and miles driven (by
reducing many of the hazards and inconveniences of human controlled driving),
there is far greater uncertainty over its potential effect on private car ownership”
(Morgan Stanley 2014).
6.2.4 Big Data
Car rental companies have a history of adapting the latest technology to improve
the convenience of the rental experience. Like the computer and smartphone
industry today, the auto industry is reorganizing into "hardware" OEMs, "software
/ systems" OEMs/suppliers, and integrated experience creators. They are even
begging to sell content to the occupants of the car and could mean a significant new
revenue stream (Morgan Stanley 2014).
Figure 41: Increasing New Players in Rental Competition
Source: Morgan Stanley 2014
With connected vehicles, RAC companies are having to adapt to faster constant
changes to meet customer demand. Controlling and managing Bid Data is becoming
another new strategic development that rental companies have to deal with. This is
creating them to shift towards a dynamic business model. As see in Figure 41,
competition is increasing in every aspect and being able to change fastest in starting
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to become crucial. The combinations of all these future trends in the market will
shape the next type of cities where RAC companies want to be present, smart cities.
6.3 Smart Cities
Through the use of technology driven systems and innovative devices, cities can
become interconnected platforms to respond to certain demands. This
interconnection and technology improvements enhance urban life-styles by
optimizing consumption, usage, and implementation of different assets around a
city. These kinds of cities are known as smart cities. According to Frost and Sullivan
a smart city’s main components are:
 Smart Governance and Education
 Smart Healthcare
 Smart Building
 Smart mobility
 Smart infrastructure
 Smart technology
 Smart energy
 Smart citizen
Cities are seeking to become smarter through the use of “new information and
communication technologies”, causing public and private collaborations to
implement a wide range “smart” solutions (Cohen & Kietzmann 2014). For
instance, Santander is setting an example in the development of smart cities: their
goal is to develop a fully integrated Smart City. It is a three year EU-funded project
supported by various universities and companies (e.g. University of Santander,
Telefonica Digital, NEC, IBM…). The project looks like its providing an invaluable
blueprint for the future of the diverse players working together in this new
environment.
In a research from Frost & Sullivan, they estimate smart cities as a global market
size of $1.5 trillion in combined segments of transportation, building, healthcare,
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energy, governance, and infrastructure (m2mnow 2012). Contrasted to the GDP of
countries in 2014, it would be considered about the 12th largest GDP in the world,
sitting above Spain`s GDP. “While the potential is huge, the challenge faced is
finding funding and developing the right business model, as many cities in the
Western world do not have the finances available to take on some mammoth-sized
projects” (Singh 2014). RAC companies are starting to also take into account these
kinds of trends in order to cover any type of mobility services needed.
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Chapter 7. Conclusion
7.1 Conclusion
Innovation has always been associated with technological innovation, but in many
cases it is only valuable with a successful business model (Rayna & Striukova
2013). When improvements in technology do not disrupt or generate value in
companies, other mechanisms can enhance a company’s performance. Business
model innovation is thought to be more powerful than technological or product
innovation, if well implemented. In this research, RAC companies have been
studied identifying their new way of innovating their business models,
implementing carsharing in their services. Considering the business model canvas,
many different components changed when introducing carsharing. The idea behind
carsharing is renting, but the way it is delivered and used is completely different
than traditional renting services.
In Europe, the main players in the RAC industry have been analysed: Avis, Sixt,
Europcar and Enterprise, with their corresponding carsharing schemes. Then, in the
US, although 95% of the market is dominated by three main players, there were
five players analysed: Avis, Sixt, Hertz, UHaul, and Enterprise.
After analysing the main Rent-A-Car player’s business models it can be said that:
 There is a general agreement on carsharing being a fundamental future
component in RAC company’s businesses, aggregating value to their different
services.
 Carsharing still represents a small portion of RAC company’s revenues (<3%).
