Car2Go Environmental Analysis

Car2Go Environmental Analysis
This project has been conducted to do an environmental analysis to the company called
Car2go and its membership/sign-up product in Vancouver. The analysis has been done using all
the external forces that involves collecting facts about the company through primary and
secondary research. The external forces have been divided into 6 categories namely
Demographic, Socio-Cultural, Competitive, Technological, Economic, and Regulatory (Kerin). It is
then explain how each of the environmental factors could positively or negatively influence the
sign-up for membership of Car2go in Vancouver.
II. Company Description
Daimler AG pioneered the service of providing easy access of two-seat cars rented on
hourly or daily basis with pre-paid street parking and fuel in Ulm, Germany in October, 2008
(Wikipedia). Since then, the company developed Car2Go car sharing services in Europe and
North America. With 7,000 vehicles serving 18 cities, Car2Go has served 350,000 customers
since its inception. It launched in Vancouver in June 2011 with 250 cars. Car2go has a current
fleet of 450 cars with both gasoline and electric type serving in Vancouver downtown,
Vancouver West and North Vancouver. Car2Go renters book the compact car online with phone
APPs, access the car and park it at designated places for free. Car2Go advertises as “a new form
of mobility for more dynamic way to get around”, promising flexible, convenient and affordable
transport solution offering inclusion of gas, parking and insurance cost (Car2Go).
III. Environmental Scan
A. External Forces
1. Demographic
According to an updated census, Metro Vancouver’s population has increased by 197,000
between 2006 and 2011, with Generation X absorbing 16.2% and Generation Y absorbing 49.1%
of the population respectively (Metro Vancouver). Within the Generation X population, 20%
hold university degree and 25% with the post-graduate degree whereas 53% of Generation Y
holds a university degree and 41% hold post-graduate degree (Vancouver Foundation). On the
other hand, the demographics of Vancouver is a multi-ethnic society. On the other hand, visitors
entering Canada via B.C. have been declining since 2011 with its visitors from Japan, the
traditional largest source of visitor entries from Asia dropping since 1996 as a result of economic
decline (BC Stats). Although the number of visitors coming to Vancouver has been shrinking, the
number of the local population has been increasing. The change in population makeup with
more educated Generation X and Generation Y population who are exposed and good with
technology maneuver is a positive indicator that marketing Car2Go can be a success in
2. Socio-cultural
The idea of joining memberships, renting commodities for short-term use, the culture
change of the environmental concerns and the acceptance of new technology such as the using
of Smartphone are certain characteristics in the North American population that interest Car2Go
marketers. The social factor that helps the marketing of Car2Go is the welcoming nature of
Vancouverites in accepting new ideas. On the other hand, the increasing fuel cost and
environmental concern for gas emissions also motivate drivers to access the convenience of
Car2Go which offers paid gas and option of electric car (Kaufman). Moreover, the change in
family value among young people who prefer childless relationships, the need of cruising around
busy downtown area for various business purposes and the inclusion of free parking in
designated parking lots make the 2-seater compact Car2Go an excellent choice. Just as a report
says: “People of my generation believed that our private automobile said a lot about who we
are, that [it] defined our power and our status. The younger generations don't seem to be
buying into that anymore, and they are seeing automobiles as simply a tool (Kaufman).”
3. Competitive
The current trend of saving cash with short-term vehicle renting is gaining increasing
popularity. While most car rental companies rent without including fuel, short term vehicle
rentals have a competitive edge in the market with paid gas and parking package. Car2Go faces
the strong competition such as Medo, ZipCar, Hertz, and Budget etc. For instance, as Car2Go
offers 2-seater SMART car only, its competitor, ZipCar offers 30 different kinds of cars with gas,
insurance and mileage included and cars conveniently parked in many locations for access
(Burns). ZipCar operates in similar ways like Car2Go: membership, online reservation, drive and
park. In Canada, ZipCar operates only in Toronto and Vancouver. In Greater Vancouver, ZipCar is
accessible in North shore, downtown, Vancouver East, Vancouver West and Burnaby(Car2Go,
ZipCar). While both ZipCar and Car2Go rentals cover a 200 km mileage, Car2Go charges a onetime membership registration fee of $35.00 offers options of charging at $0.38 per minute, hour,
a $13.99 hourly rate or a maximum daily rate of $72.99. Perks of Car2Go include 20 free minutes
for renters who take the time to fill up the gas tanks in pre-paid gas stations. On the other hand,
Zipcar charges more for joining fee, at a rate of $75.00 and a $30.00 annual fee of each driver.
Zipcar charges hourly rates on week days, 7-7 business hours and full day of $64.00. While
Zipcar offers many types of cars, from small compact to vans, it also targets university students
to reduce the hassle for on-campus parking (Car2Go, ZipCar). Hence, while Car2Go appeals
mostly to young business executives, Zipcar targets a larger group, from family to business and
university students.
