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Carsharing Interview

Serious CarSharing: (pages 1-3 of 13)

Interviews with Carsten Petersen & Markus Petersen, 
founders of Europe's largest car-sharing firm, STATTAUTO Berlin. 
From RAIN Magazine, Volume 15, No. 1

By Danielle Janes & Greg Bryant 
(representing both the Eugene Car Co-op & RAIN)

DJ: Does car-sharing work in all situations?
CP: STATTAUTO has tried doing car-sharing in the outer areas of Berlin. In Spandau. Twice. Some people there want it, but we weren't able to get enough... you need at least 30 people to open a station [of 2 cars and a check-out system]. Why? Where public transit is not good, people have difficulty getting to work in a reasonable time. In this case, you just can't do car-sharing. Maybe then you should switch over to the political level to establish a good public transport system.

DJ: At what point did you add bus passes?
CP: In 1991, when we got the new safe system. In the beginning, we only had a normal safe system that could be used with a key. After that we had about 500 people and figured it would become too anonymous. So we developed the safe system with the [magnetic] access card... here, I'll show you the mobile card. One side was our side and for paying taxi rides; the other side was for bus pass stickers.

DJ: Do you get the pass in the mail if you're a member?
CP: No, not yet. Right now it's basically a symbol that connects the two. We could buy 2000 bus pass stickers to give to our members, which would be economical for the bus company. But BVG is really an elephant, so maybe next year.

DJ: So not all the members have the bus pass sticker?
CP: I don't know. In the summer, some people don't get a pass. Anyway, then we step by step added the taxi and trains to the Mobile card.

DJ: Does that mean members get billed monthly for their taxi use? What can you do with the Mobile card?
CP: You can use STATTAUTO, get a BVG bus pass, ride in a taxi, get railway tickets by phone and charge it to your Mobile card. In autumn 1995, we will have another thing: a delivery system by which you can get food delivered from the grocery store. Many people did not want to join STATTAUTO because they wanted to drive to shop for food. Many parents can't carry all the food by bus or foot. But the delivery service will be only for organically grown (Biological) food, and only food that comes from the local region. This comes from special shops here called Brandenburg shops, created by an organization that helped local farmers after the falling of the wall. Also, we wanted to increase awareness that buying local food helps the environment.

DJ: Tell me about the requirement that members not own cars.
CP: In the beginning, we said that only members could join if they did not own a car. This was to avoid people having more cars than they had before joining. Everyone, especially the media, was very interested in that point. In the contract, people had to say that they don't own a car. Everyone thought his was an important ecological and political point and we were very fond of the point because everyone applauded that point. But after a year we realized it was really an idiotic point, because if you own a car, why would you pay 10DM per month to use another one? So you must not forbid it... it's an empty law. We gave up the point. I realized that everyone was so fond of this point, that moral systems are in a way very strong and but also completely useless. People love to be moral even if there is no point to it. It is really strange. So we changed our marketing. We stopped saying you have to get rid of something, and started to say we offer you something.

Our segment in the market really changed from the beginning when we had very ecologically advanced people, young, highly educated, who really thought about things. And now we are getting to the more normal people. We really have to do that, because ecological people usually don't have a car anyway. So we really want normal people. We just want to reduce the cars.

DJ: So if I were to become a member, what kind educational outreach do you do?
CP: The education is done by economic forces. If you're a member, you will use the car when you need it. You will see on your bill that one drive is pretty expensive, and not driving is cheap. If you own a private car, it is just the other way around: car owning is pretty expensive and car driving is cheap. Most of the costs of the car is in buying it, losing the worth, paying taxes, and insurance. The most important thing is the loss of worth each month. If you buy a car it loses 300DM in one month, just being parked. You have 300DM less in one month. And you can drive pretty far with STATTAUTO for 300DM... and you don't have the stress, you don't go to the garage, you don't do anything. You just drive. When you drive it is pretty expensive but when you go by bus it is very cheap. So after you get your first STATTAUTO bill, people who had private cars will phone and say I never thought that STATTAUTO was so expensive! We tell them, we told you and you had the price list and car driving is a luxury. Drive less and you'll pay less... and then they do. This is the educational process.

DJ: So, no education about bus or train schedules?
CP: No. We don't have time. There people in Cologne do this, but they get money from the city. And it is really not necessary. Why should the people call you if there are bus and train employees whose job it is to tell you the schedule?