 Many company CEOs in this industry agree that carsharing and its technology
will shape the mobility services of the future.
 Even though the main players consider carsharing as a necessary service to
have, many are still in initial phases compared to the biggest player, Zipcar,
which has been operating much more time in the market. In order to compete
against Zipcar’s size and experience, other RAC companies may consider a fast
method of growth: acquiring carsharing companies. Merges and acquisitions
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may speed up competitive positioning, making this industry interesting for
investment banks to consider in the present time and for carsharing start-ups to
find a route of exit.
 A crucial aspect in a carsharing business models is the customer base attracted
and retained by the companies. Pure rental companies don’t thrive on a
community based platforms, as opposed to carsharing companies. The shift
toward having a greater client focused service than before, will be a
fundamental change to develop in order for big players to succeed.
From the pricing study (carsharing usage prices) it can be said that:
 Point-to-point carsharing is, at the moment, only best for very short times of use
(<1 hour). Therefore, it should be thought as an alternative to a taxi and less to
that of a personal vehicle.
 For longer uses of vehicles (more than one hour), round trip carsharing is ideal
and Zipcar offers the best solution for it in price and location in general terms
(in some cases some services were cheaper).
 UHaul CarShare differentiated themselves though dynamic pricing, which is an
interesting opportunity to attract customers that want cheaper carsharing
schemes in the US.
 Carsharing isn’t a threat to RAC companies, but a complementary service that
closes the gap of mobility solutions. This service is aggregating value to renting
companies, which also have to be careful for future perspectives and trends in
order to continue leading the RAC market.
The research has also helped understand that carsharing is much more than just
having vehicles and economic capacity to sustain them. Hertz for example, in 2013
implemented their carsharing technology in more than 35,000 (biggest carsharing
fleet after this move), but is struggling to increment carsharing customer base:
without it, carsharing does not work. Carsharing requires new strategies, dynamic
mind-sets, and capacity for being open in innovation. Traditionally, rental
companies have never been very dynamic, therefore, carsharing will be an
interesting challenge.
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Considering the future of mobility and new trends it can be said that:
 Rental companies don’t want to stay behind in trends of mobility, but with the
introduction of new technologies their oligopoly can be in threat if they don’t
react fast enough to new shifts in the market.
 Big corporations that have trouble changing certain aspects in their business
models due to their size, have to bear in mind that now they have to, for survival,
learn how to adapt faster.
 Dynamic business models will dominate future renting service (big data, real
time information, understanding customer needs faster) and in order to maintain
their market share, they will have to be careful. In Europe, for example, where
there is a larger tendency to use vehicles in off-airport locations, there is a more
diversified competitive market, meaning that no matter how big a company is,
new entrants can be dangerous (f.e. Uber).
Carsharing is expected to grow during the next years at exponential rates and with
it other new types of technological services and products. Electric vehicles,
multimodal cities, and autonomous cars are the next trend in mobility services that
will shape Smart Cities around the world. If main players want to maintain their
strong market share, innovation concerning services and business models with
respect to new trends will have to be considered in order to stay ahead of the market.
A shift toward dynamic business models in rental industries, with the introduction
of connected vehicles and real time information will be necessary to keep on
surviving in such a competitive industry.
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7.2 Limitations
Certain information during the analysis and study of the companies was not
provided or detailed due to lack of information on and off-line:
 With private companies that do not publish their financial statements, it was
complicated to go into detail in their different revenue segments (in order to
understand what percentage of sales came from carsharing).
 Main players do not share much of the detailes regarding carsharing (only Avis
said how much of their sales carsharing represented) – it may be a strategic
move.
 Carsharing companies do not reveal, many times, their main indicator of
success: membership numbers.
 UHaul CarShare’s membership base could not be found.
 The financial reports of public companies for 2014 have not been published yet
(at the moment of the research findings), and for that reason the information
provided was in general, as of 2013.
