Robin Chase on the Birth of Zipcar and the Future of Transportation (Part One)
TreeHugger: The rental car people themselves are trying to get a piece of this car sharing market too. Am I right?
Chase: The expectation always was that they would come in. And I have to say that is one of the reasons I was positioning the way I positioned. In that I wanted to make people feel that if they had to choose between Zipcar and Hertz, or Zipcar and Enterprise, that they would choose Zipcar because we were their personal local community service and not a more pasteurized big corporate company. And I would say that Zipcar's branding has taken away that differential.
But we always anticipated that these guys would come in. What is interesting is that they had to come in kicking and screaming because Zipcar really is disruptive. Car sharing is very disruptive, because with car rental you have a minimum 24 hour bundle, and so they have a minimum amount that they are going to sell you. Whereas with car sharing you can buy it by the hour.
From a business perspective they had to break something that was quite favorable to them. And I would say, operationally they are very distinct. We have locations everywhere, and if you live in a city you should be within five locations and a large number of cars, which is quite unlike car rentals.
So then the operations and the management and the pricing are quite different. But yup; they are getting it and as well they should. I believe it is the future.
TreeHugger: Last year you launched GoLoco. Explain how that works.
Chase: Right, so let me link the two ideas up, because it helps people conceptually. The purpose behind ZipCar and the pull for individuals is that when you own your car you are paying for the whole car, even if you are using it two out of 24 hours a day. Or if you live in a city you are not even using it five days out of the week when you are going on your commute.
So that is a huge cost and an incredible excess capacity of this expensive asset. But what we know about ZipCar is that it only works for people who don't need a car to get to work or school. If you need a car to get to work or school you’re going to have to own your own car and pay your own $8,500 a year, which is the average cost in America to own and maintain a car.
So I developed GoLoco because I thought, "What about all these other people that can't use ZipCar, for whom car sharing is not appropriate? What can we do to make their transportation cheaper, more fun, and reduce their carbon footprint?"
So with ride-sharing we can think of the same excess capacity. On 86% of all car trips people are alone in their car. So we can think, "Wow. There are three or four extra seats in that car, and yet it is costing people 56 cents a mile to travel, which is not insignificant as it adds up to more than $8,000 a year."
So GoLoco was and is looking at the rise of social networks; the rise of really nice mapping, email alerts, text messaging, and PayPal. And we realized we could take the ride-sharing to a different place.
Why don't people ride-share more? Well they might be afraid of strangers. Don't ride with strangers. Ride with people that you share the same office with, that you share the same neighborhood with, that you share the same universities with, that you have the same things in common with, that are friends of friends, that are in the same groups that you are in.
So GoLoco added all of those social networking capabilities. You can create groups and have your, "Going to your favorite sports team group," or the, "Shop at IKEA group," or the, "Soccer carpool group," or the, "Going to a conference group."
So we did that. We enabled people to decide if they want to share the cost of the trip and told them that it is 56 cents a mile. If they want to share the cost, we let people arrange that beforehand and pay for it online.
So you don't have to exchange that money in the car. You don't have to promise to pay tomorrow or make change or do any of those things that are unpleasant.
One last piece is we also give people their carbon footprint, so that if you care about how many pounds of C02 your car is putting out, you can divide that cost. We can tell you that you split your cost in half and so you split your carbon footprint in half, and you can feel that, see that, and feel good about it.
When I launched it I expected there was going to be three different ways for people to get into this business or decide to ride-share. One is that they wanted to save money. One is that they want to reduce their carbon footprint. And lastly, that they wanted to spend more time with people that they knew or enjoy being with.
TreeHugger: How is this working in reality? Is GoLoco catching on the way that you had anticipated?
Chase: What I have found is that people don't care about their carbon footprint. It is striking. We have done a number of conferences where it is environmental people going to environmental conferences. And they really would prefer to not share their rides. They can't be bothered.
I think the cost of car travel is too low, and also not in people's minds enough. People are shocked at the price they pay, but they don't believe it. GoLoco has worked really effectively for some sports teams, people participating in those sports and people going to see those sports. They have been sharing the car trips.
To some conferences it has worked very nicely. There are some coincidental nice things were friends find each other and are going to the same places, and that is working. I continue to believe that ride-sharing must and will become a normative way of travel, because car travel is very expensive and getting increasingly expensive.
And in large regions of the country there are no alternatives. So if you have those high prices mixed with lack of alternatives, it will become a normative value. But I don't think we are quite there yet. I am a little bit ahead of the curve.