1. Introduction

Cars are an undoubted boon to our society – they open up a huge range of opportunities to every individual fortunate enough to have access to one. Yet they are expensive and still not financially affordable to many in the community, even if most people aspire to car ownership. But as people living in cities in particular know only too well, there are already too many of them.

Cars can provide mobility at a level that no other form of transport can match. However, that mobility cannot be universally available – current trends and aspirations of such universality are simply not sustainable in environmental or physical terms. Many initiatives are now under way to try and tackle this problem – how to provide for people’s mobility needs in a way that maximises the benefits both to the individual and to society as a whole.

Some of these initiatives focus on providing more of a continuum of transport service provision. Ideally, mode choice should be based on the most appropriate method for a particular journey, rather than on the travellers socio-economic circumstances and in particular on their access to a car. Once the substantial fixed costs of owning a car are paid, low marginal cost of use discourages choice of public transport modes for any journey. This paper examines a form of car use that can provide a bridge in the current gap between private and public transport systems.

 

2. The development of "Pay as you drive"
1. The concept: between hire car and taxi?

Conventional car ownership is an all or nothing decision. A major commitment has to be made to move from the car-less group in society, to the car owning group. There is no middle way – even the acquisition of an old banger, the traditional first step on the car ownership ladder, requires a significant outlay on insurance, tax, MoT tests and maintenance and replacement of parts. As the required maintenance and emissions standards increase over time, so these basic costs will also increase.

For the occasional car user, such an outlay does not make economic sense. But for those not willing or not financially able to take the plunge of ownership, what are the options for those journeys where public transport, cycling or walking are not available or not feasible? Journeys that involve carrying a lot of children, or a lot of goods, for example. Journeys to places where the alternatives are simply not available. Emergencies. Taxis could perhaps sometimes meet the need, for example to get the weekly shopping. Car hire can provide for that weekend away in the hills. Sometimes a friend or neighbour will be able to give you a lift.

But these alternatives are in many cases not ideal. Taxis are really only suitable for short journeys; while hiring a car requires a good deal of forethought and often means collecting it at some distance from home. Nobody wants to impose too much on friends. Ownership of a car appears the only way of adequately meeting the demand for mobility that is so much part of today’s society.

In many of our other needs, we do not take decisions in this way. If we enjoy golf, for example, we don’t buy a golf course – we join a club. We recognise that there would be no sense in paying a significant proportion of our income buying something that we would only use for a small proportion of our time. In the case of the motor car, we have a blind spot: typically a car is not in use, parked, for 23 out of every 24 hours.

Over the decades of growth in car ownership and use, alternative approaches to the use of cars have developed. In particular, we have taxis and other forms of chauffeur-driven car hire, and we have self-drive car hire. This type of arrangement is now well established, but other concepts have also been tried over the years, particularly in the 1970’s and 1980’s. For example, schemes where neighbours come together in joint ownership of a car, which in some cases grew into schemes where a group of people jointly subscribe to group ownership of a car in a form of club. Innovative forms of car hire have also been tried, of which the best known is probably the Amsterdam "Witkar" scheme providing access to specially designed self-drive electric cars in central Amsterdam. A similar scheme called "Procotip" was tried in Montpellier in France ^,. Both these schemes failed.

More recently, however, a new organisational approach to "Pay As You Drive Car Sharing" has evolved in the German speaking countries of Europe, particularly in response to increasing concern about the environmental impacts of car use. This organisational approach has grown out of informal initiatives in which car-owners let others use their car for some form of payment. Once more than a handful of people are involved in such an arrangement a much more professional approach is needed. This evolution of a new professionalism appears to be the basis of a rapidly growing new transport option.

 

2. Developments in mainland Europe

Known as "Car Sharing" (sic) in the German speaking countries, the name for this form of transport service causes confusion in English, particularly in the UK. In Britain, this term is often understood to mean car owners sharing the use of their car (giving lifts), typically for journeys to a particular workplace. The term "car pooling" as used in the US is a better description for such a service. To avoid this confusion, the term "City Car Club" has been coined for the concept being discussed in this paper, although "Pay As You Drive Car Sharing" has also been used.