DJ: Tell us about your members' group.
CP: They don't do very much. Sometimes they have monthly meetings, but last month, they didn't meet. We had a meeting for all of them four weeks ago, because we have a contract with the users that when we change prices we have to ask them. And once a year, we ask them and then it is always a big discussion.

DJ: Do you lose members every time you raise prices?
CP: Yes, because there are 3 possibilities to raise prices. Either you raise 1) membership fees, 2) time charges or 3) kilometer charges. Every year you hit somebody too hard. This year we raised the membership fees and now people are quitting who drive very, very little. They are members because they want just the possibility of using the cars. Of course this possibility is worth something, but if the price goes up... .

The new membership fee is 14DM per month. Last year, we raised kilometers fees. Then the people who drive long distances quit, because they can go to a normal car rental company. And the year before, we raised the time charges, and then the people going for short distances quit. So however you do it, you lose somebody.

DJ: You haven't found the best one to raise?
CP: Switch from year to year which you raise. Of course, every year you have to argue to get the increase. We said this year that the density of the stations is much better. People really have the station close by and the stations are really expensive. You have to pay for the parking space and the cost is there whether people drive or not.

DJ: What is the joining fee?
CP: It is at least 800DM and you get it back when membership ends. And yes, we raise that as well. We tried to raise it to 1300DM once, so we could get rid of debts. But this was too much for people, no one joined. A new member can pay 800DM but gets no interest on his deposit, or he can pay 1300DM and get 3.5% interest or if he pays over 1600DM he gets 4.5% interest. In the mixture, some people have that much money, and one doesn't get those kind of interest rates elsewhere.

In the beginning, we took out 11% loans from the banks. So 4.5% is a lot less and it is much better for us. And there is a political movement against banks in Germany because of their involvement in arms and war. We are kind of a green bank. People know it is better to give their money to STATTAUTO because of the members' association and because the financial books are very open.

DJ: How is STATTAUTO structured?
CP: As a GMBH, which is like a limited corporation. If STATTAUTO does some big mistake like not filling the brake fluid, any lawsuit would be paid by the company, not individuals. With 130 cars, things happen. In Germany, limited corporations must have 50,000DM for protection to use to pay off any harmed party... you don't have that in the U.S.? (DJ:) No. (CP:) Well, that is pretty unsafe for the public! This corporation is owned completely by me and Markus. Users have a Registered Association, and they can be a member of that. You can be a participant in the corporation and a member in the association. If you're a member in the association, you can vote in the yearly meeting, and make general decisions monthly. You decide important questions like: what cars we want, how/if we take on a food delivery service because it costs money and I have to organize it and it takes time and everything. Some said no on the delivery service because it might take business from neighborhood stores, but others wanted it because of the organically-grown food.

There is a contract between the corporation and the association and in this contract are 3 essentials:
1. Open books for the association monthly and yearly.
2. The corporation may not change the prices and the kind of usage without asking the member association.
3. No part of the corporation is to be sold without asking the association.
So they have pretty big rights in the corporation. We think this is important. They are better with our cars then with a rental agency like Hertz's or Europcar's cars.

Only about 1/4 of the participants are members of the association. Total association membership is 400. At the last annual meeting there were 80. At the monthly meeting, 10-12 really interested members attend: those that often work in transport or political, green party activity. So you see the interest is not too big. For the members it is important to have the security that they could look in the corporation's books. But they never do. This is a virtual thing. But they have more rights.

DJ: How quickly can I become a member?
CP: You could phone and there is an answering machine where you can leave your name and address. And then we send you a letter. The first step is we send you a letter and a brochure. Then you know how the system works and where the stations are. Every week, we have 2 days when people can come to a meeting to learn about the system. Which takes about an hour. There are always about 10 to 20 new people who come, and they learn about everything and the next day they can start using the cars.

DJ: Can I come to your office and join any day?
CP: No, you always must come to one of the twice a week meetings to join. Because we don't want to have to explain it all day. We have other work, so we only have 2 days a week. In the beginning, it is not as convenient as other rental agencies, but then after the first meeting you never have to come again. You only have to come once. And then it is much more convenient, of course.

