Frugal Urban Drivers Buy Into Flexcar Formula
NEW YORK (AdAge.com) -- Price the cost of car ownership lately?
Even before you get to the guilt of adding carbon emissions to the atmosphere, car-sharing is proving to be an economical alternative for young drivers who have better ways to spend their money.
Flexcar ads urge drivers to "join the transportation revolution."
It's an idea whose time has come.
For a $35 annual fee, members in 12 cities, including Atlanta, San Francisco and Seattle, can reserve and use a Flexcar vehicle parked nearby, paying an hourly rate (about $9) that includes gas and insurance. At the end of their reservation, members park it and walk away, giving new meaning to the term "low-maintenance car."
Flexcar isn't anti-car -- after all, the company owns more than 1,000 of them -- "but we are against the underutilized car," says Mark Norman, CEO, who before joining Flexcar in 2006 oversaw DaimlerChrysler Canada as chairman and president-CEO. "If someone's paying for a car seven days a week and only using it for three, we say there's got to be a better way."
For people who join -- and membership is in the tens of thousands -- the service is "transformational," Mr. Norman says.
It starts when members receive their Flexcar bill. While most people aren't likely to think of per-trip costs if they own a car, they do now. So they begin to make more efficient choices, taking care of multiple errands in one Flexcar trip, for instance, or walking to the corner store.
In fact, members of car-sharing services drive 40% fewer miles annually, according to a study from the Transportation Research Board. That study reports that every shared car in operation takes the equivalent of 14.9 privately owned vehicles off the road.
The result: reduced carbon emissions, a game-changing prospect that snagged the attention of AOL co-founder Steve Case.
His investment fund Revolution Living, which acquired a controlling interest in Flexcar in 2005, backs mission-driven organizations that promote health and sustainability.
Flexcar's mission? "To improve urban living through a revolution in personal transportation," Mr. Norman says.
That goal pervades Flexcar itself, which racked up extra eco-points when it donated funds to nonprofit group American Forests, which planted trees to offset carbon emissions from Flexcar vehicles.
By driving less and by using more environmentally friendly vehicles, the marketer estimates its members decreased fuel consumption by approximately 640,000 gallons, which equated to about 14 million pounds of carbon dioxide in 2006.
But most join Flexcar because it curtails pocketbook emissions. According to calculations from the American Automobile Association, car owners who drive 15,000 miles annually spend about $650 a month to own that vehicle. The average monthly Flexcar bill? $85.
Flexcar's marketing mix, which emphasizes local print, transit and public relations, "appeals to people on multiple fronts," says Flexcar VP-Marketing Joe Dobrow.
The company's message touts convenience and savings first, but "the environmental benefits make [members] feel good about their choice," Mr. Dobrow says. One print headline touts the feel-good factor: "With Flexcar, you can save green in more ways than one."
Others efforts, appropriately, are grass-roots.
'Low car diet'
In 2006, Flexcar recruited about 30 people in each of four cities to go on a "Low Car Diet" that captured local and national media coverage. At kickoff events, the "dieters" pledged to give up their wheels for a month, ceremoniously dropping their keys in gilded lockboxes. Their experiences were published on a website in diary format.
As Flexcar ramps up to expand to more North American cities (it recently put 20 cars in Pittsburgh and has also recently added services in Philadelphia and Baltimore), it is facing competition from similar services such as Zipcar.
The phenomenon has also spread to traditional giants such as Hertz and Enterprise Rent-A-Car, which are offering hourly rentals in New York. But Flexcar is homing in on that burgeoning young driver segment, the student sector, "where a lot of brand loyalty is formed," Mr. Norman says. As the first car-sharing service with a national program for undergraduates, Flexcar has more than 20 university partners, including UCLA, Johns Hopkins University and Emory University.