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From 2009 until early 2013, Denver residents had limited choices when it came to car-sharing services. Three companies, eGo Car Share, Occasional Car and Enterprise Car Share had approximately 50 vehicles available between them.
June 2013 saw permits issued to Zipcar, Hertz 24/7 and Car2Go (a subsidiary of German corporation Daimler AG), which immediately took the local vehicle inventory to more than 400. Car2Go’s Denver Location Manager Mike Pletsch reports that his company alone brought 300 vehicles to the Denver car sharing market when it started operations locally on June 8 of last year.
With the culture of a startup and the support systems, infrastructure and heritage of one of the world’s most successful automotive companies, Car2Go has grown quickly since its founding in 2008 by effectively applying technology and market research.
“Our launch strategy, when choosing a market, is based on density,” Pletsch said. “We seek out dense downtowns that include residential and businesses, where the resident mindset is open to car sharing.”
While typically aimed at millenials, ages 22 to 35, and those interested in the shared economy, Pletsch said Car2Go's Denver user base tends to have a higher average age than some other markets which include the firm’s Austin headquarters, San Diego, Portland, Seattle, Columbus, Washington, DC, Miami, and the Twin Cities, along with Vancouver, Calgary, Toronto and Montreal.
To launch in several different markets, and stay on top of each market and respond to growth in demand accordingly, Car2Go utilizes its team of business developers in Austin to find potential markets and reach out to those cities. Many don’t have a permitting structure in place for car sharing, but in Colorado, all the services are considered rental car companies. The company then looks to build a team, finding local people who know the market, neighborhoods, transportation system and its challenges, and bringing in company veterans from other markets.
“Our biggest challenge is education – people see the cars, and don’t know what they are," he said, referencing an instance when an irate woman called complaining that a Car2Go vehicle was parked on her street, which was against the rules and had to be moved. They explained what car sharing was, and then it became clear that it was her husband who had used the car and parked it there.
The company uses a combination of traditional and experiential marketing, and relies heavily on brand awareness created by their distinctive cars, the Smart FourTwo, with Car2Go branding.
“With 300 cars operating in 46 square miles, we have a lot of visibility,” said Pletsch. “And our events, social media campaigns, and other promotional efforts have also been very successful in increasing membership and utilization.”
Traditional marketing tactics employed includes ads in Westword, 303, 5280 and the Denver Post. Lunch and learn events, where the Denver Car2Go team brings lunch to a company and does a presentation on the service, answers questions and provides a chance to sign up for membership, have also proven effective for the Colorado market.
Strategic partnerships and other innovative approaches have also helped Car2Go find new members and increase utilization by those who have joined. Car2Go is the only company locally offering “vehicle area permits” that permit a driver to park in any Denver public space at no charge. The $850 annual fee per car to the city enables its 300 cars to park in residential permanent parking (RPP) areas and any metered spaces marked for two-hour or longer time periods. “That approach is getting national recognition for how we’re doing it seamlessly.”
Another cooperative approach with the city is in utilizing “found” spaces around town – spots where the 20 feet of curb space required for a metered space is not available, but a 12- to 16-foot space needed by a Smart FourTwo is. Those spots are leased to car share companies at $740/space/year. Car2Go has seven spaces along the 16th Street Mall for those using the mall’s free shuttle, and for visibility. The company has three dedicated spaces at Galvanize, five at Country Club Garden & Towers, and three each at Battery 61 and Cherry Creek and is also working with RTD on a contract to park in ten RTD parking lots across the city.
Denver residents are receptive to car sharing so far, with more than 13,000 having used car share at least once. Total trips have exceeded 115,000, with the average trip being just over five miles and around 36 minutes in duration. A car share vehicle can remove anywhere from nine to 13 personal vehicles from the transportation system, and in some cases many more (Car2Go has seen this number reach 35).
The economic impact of car sharing in Denver is estimated to be $5.8 million in first-year investments and revenue, with ongoing yearly impact close to $1 million, including more than 51 jobs created. Revenues include annual sales and owner ship tax of approximately $77,000 and permit fees in excess of $275,000.
Pletsch said car share services work best in combination with public transportation and bike share programs. He states that many users have multiple car share memberships – for example, one service has a truck, and members will use a Car2Go vehicle to get to the truck, use the truck, then take a Car2Go FourTwo for the return trip.
“We don’t solve all transportation issues,” he said. “But we can be a part of the solution. Public transportation is great if you have access, but you need to get to it to use it, and in some cases, you need to another option.”
Car2Go’s efforts in Denver from its June launch to December of last year was growing membership, and the company expanded its territory in January due to user demand. That, in combination with increasing utilization of current members, and advancing its RTD partnership, are the company’s focus in 2014. This year, Pletsch promises more partnerships with local businesses and organizations to increase utilization opportunities. An expansion to Boulder, interest from Glendale and talks with DIA and airport parking providers are all on the horizon.
“We regularly hear ‘When you get to my neighborhood, I’ll join,’ along with ‘I see your cars everywhere,” said Pletsch. “We look forward to bringing in some other innovative ideas for the platform from other markets, including Europe, and continuing to grow our fleet and the areas we serve based on consumer behavior.”