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1
________________________________________________________________________
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History
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________________________________________________________________________
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________________________________________________________________________
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________________________________________________________________________
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________________________________________________________________________
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On-Demand
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and
Alamo
to
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________________________________________________________________________
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Appendix
Appendix 1
Pricing Tables - EUROPE
 Zipcar (AVIS)
ZIPCAR
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
5
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
10
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
15
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
20
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
25
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
30
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
60
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
100
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
150
7 €
14 €
21 €
28 €
35 €
42 €
49 €
70 €
70 €
70 €
200
19 €
26 €
33 €
40 €
47 €
54 €
61 €
82 €
82 €
82 €
300
14 €
57 €
64 €
71 €
78 €
85 €
106 €
106 €
106 €
 Hertz 24/7 (Hertz)
HERTZ
24/7
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
5
10
15
20
25
30
60
100
150
200
300
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
9 €
17 €
26 €
34 €
43 €
51 €
60 €
85 €
85 €
85 €
29 €
37 €
46 €
54 €
63 €
71 €
80 €
105 €
105 €
105 €
49 €
57 €
66 €
74 €
83 €
91 €
100 €
125 €
125 €
125 €
97 €
106 €
114 €
123 €
131 €
140 €
165 €
165 €
165 €
________________________________________________________________________
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INGENIERO INDUSTRIAL
 DriveNow (Sixt)
DRIVENOW
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
19
37
29
48
54
54
5
€
€
€
€
€
€
73 €
98 €
109 €
109 €
19
37
29
48
54
54
10
€
€
€
€
€
€
73 €
98 €
109 €
109 €
19
37
29
48
54
54
15
€
€
€
€
€
€
73 €
98 €
109 €
109 €
19
37
29
48
54
54
20
€
€
€
€
€
€
73 €
98 €
109 €
109 €
19
37
29
48
54
54
25
€
€
€
€
€
€
30
-
19
37
29
48
54
54
€
€
€
€
€
€
73 €
98 €
109 €
109 €
73 €
98 €
109 €
109 €
19
37
29
48
54
54
60
€
€
€
€
€
€
19
37
29
48
54
54
€
€
€
€
€
€
73 €
98 €
109 €
109 €
73 €
98 €
109 €
109 €
100
-
150
-
200
-
300
-
19
37
35
53
54
54
19
37
49
68
63
63
19
37
64
82
77
77
66 €
93 €
111 €
106 €
106 €
€
€
€
€
€
€
€
€
€
€
€
€
73 €
98 €
109 €
109 €
81 €
98 €
109 €
109 €
€
€
€
€
€
€
96 €
98 €
109 €
109 €
154
127
138
138
€
€
€
€
 Car2go (Europcar)
CAR2GO
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
5
10
15
20
25
30
60
100
150
200
300
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
15
30
45
59
59
59
59
59
59
59
32
47
62
76
76
76
76
76
76
76
44
59
74
88
88
88
88
88
88
88
58 €
73 €
88 €
103 €
103 €
103 €
103 €
103 €
103 €
103 €
73 €
88 €
103 €
117 €
117 €
117 €
117 €
117 €
117 €
117 €
117
132
146
146
146
146
146
146
146
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
€
________________________________________________________________________
- 115 -
€
€
€
€
€
€
€
€
€
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
Pricing Tables - US
 Zipcar (AVIS)
ZIPCAR
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
5
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
10
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