City Car Club schemes have developed very rapidly over the last ten years. The first established scheme started in Switzerland in 1987, and in 1990 the first German venture started in Berlin. The concept developed very rapidly from there in both countries. By September 1998, there were 20,000 members in the Swiss organisation, and 25,000 in the German schemes . Interestingly, these countries have the highest rates of car ownership in Europe. More recently, similar schemes were started in Austria, and the Netherlands.

The schemes that are developing throughout Europe share the characteristic of being professionally run organisations, rather than ad-hoc groups of neighbours. This gives them the capability to grow. However, there are also significant differences, particularly between the organisational structure that evolved in Switzerland and that in Germany. From an early stage, uniform standards and services were provided throughout Switzerland under the umbrella of "Mobility CarSharing", which through merger became the sole provider of this type of service throughout the country. A business-oriented approach based on partnership with other transport-related businesses has given this organisation the capability to invest and grow its market at a rapid pace. From the beginning this organisation saw itself as being in the business of mobility provision, rather than simply car sharing.

In Germany by contrast , there has been a rather more fragmented form of development. A more bottom-up evolution has taken place, with organisations in different cities operating in isolation from each other with different standards and approaches. This has meant limited capability to invest, with growth having to take place more organically. However, the German schemes have over the last few years begun to move together under a single umbrella organisation, "European Car Sharing" (ECS). Some of the local schemes, such as that in Bremen, are also developing a wider mobility service through partnership with public transport operators. In Bremen, holders of a public transport season ticket can pay an extra 60DM for a smartcard that allows use of the StadtAuto (City Car Club) scheme.

In the last few years, there has been increased international awareness of the concept, particularly in cities looking at innovative ways of dealing with problems of growing traffic levels. A network of cities (Car Free Cities, Network for a new Mobility Culture) has with European Commission assistance been set up to disseminate ideas such as this, with some success. City Car Club projects are being established in the UK, Denmark, Italy and Sweden. The concept has also crossed the Atlantic, with the service "CarSharing Portland" starting in 1998 and further schemes in place by 1999.

 

3. What can City Car Club achieve?

Studies have shown that for those joining a City Car Club scheme, mileage by car is reduced. This takes into account the fact that a proportion of members will not previously have owned a car. A study of the initial Austrian scheme in Graz showed that approximately 50% of members did not previously own a car, and this group clearly increased their mileage by joining the scheme. For those who were former car owners, mileage by car reduced by over 60%. Overall, there was a reduction of around 50% in car mileage.

Schemes of this kind reduce the number of cars in urban areas. In Berlin, there is one car for each 20 members. In Austria, the figure is one car per 15 members. Given 50% of members as previous non-car owners, each 100 members of City Car Club could reduce parking demand in an urban area by 40-45 vehicles.

The Austrian study also examined the potential market share for City Car Club. This divides the potential market into a "pioneer" group, and a maximum potential market. The former consists of generalising the characteristics of the membership of the initial scheme into the area as a whole. This indicates a minimum potential market of 9% of households on the conservative assumption that members will not be willing to change the share of trips made by car. Given favourable circumstances that could reasonably be expected to develop as the market matures, a market share of at least 18% could be achieved.

4. The message arrives in Edinburgh

The City of Edinburgh Council has an innovative and ambitious transport policy known as "moving FORWARD". When established in 1994, this was the first local authority transport strategy to adopt targets for traffic reduction. The Council’s approach has been to examine all options to achieve these targets, including the examination of best practice in other cities and countries throughout the world. To help in this, the Council was a founder member of the "Car Free Cities" network of European cities, whose major objective is to share innovation and best practice in sustainable urban transport. It was through this network that members and officials of the City of Edinburgh Council first became aware of the StadtAuto concept.

Three aspects of City Car Club appeared particularly attractive for Edinburgh. First, the evidence suggested that it can contribute towards reduced traffic levels while at the same time recognising that there are circumstances in which a car is the most appropriate form of transport. This can also help to offset the "anti-car" label that tends to be attached to any policy aimed at sustainable transport objectives.

