CarSharing World

Yesterday, I posted about U-Haul’s U Car Share division and the many problems that it isn’t successful. Today, I will finish the post with an interview I did with a U-Haul employee at a U Car Share location, give my thoughts on what went wrong, and go over what they need to do to make things right.

(Photo Credit: Dave Brook)

The Interview

I rented a PhillyCarShare Civic Hybrid and drove out to the nearest U Car Share location on their website, U-Haul Roxborough. I didn’t notice any cars outside when I got there, and thought ‘maybe my hypothesis is wrong, maybe they really are popular’. It would make sense, the area has a lot of twenty-somethings in apartment complexes, several bus lines, and a nearby shopping center.

But after going in, it turns out my hypothesis is right. They didn’t have any cars because that U-Haul doesn’t carry them anymore! Apparently they weren’t renting at all, so they got rid of them. So I set out to the next closest carshare location: Havertown, 10 miles away.

At Havertown, I pull up and see three PT Cruisers outside, with the sunshade in them; at least I didn’t drive out there for nothing. I go inside and talk to one of the employees. The employee has been there several months, and says that s/he only knows of one person who rented it since s/he started, and that was another U-Haul employee. It appears that these cars aren’t moving.

What Went Wrong

After looking at all the flaws, I think it is pretty easy to figure out what went wrong. If I had to guess, it was one, or both, of two things:

1. When coming up with the idea, someone started getting the group excited about ‘cost synergies’ with the existing operation, and how they could save a bundle of money in various ways: Free parking at their U-Haul locations; having employees give out the keys rather than a self-serve fob, saving money by not having to add computers to the cars; by having the cars at the U-Haul buildings, they don’t need to pay people to drive out and wash/clean/maintain the cars; and finally, a “central” location, where people come in and/or pass by all the time.
2. The operation was very underfunded with an initial capital budget or the project manager tried to cut as many costs as possible and minimize risk. That caused the order of PT Cruisers, due to the cheap price. They bought one car, as it is cheaper to maintain one type than one dozen. It is why they didn’t put out money for off-location parking. It’s why they don’t have key fobs, or even a reservation system that will tell you if the car is available in real-time. The lack of marketing also speaks wonders to this operation. It seems as if they thought they could set this up as a barebones operation, and everything else will fall into place.

How to Make It Right

Now that the problem has been identified, the solution is a no-brainer:

• First, make cars available 24/7. Give your members key fobs. By requiring people pick up cars by 7p, you lock out the entire market of those who don’t get off work until 6:30p.
• Reduce the number of cities. Find untapped markets if you can, but you don’t have to. Assuming you have about 75 PT Cruisers, put them in no more than three markets, tops.
• In the new markets, you can keep some at the U-Haul dealer assuming its in a populated area with good public transit. Cluster the cars so that they are all localized but spread out. Place each car by itself, with at least two other cars within 2-3 blocks, grabbing more people.
• Get more cars. Make them anything but PT Cruisers. Buy them in different colors and ask people what they want.
• Market yourself! U-Haul Trucking may be able to get away with a minimal marketing budget because of their amazingly high brand awareness, but in somewhere like Boston or Portland, Zipcar is the U-Haul of carsharing. U Car Share wouldn’t even be considered the Penske of carsharing.  Spend a couple bucks and hype new car locations. Get people interested. Take a look at how Zipcar, PhillyCarShare, et al make their brands hip and fun. U-Haul isn’t fun. I would remove most direct references to UHaul, such as the uhaul.com address in the logo and the U-Haul bar at the top of your website.

In Closing

U Car Share has a lot of potential, it just isn’t focused on how to be profitable, just how to cut costs and use as many synergies as possible with U-Haul. While the solution I present is, admitedly, be more like the other carsharing outfits, it’s true. Zipcar, CityCarShare, etc., have all been around for years, and have a strong formula. UCS’ formula clearly isn’t working, and they have to change that. While it is nice to see the little guy winning for once, it would be a detriment to the carsharing industry to have a national, albeit fairly small, player shut down.

If you want to discuss, criticize, argue this post, talk about it in the forum thread.

Filed under: U Car Share