15
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
20
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
25
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
30
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
60
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
100
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
150
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
200
9 $
19 $
28 $
37 $
46 $
56 $
65 $
84 $
84 $
84 $
400
68 $
77 $
87 $
96 $
105 $
114 $
134 $
134 $
134 $
20
13
25
38
50
63
76
85
85
85
85
25
13
25
38
50
63
76
85
85
85
85
30
13
25
38
50
63
76
85
85
85
85
60
13
25
38
50
63
76
85
85
85
85
100
13 $
25 $
38 $
50 $
63 $
76 $
85 $
85 $
85 $
85 $
150
13 $
25 $
38 $
50 $
63 $
76 $
85 $
85 $
85 $
85 $
200
13 $
25 $
38 $
50 $
63 $
76 $
85 $
85 $
85 $
85 $
400
75 $
87 $
100 $
112 $
125 $
135 $
135 $
135 $
135 $
 Hertz 24/7 (Hertz)
HERTZ 24/7
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
13
25
38
50
63
76
85
85
85
85
$
$
$
$
$
$
$
$
$
$
5
13
25
38
50
63
76
85
85
85
85
$
$
$
$
$
$
$
$
$
$
10
13
25
38
50
63
76
85
85
85
85
$
$
$
$
$
$
$
$
$
$
15
13
25
38
50
63
76
85
85
85
85
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
________________________________________________________________________
- 116 -
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
 DriveNow (Sixt)
DRIVENOW
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
5
10
15
20
25
30
60
100
150
200
400
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
22
41
60
79
90
90
90
90
90
90
101
121
140
151
151
151
151
151
151
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
 Car2go (Europcar)
CAR2GO
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
5
10
15
20
25
30
60
100
150
200
400
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
15
30
45
60
75
85
85
85
85
85
102
117
132
147
157
157
157
157
157
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
________________________________________________________________________
- 117 -
$
$
$
$
$
$
$
$
$
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
 Enterprise CarShare (Enterprise)
Enterpirse CarShare
distance km
time
hours
0
1
2
3
4
5
6
7
10
15
24

0
5
10
15
20
25
30
60
100
150
200
400
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
9 $
18 $
27 $
36 $
45 $
54 $
63 $
84 $
84 $
84 $
68 $
77 $
86 $
95 $
104 $
113 $
134 $
134 $
134 $
UHaulCarshare (U-Haul)
UHaulCarshare
distance
km
time
hours
0
1
2
3
4
5
6
7
10
15
24
0
5 $
10 $
15 $
20 $
25 $
30 $
35 $
50 $
67 $
67 $
5
8 $
13 $
18 $
23 $
28 $
33 $
38 $
52 $
67 $
67 $
10
9 $
16 $
21 $
26 $
31 $
36 $
41 $
55 $
67 $
67 $
both same price
15
9 $
17 $
24 $
29 $
34 $
39 $
44 $
58 $
67 $
67 $
20
9 $
17 $
26 $
32 $
37 $
42 $
46 $
61 $
67 $
67 $
25
9 $
17 $
26 $
34 $
40 $
44 $
49 $
64 $
67 $
67 $
30
9 $
17 $
26 $
34 $
42 $
47 $
52 $
67 $
67 $
67 $
60
9 $
17 $
26 $
34 $
43 $
51 $
67 $
67 $
67 $
67 $
100
9 $
17 $
26 $
34 $
43 $
51 $
67 $
67 $
67 $
67 $
150
9 $
17 $
26 $
34 $
43 $
51 $
67 $
67 $
67 $
67 $
200
9 $
17 $
26 $
34 $
43 $
51 $
67 $
67 $
67 $
67 $
400
54 $
54 $
54 $
54 $
54 $
54 $
134 $
134 $
134 $
________________________________________________________________________
- 118 -
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
Appendix 2
One-Way <1 Hour – Compared to Taxi
Europe
 DriveNow (Sixt)
DRIVENOW
distance km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
5
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
10
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
15
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
20
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
25
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
30
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
60
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
100
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
150