Secondly, Edinburgh’s urban form, in contrast to many English cities, contains high- density inner residential areas with a mix of social groupings. Parking in these areas is becoming an acute problem, with insufficient kerbside space in many areas to accommodate even current levels of ownership. At the same time, car ownership is rising very rapidly in the city. City Car Club appeared attractive in giving an alternative choice to residents in these areas without the need to do without a car entirely. City Car Club might therefore be able to stem car ownership growth and hence reduce parking problems in these areas. Finally, City Car Club potentially offers access to cars for those who are unable to afford ownership.

 

 

 

3. The Edinburgh project

 

1. Marketability in Edinburgh

In August 1996, the Council agreed to an initial feasibility study to examine whether there might be a market for such a scheme in Edinburgh, and what the key features might be for the Edinburgh public. The research also aimed to identify a suitable area of the city for the introduction of a pilot scheme. Lothian and Edinburgh Environmental Partnership (LEEP), a body set up by the Council to undertake environmental projects and develop these into commercial services, was commissioned to undertake this initial feasibility work.

The results of this research are reported elsewhere. In summary, a postal survey was carried out in Autumn 1996. Questionnaires were sent to 2000 individuals and 290 organisations to examine the potential interest in the concept. Sampling was based on a subjective assessment of the most likely groups to be supportive:

• The "environmentally aware" - both individuals (members of environmental groups) and organisations (participants in environmental initiatives in the city)
• Residents of inner suburban high density tenement areas with particular parking problems but good public transport links
• People less likely to be able to afford a car (residents of a housing association development close to the city centre)
• For comparison, residents of a low density outer suburban area were also surveyed.

In addition to this survey, a total of 14 focus group discussions were held, drawn from those to whom the questionnaires had been sent. These sought to identify key success criteria for a City Car Club scheme.

Table 1: Response to questionnaire

These responses demonstrate that preconceptions about potential interest, particularly in geographical terms, were not fully reflected in the results of the survey. It was not possible to gain an understanding of what factors were influencing positive interest in the scheme on a geographical basis. However, the relatively high levels of interest, even in apparently unlikely areas such as the outer suburbs, give scope for a good deal of optimism about the overall market segment for City Car Club. The conclusions of the focus group work are summarised in Table 2.

Table 2: Attitudes of focus group participants

1. Organisation and funding of a pilot project

On the basis of these studies, the City of Edinburgh Council sought funding for the implementation of a pilot project in the Marchmont area of the city, with four principal objectives:

• To set up a pilot scheme in one area of the city and run it for 1 year;
• To develop and test the effectiveness of a computer and telematics based hire booking and management system in delivering a high quality, reliable service;
• To survey users and others in the pilot areas and monitor and assess the extent to which car owners and users will switch from car ownership to permanent use of the local pool of cars and other modes of transport;
• To use the experience of the pilot to extend the scheme to other areas of the city.

Following discussion with central government, the DETR (then Department of Transport) agreed to provide funding of £150,000 towards technology and other set-up costs, and the Scottish Office provided £30,000 towards monitoring costs. The City of Edinburgh Council itself budgeted £48,000 for remaining set-up costs. A total of £228,000 public sector investment was therefore available. An advisory group chaired by the Scottish Office and including DETR and the City of Edinburgh Council was set up to oversee the use of these funds.

Once this funding was in place, LEEP was commissioned to undertake the development of the pilot project with a brief to:

• Produce a business plan including cash flow forecasts;
• Promote the scheme and develop a market in the pilot area;
• Assemble and test the technology required;
• Identify organisational arrangements for the scheme.

Development of the business plan for the pilot identified at an early stage two problems with achieving these objectives. The first was that a scheme defined as a pilot – implying that it could potentially be short-lived – would inevitably influence potential members’ decisions to join, and will also influence their behaviour as members. In particular, it would be unlikely that anyone would make the commitment to sell an existing car and join the scheme. The pilot would not therefore give a true indication of the potential uptake and use of the scheme, and this in turn could compromise the potential for full-scale implementation.

