P2P Car Sharing Has Just Launched in Spain, an Interview with SocialCar
After car sharing services like ZipCar or BMW's New Car Share that lets you pick up and drop a car anywhere you want, it is no surprise that Person to Person car sharing is growing too. This works a bit like couchsurfing; I have an empty couch, you need a place to sleep; voilà! For car sharing it is the same: car owners can lend their vehicles and make extra cash when they themselves don't need the car. People who need a car for a few hours get one hassle-free; people who own a car but don't use it that much can make extra money and best of all: less vehicles in use is less impact on the environment. Plus you might make new friends in the neighbourhood!
Jaymi wrote about GetAround last year, a service that is currently in beta mode in the US. Meanwhile, SocialCar launched in Spain. I spoke to Mar Alarcón, founder and managing partner at Barcelona-based SocialCar.When did you launch SocialCar and why/how?
We started considering this business opportunity in the summer 2010 and then it took us about a year to make it all happen. The platform that allows drivers and owners to sign in went on-line at the end of June and in late July the platform allowed first bookings to conclude.
We were motivated by several factors: firstly, we are enthused by the challenge of developing a business model that helps car owners and drivers address the issue of individuals having their second most valuable asset sitting idle for most of the time. Secondly, we believe there is a great growth opportunity. Thirdly, we feel that this business links very well with our existing business, Social Energy, a renewable energy engineering and installation company. We believe the photovoltaic industry to be shifting from large ground mounted utility scale installations towards small and decentralized roof top systems. We want to be able to build a community and serve the citizens that prefer a more rational, cost-efficient and environmental friendly consumption of their energy and mobility needs.
Can you give me some numbers?
Sure. We have close to 1,000 drivers and 300 car owners registered since the end of June, spread across the whole of Spain. The first car rental transactions have been concluded in August. The key of this service is proximity: signing in car owners and drivers that live close to each other. We are now in the process of building scale by attracting new sign-ins in order for us to be able to bring proximity to our customers.
What is the biggest problem to overcome running a P2P car sharing service?
The biggest hurdle is certainly the insurance. The Spanish legislation only allows one insurance policy per car and most of the insurance policies restrict the age and driving experience of a potential driver of a car to that of the main car driver, usually the car's owner. On top of that, most of the insurance policies only cover risks related to the personal use of the car. As such, an accident happening under a car rental scheme where the owner makes money out of his or her car would not be covered by most of the insurance policies sold in Spain. To tackle this issue we negotiated a tailor made insurance policy with Globalis, a top Spanish insurance company. Car owners will have to cancel their existing insurance policy and sign with the one we propose. That way, and usually at the same price, owners get full insurance coverage and can make extra cash without worrying.
Which areas or cities in Spain are easier to get to participate and why?
We track traffic to our website using Google Analytics. We have had 15,000 visits to our site in the last weeks coming from more than 125 Spanish cities. Close to 5,000 of our visitors come from IPs registered in Barcelona, and about 3,000 in Madrid. Then come visitors from Valencia, Sevilla, Bilbao, Zaragoza, Mallorca and Gerona. But we also have visitors from villages of less than 5,000 citizens.
We certainly see a lot of traffic coming from urban areas with high Internet penetration. But we have also been contacted by drivers from small towns who mention that our service is of interest to them, because often the public transportation system does not cover small towns very well and not everyone can afford to own a car.
How does SocialCar contribute to the environment?
There is plenty of literature pointing out that car sharing schemes in urban areas in the US and Europe help to reduce the number of cars out on the street. Dense urbanization, with around 75% living in urban areas in Europe, inherently leads to acute awareness of space limitations, road congestion and eco-degradation due to increased road transport emissions. A report by Eurostat and Mobility CarSharing claims that car sharing significantly reduces CO2 emission. For example, a car sharing member can save up to 290 kg of CO2 per year due to a more common use of public transportation in comparison to a private car owner.
Do you think the environmental factor is a reason why Spaniards use SocialCar or what would you say motivates them to do car sharing?
It is our impression that saving or making money is the main reason motivating both drivers and owners to shift to our service. We have placed a saving and revenue calculator in our web page, where drivers and owners can calculate how much extra money they make or save depending on the amount of times they use our service. We can see that this is the page where most of the internet traffic goes.
You say that southern European countries have always been very fond of owning a private car; do you thing the mentality is changing and people will get more and more into PSS (Product Service Systems), not just with cars?
We do not have data to support this view, but we could trace an analogy with real state, where we already see a shift in behavior, particularly in the so called "Generation Y". Whereas more than 85% of the Spanish population lives in owned property, we see that the generation leaving their parents' houses now are choosing more and more to rent instead of to buy apartments. This was not the case 10 years ago, when easy access to credit and a booming economy and low housing prices pushed young people to buy. Now many of these buyers find themselves with a mortgage that is higher than the current value of their property and a much harsher job market. So, if people are des-attaching themselves to the strong rooted concept of buying the place they live in, why buy a second most valuable asset, when you know it is declining in value and comes with fixed maintenance costs?
Is there anything else you think we should share rather than own?
How about all the expensive equipment we seldom use? I am thinking of hobby bicycles, trekking equipment, photo cameras and so on. Might it be a good idea to rent them to someone in your neighborhood and make some money when you are not using it?
An example of the kind of PSS Mar envisions is Portland's Tool Library, but I totally agree with her that there is room for much more stuff to share. According to the article Michael wrote, car sharing is predicted to grow in the next years. "In 2016 there should be about 4.4 million members in North America and 5.5 million in Europe." Living in Barcelona, where parking space is tight and public transport like the Bicing bike sharing can get your nearly everywhere, I can see how P2P car sharing might just be the system necessary to fill some gaps. With SocialCar it can cost me as little as 30€ to borrow a car for a day, with no extra costs or paperwork. Let's hope my car-owning neighbours are signing up soon too!