0 €
2 €
3 €
5 €
6 €
8 €
9 €
11 €
12 €
14 €
16 €
200
-
60
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
16 €
17 €
100
15 €
16 €
17 €
19 €
20 €
22 €
23 €
25 €
26 €
28 €
29 €
150
29 €
30 €
32 €
33 €
35 €
36 €
38 €
39 €
41 €
42 €
44 €
200
-
300
-
 Car2go (Europcar)
CAR2GO
distance km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
5
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
10
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
15
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
20
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
25
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
30
0 €
1 €
3 €
4 €
6 €
7 €
9 €
10 €
12 €
13 €
15 €
300
-
________________________________________________________________________
- 119 -
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
 Taxi
TAXI
distance
km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
0 €
4 €
4 €
4 €
4 €
14 €
16 €
18 €
21 €
23 €
25 €
5
0 €
13 €
13 €
13 €
13 €
23 €
25 €
27 €
30 €
32 €
34 €
10
0 €
22 €
22 €
22 €
22 €
32 €
34 €
36 €
38 €
41 €
43 €
15
0 €
31 €
31 €
31 €
31 €
41 €
43 €
45 €
47 €
50 €
52 €
20
0 €
40 €
40 €
40 €
40 €
50 €
52 €
54 €
56 €
58 €
61 €
25
0 €
49 €
49 €
49 €
49 €
59 €
61 €
63 €
65 €
67 €
69 €
30
0 €
58 €
58 €
58 €
58 €
68 €
70 €
72 €
74 €
76 €
78 €
60
0 €
111
111
111
111
122
124
126
128
130
132
€
€
€
€
€
€
€
€
€
€
100
0 €
183
183
183
183
193
195
197
200
202
204
€
€
€
€
€
€
€
€
€
€
150
0 €
272
272
272
272
283
285
287
289
291
293
€
€
€
€
€
€
€
€
€
€
200
-
300
-
________________________________________________________________________
- 120 -
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
US
 DriveNow (Sixt)
DRIVENOW
distance km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
5
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
10
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
15
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
20
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
25
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
30
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
60
12
12
12
12
12
12
12
14
15
17
18
$
$
$
$
$
$
$
$
$
$
$
100
12 $
12 $
12 $
12 $
12 $
12 $
12 $
14 $
15 $
17 $
18 $
150
12 $
12 $
12 $
12 $
12 $
12 $
12 $
14 $
15 $
17 $
18 $
200
-
300
-
60
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
100
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
150
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
200
-
300
-
 Car2go (Europcar)
CAR2GO
distance km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
5
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
10
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
15
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
20
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
25
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
30
0 $
2 $
5 $
7 $
9 $
11 $
14 $
16 $
18 $
20 $
23 $
________________________________________________________________________
- 121 -
UNIVERSIDAD PONTIFICIA COMILLAS
ESCUELA TÉCNICA SUPERIOR DE INGENIERÍA (ICAI)
INGENIERO INDUSTRIAL
 Taxi
TAXI
distance km
time
min
0
5
10
15
20
25
30
35
40
45
50
0
0 €
3 €
3 €
3 €
3 €
16 €
19 €
21 €
24 €
27 €
30 €
5
0 €
9 €
9 €
9 €
9 €
22 €
25 €
28 €
30 €
33 €
36 €
10
0 €
15 €
15 €
15 €
15 €
28 €
31 €
34 €
37 €
39 €
42 €
15
0 €
21 €
21 €
21 €
21 €
35 €
37 €
40 €
43 €
45 €
48 €
20
0 €
27 €
27 €
27 €
27 €
41 €
44 €
46 €
49 €
52 €
54 €
25
0 €
34 €
34 €
34 €
34 €
47 €
50 €
52 €
55 €
58 €
61 €
30
0 €
40 €
40 €
40 €
40 €
53 €
56 €
59 €
61 €
64 €
67 €
60
0 €
77 €
77 €
77 €
77 €
90 €
93 €
96 €
99 €
101 €
104 €
100
0 €
127
127
127
127
140
143
145
148
151
154
€
€
€
€
€
€
€
€
€
€
150
0 €
189
189
189
189
202
205
207
210
213
216
€
€
€
€
€
€
€
€
€
€
-
-
________________________________________________________________________
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