Secondly, cash flow projections indicated that a pilot scheme might well lose significant sums of money in the early years. The Council was not in a position to underwrite the level of potential losses that might take place. The only way of overcoming this problem would be to extend the scheme to a wider area and diversify the types of use and users in order to provide economies of scale from intensified use of vehicles and booking systems.

Further, more detailed, surveys were undertaken in the Marchmont and Sciennes area in 1997, building on the sample in Marchmont of the original survey described above. This work was undertaken by consultants to the Scottish Office as part of the "before" studies intended to monitor the effects of the scheme. However, the research also permitted further examination of the potential market in the area.

In this second survey, 700 addresses were sampled, with 456 interviews achieved (64% response rate). 24% of respondents indicated that they would be interested in joining – around 15% of households assuming non-respondents would not be interested. However, when a more detailed market assessment is carried out, looking at the factors that might in reality influence membership, a figure of around 7% appears more realistic. The major factor influencing this is age – a considerable proportion of interested people could be ruled out by being under 25. Insurance requirements appear likely to require this as the minimum age for membership.

All these factors led to the decision to seek a commercial operator for the scheme who would take on board the risks and could also potentially expand the scheme more quickly than the Council itself would be able to do (see Section 3.5).

1. Technology issues

The operation of systems in Germany and Switzerland was examined in depth by LEEP. These were of two basic types:

• A simple telephone booking system; with paper recording of vehicle mileage and time by the user. This requires a safe to be provided at the parking locations with the car keys inside; each member has a key to access the safe. This was the system in use by most of the European Car Club organisations.
• A telematics based system in which the vehicles are linked electronically with the booking system. In this case, vehicles are accessed by an unlocking device given to each member. Vehicle time and mileage is recorded through a direct link between the vehicle and the booking centre.

An early decision was to use a technology-based approach to booking vehicles and charging members. There were three reasons for this decision – cultural, marketing, and aesthetic. It was felt that in a British context, there would be considerable consumer resistance to filling in forms each time a Car Club vehicle was used. It seemed probable that there would be a high level of errors and omissions that could undermine the administration of the system – even though this was not the case in Germany.

The marketing reason was not unrelated to this. The keys to success of the scheme seemed likely to be the provision of a service of such a quality that car-owners will trust it enough to switch permanently to it and be prepared to depend on it; and of such a quality that it approached as close as realistically possible to the convenience of personal car ownership.

Finally, the aesthetic reasons are based on the nature of urban area. Marchmont, and similar areas likely to be suitable sites for City Car Club are conservation areas. The on-street safe needed to store the car keys, and possibly accessories such as child seats, might be quite bulky and unsightly, as well as potentially subject to vandalism. A scheme that could operate without the use of on-street hardware was preferred.

These requirements could only be met by a telematics system. Such a system needs to have three principle components:

• A hire booking system
• A vehicle management and security system
• A vehicle access system.

This is the interface between each customer and the Car Club organisation and is based at the City Car Club call centre. The system needs to deal with vehicle scheduling in response to customer bookings, and it needs to provide overall fleet management (requirements for servicing, valeting etc). It needs to keep records of each customer’s use of the system in order to generate bills and statements for customers, and linked with this it must hold the membership database. Finally the hire booking system will hold all the information required to generate management performance and accounting data.

This element provides the link between each vehicle and the Car Club organisation. It is based around a radio link between the call centre and the vehicles. Each vehicle has a black box that controls an immobiliser and the central locking, and records the status of the ignition and mileage run. It also provides a GPS signal that will locate the car in real time. The call centre software can interrogate the status of the car at any time, and when a booking is made will signal the black box in the car to release the immobiliser and recognise the users key fob signal (see below) at the start of the booking. At the end of a booking, data on time and mileage is transmitted to the call centre for billing.