4. Technological
Hybrid cars are becoming more popular because it is fuel efficient cars and they are better
for the environment. An increase in sales is the evidence of that. This technology will help
car2go attract more people to use their cars as they invest more in hybrid cars. These cars can
also help them lower their overhead costs and will result to more income (Ingram). Car2Go
heavily relies on computer technology. It can be booked 30 minutes prior to use by online
booking or via smart phone APPs. Each member will be given a Car2Go member card which can
be scanned by the card reader behind the windshield to unlock the car (Car2Go). By scanning on
a touch-screen, the renter puts in the PIN to access the car key. At the end of rental, renters
leave the car in an approved parking area and follow the end-trip procedure. As they take
advantage of those technologies, they can also attract more people to sign up for their
5. Economic
According to Work BC website, B.C. will be the economic leader of Canada in the coming
years. Gross Domestic Product in B.C. is predicted to increase by over 25 percent by 2017, with
increasing focus in the service sector, health-care, high-tech and retail. Statistics reveal a
positive economic growth by 1.8 percent each year through to 2019, creating 450,000 new jobs
(WorkBC). As well, emerging sectors of green technology, digital media and life sciences will
continue to do well. Work B.C. also estimate about 650,000 young people currently in the
education system, suggesting a large population with green awareness and technology knowhow. These predictions encourage Car2Go’s market share in Vancouver. The compact nature of
SMART consumes little fuel and gives off limited gas emissions. As well, the option of electric car
also makes the car very popular for environmentalists. On the other hand, the increasing
population in Generation Y and Z sectors and the positive economic growth also mean that
Car2Go will remain a popular choice among young users and business executives.
6. Regulatory
Car2Go is limited to users with at least 3 years of driving experience. Car2Go renters can
park in any designated spot for stopovers. Car2Go can also be parked in “No Parking except with
Permit” or “Resident Only” locations (Car2go). At the end of the trip, Car2Go has to be parked
at the authorized parking location within the Home Area. On the other hand, Car2Go cannot be
parked in specific areas, such as parking meters, time-restricted areas, private parking lots,
private property, commercial, loading, taxi, valet or bus zones, reserved spots or parking spots
designated for disabled only. When parking, Car2Go drivers cannot double park, perpendicularly
or at reversed angle. Also, Car2Go cannot end trips in a zone signed with temporarily no
stopping or parking. As well, Car2Go is subject to the new regulation beginning on April 1st,
2013 when trips last longer than 8 hours to an additional $1.50 Passenger Vehicle Rental Tax
(PVRT) per trips lasting over 8 hours, per day. (Car2go) Furthermore, the city of Vancouver has
started its project to become the greenest city by the year of 2020. One of the action plan of the
city is to make walking, cycling, and public transportation preferred transportation options. This
action plan had already started as we see various improvements with the transit system and the
roads everywhere. As this action plan continues, there are more people will take the public
transit more. Car2Go with green environment concepts such as using less gasoline and electric
power and its convenience idea such as “want a car ready to go whenever” will attract more and
more people’s interests (Bike to Work).
Works Cited
BC Stats. “Tourism Publications and Data.” The Province of British Columbia,
n.d. Web. 18 May 2013.
Bike to Work. “Cycling and the Economy.” The Bike to Work Metrovan,
2013, Web. 19 May 2013.
Burns, John. “Vancouver's Best Car Sharing Company.” News & Features Vancouver The May 2012, Web. 18 May 2013.
Car2Go. “SIMPLY. ALWAYS. EVERYWHERE.” Car2Go Vancouver, n.d. Web. 18 May 2013.
City of Vancouver. “Greenest City 2020 Action Plan” The City of Vancouver, 2012,
Web. 18 May 2013.
Ingram, A. “Hybrid car sales soar 40%, study says.” The Christian science monitor. Retrieved on
May 5, 2012 Web. 19 May 2013.
Kaufman, Wendy. “What Drives Us? Car Sharing Reflects Cultural Shift.” The 8 Apr.
2013, Web. 19 May, 2013.
Kerin, Roger, A. et al. Marketing: The Core. Canada: Leanna Maclean, 2012. P28-53. Print.
Metro Vancouver. “Census Demographic Bulletins and Maps.” The Metro
Vancouver, n.d. 2013, Web. 18 May 2013.
Vancouver Foundation. “Vancouver Foundation Connections and Engagement Survey
Demographics.” The Vancouver Foundation, June 2012, Web.
19 May 2013.
Wikipedia, “Car2Go.” The 21 May, 2013 Web. 21 May 2013.
Work BC. “BC Economy.” The WorkBC. n.d. Web. 18 May 2013.
ZipCar. “Find Cars” the ZipCar, n.d. Web. 19 May 2013.