The call centre will identify the location of the vehicle prior to the next hire to ensure it is correctly located. If it is not, this allows time for alternative arrangements to be made for the next customer. Finally, unauthorised use of the vehicles can be detected, and their location tracked if necessary.

The final stage in the process for the customer is to gain access to the vehicle. This is based on a small key fob infra-red transmitter that interacts with the vehicles black box to release the central locking system. Once inside the vehicle, the customer uses the keys to the vehicle in the normal way for door locking and ignition. At the end of the booking, the user once again uses the key fob to close up the car. The mileage and duration of the hire is then transmitted to the call centre automatically.

These three elements of hardware and software were all commercially available. The trick has been to combine them into a linked system with appropriate interfaces. This has been achieved. Trials were carried out between January and March 1999 to test the operation of the system and iron out any remaining problems.

1. Local arrangements for the City Car Club

City Car Club is by nature a neighbourhood based operation, and a good deal of work has been undertaken in the area selected for the initial scheme, Marchmont, to create a community-based customer group. In partnership with local politicians, a number of public meetings have been held. Initially these were intended to develop awareness of the project’s existence and the purpose of "City Car Club". A database of everyone expressing interest was set up, and a regular update on progress with the Club mailed out.

As awareness increased, a number of people were selected at a public meeting to represent local interests in a "core group" with LEEP and the Council that has been involved in the evolution of the pilot scheme. Hopefully this arrangement has helped optimise the shape of the scheme that will actually be implemented and has promoted awareness and interest in the scheme locally.

In spite of the local focus in terms of direct promotional activity, expressions of interest in participating in such a scheme have been received from people throughout the city. This can only be accounted for by the level of media interest in the City Car Club concept, which has led to a number of articles in the local and even national press^,. As a result of this process, levels of expectation have been raised about the nature and availability of the service.

It has also been necessary to provide the local infrastructure for the Club – in particular parking space for the vehicles. Continental schemes have in general made use of off-street parking space. The nature of the Edinburgh pilot area does not allow for off-street parking and it has therefore been necessary to define on-street parking space, reserved at all times for Club vehicles. Traffic Regulation Orders were promoted to this effect, with four locations each with four vehicle. Two of the sites are within an existing controlled parking zone, two outwith the zone. Sites have been selected to minimise any reduction in existing parking space available to residents, which might have generated some adverse reaction to the scheme.

 

2. A commercial venture?

Two philosophical approaches to Car Clubs can be identified. Early schemes, and indeed some current schemes in Germany and elsewhere, have been very locally based, emphasising grass roots organisations and localised strategies. This has been necessary for the "pioneering" stage of the concept. On the other hand, a much more commercially-based approach could be taken which focuses much more on market opportunity and business planning. This can provide the investment base that will be necessary for these organisations to grow.

In Edinburgh, interest from business, especially car rental companies, and the risks in terms of public finance that have been described above, led to a decision to develop a partnership with a commercial operator. The Council’s role would be to make available the technology that had been developed; to provide on-street parking sites if necessary; and to help extend the scheme through developing community links in likely areas for growth. The operator would undertake all aspects of operation and management of the scheme; would take all financial risk; and would be free to extend the scheme, and link it to other types of operation, as they felt appropriate.

The first stage in seeking such an operator was to advertise for expressions of interest. Respondents were then issued with a prospectus outlining the nature of the scheme, and seeking proposals to become the "preferred operator" for an Edinburgh scheme. This preferrred operator would be given the benefit of the development work that had been undertaken in Edinburgh, and would have to run the scheme for at least 12 months and provide access to relevant data for monitoring purposes. Beyond this, operators were free to put forward their ideas on how the scheme would be run. Proposals from three companies were received by the May 1998 deadline.

Following a period of negotiation, Budget Rent a Car were selected as the preferred operator on the basis of a 3 year term, to be reviewed after 2 years. A tarriff structure was agreed based on time, distance and the type of vehicle (see Appendix). For rentals over 8 hours, Budget, who already had a conventional car hire service in the city, are encouraging the use of standard car hire vehicles by providing discount rates for Club members on their rental charge. This charge includes delivery of the vehicle to the customer, thus providing the same level of service as for Club vehicles. Budget have also negotiated a 10% discount on season tickets with the main bus operator in Edinburgh, LRT.

The Edinburgh City Car Club was finally launched on 25 March 1999 with 8 cars and 30 members. A simultaneous mailshot was sent to all those who had expressed interest in the scheme.

1. Lessons and problems

As the first scheme of its kind in the UK, a substantial amount of development work has had to be undertaken, and inevitable changes of direction have occurred. This accounts for the long lead-in time for the project - four years from conception to implementation.

There are two key issues that have emerged from the development process that would need to be considered by other authorities wanting to establish or support City Car Clubs in their areas.

The first of these relates to the relationship between three groups that are likely to be involved in the establishment of a scheme: those initiating and supporting the development of the project; the local community; and the operators of a project. These three groups may well have different objectives and expectations of a City Car Club scheme. It is these differences that lead to the variation in approach between the Swiss and German experience.

In particular a decision needs to be made on the extent of user involvement. Are users actively part of the management structure of a Club, or are they customers? City Car Clubs are in effect competing in a highly competitive market - for transport. They therefore need to be able to retain a commercial cutting edge if they are to become a mainstream part of that market. The Swiss model appears to be the most appropriate to achieve this.

The second key issue is the need to establish a realistic business and financial plan. Some of the delays with the Edinburgh scheme were caused by the lack of a business plan at an early stage that would have highlighted the potential funding shortfall and financial risks involved. However, given lack of data about similar schemes within the UK at least, such a business plan is difficult to prepare. Survey work that identifies likely patterns of usage, in addition to membership take-up, is needed, based on different organisational and charging options. These in turn need to be based on the clear view on objectives highlighted above.

 

2. The future

The Edinburgh scheme has only just started, so it is rather early to start thinking about how it might evolve. However, the fact that a car hire company is involved is already a first step towards the type of scheme that is operating in Switzerland, providing an integrated mobility service. Budget has links with an American company, Vipre, that runs "van-pool" services - a common concept in the US - consisting of minibuses linking a workplace with a residential area.

One can envisage a range of ways in which the service could develop bringing into an integrated package of transport choices. For example, it should be possible to provide an integrated payment system for transport covering City Car Club, public transport, parking charges, Park and Ride services and possibly eventually road use charges or tolls, through the use of smartcards. Mode choice can then be made on the basis of time and distance charges without the distortion towards car use that results from the high fixed costs associated with car ownership.

More options can potentially be built into City Car Club, including one way rentals, or open-ended reservations. These would require developments to the technology, but could help the service come even closer to the convenience of the individual private car. It is important that common standards for City Car Club are adopted throughout the country that will allow members travelling to another city to make use of this option in that city.

There is the opportunity for City Car Club to contribute to better air quality. A high standard of maintenance should help immediately, but the use of low or zero emission vehicles could take this further. The structure of the scheme would allow for the relatively easy introduction of such vehicles into the fleet.

Finally, City Car Club opens up options for development that might not otherwise be practicable. In particular, the concept of "Car Free Housing" that is also being tested in Edinburgh becomes more realistic if linked with City Car Club, allowing residents access to vehicles when alternative modes are not suitable. In Hamburg, for example, the developer of a Car Free housing development is providing the occupants with membership automatically.

 

3. Conclusion

The Edinburgh City Car Club has taken 4 years from conception to implementation. It has attracted an enormous amount of media attention, quite disproportionate to the scale of the initial scheme. It has had a genuinely enthusiastic response from the public in the city, and has helped in the process of raising awareness and gaining acceptance for radical transport policies in the city.

If the examples of Germany and Switzerland are anything to go by, it will be a rapid success. It fills a niche in the transport market that is not provided by any other form of collective transport, and may therefore facilitate the provision of an integrated transport system, for cities in particular, that is not dependent on individual car ownership. However, only time will tell whether this will make more than a marginal contribution to sustainable transport objectives. My belief is that it will.