DJ: How did you first begin working with insurance companies to do this? What was the system before and what is it now?
CP: This is not very difficult. In the beginning, it was the same as a car rental so they knew that system. We had to pay the same fees. And after some years through the European CarSharing Association (ECS), we managed to deal with them, so that we can take over the private insurance contracts of the people (participants) which is much cheaper. So we pay very little now. For the insurance company it is ok because the accident rate is much lower with our people than with car rentals. Of course, the insurance is lower as well so you don't have to pay much. So it is not very complicated.

DJ: I know with Auto-com Quebec, they used a local insurer and got a per kilometer rate, so they only pay when the cars are being used.
CP: That is not possible in Germany. The industry is very regulated.

DJ: Do you have all new cars?
CP: Yes. After 2 years they get sold. In the ECS car-sharing standards, you have to keep the cars for more than one year.

DJ: We are creating a North American CarSharing Association [NACSA]... (GB:) So, what is European CarSharing organization's (ECS's) history?
CP: ECS was founded in 1991 in Switzerland. At that point, car-sharing was much stronger and wider in Switzerland than in Germany. And now we have 35 organizations that are members in ECS. They come from Switzerland, Austria, Germany and the Netherlands. ECS established ecological and social standards for car-sharing. User control of the car-sharing corporations is fixed in the standards. So you have to do this. We did this, of course, to exclude Avis. We knew they would never do it. ECS wrote the International Standard Organization (ISO) to define what car-sharing is and we will fix it so that you must have user democracy. If we can do this, Avis can't say they are doing car-sharing... and car-sharing is pretty famous right now.

Normally ISO is for products not services... now it is open for services, as well. We tried to come with ECS standards to the ISO. Now we are the most advanced car-sharing organization, so maybe we have the power to come in and really establish an ecological standard not just a financial standard, not just a service definition. Normally services are described by how you do them, but we want to describe the ecological or social issues.

DJ: We'd like to adopt your standards...
CP: Of course. It says in our ECS standards.
1. You have to keep the cars for more than one year. So you cannot become a hidden car selling organization like Europcar, that just takes the cars and sells them after 6 months. It is owned by VW, and Avis is owned by Opal/GM, so they are just selling organizations. They never earn anything out of car rentals. They buy for 30% discount off the list price, and after half a year it is still worth the list price and then they sell it. And we don't want to do that so you have to keep the cars for more than one year.
2. You have to have user democracy.
3. You have to allow hourly rental.
4. You have to charge for every kilometer or every mile. You can't say 500 km are included in a price which is normal for car rental agencies...

The ECS did other things: like make contracts with the insurance companies and make a contract with Opal-GM for buying cars at better rates. And ECS communicated with people like you in the US, Scandinavia, Japan and all over to spread the idea. The first aim of ECS is to spread car-sharing. And we had the contract with the railway system for an ACTION WEEK in Germany. This was a contact to other mobility systems... another important aim of the ECS. We want to do another ACTION WEEK in Autumn 1996 again with the railway system, but this time not only in Germany, but in Switzerland, Austria, and the Netherlands, all in one week. The railway companies are interested and they will finance it again.

Using cars from other city [car-sharing] groups was organized from the beginning. For every user it is important. We are not a big company all over Europe like Avis. We are local. It was not so easy because of insurance... so we built a special contract with a lawyer. Members do this very often. They call us and we make sure the car is waiting for them in the other city. The billing is done via the companies, not via the user. So if a Berlin user wants to drive in Cologne, he phones us and we fax to the Cologne people saying Mr. X is coming. He drives the Cologne car and the Cologne car-sharing group charges STATTAUTO Berlin, not him. Wecharge him, because we know him. If he doesn't want to pay, we can do something. Cologne doesn't know him and it would be very difficult for them to reach him and get the money. And for the consumer/user, it is better to pay it in the normal bill. He has one mobility bill with the railway tickets, taxi rides, and the use of the car in another city.

DJ: How do users pay?
CP: Most users allow us to take the money from the Postbank or bank. If they don't, they get a normal bill. It is not a big problem because we have 1000DM of theirs [the deposit]. We always have something.

DJ: If they don't pay, their membership gets cut off and you take it out of the deposit?
CP: Yes, of course. Next time they want to call, the reservations people tell them they are no longer a member.

DJ: How do you take care of the cars?
CP: We have 31 stations now in Berlin and at every station we have one participant who takes care of the car. He fills out the kilometer sheets and sends them to us. He washes the car weekly and looks after the car. He is a participant who lives very near, so he can look when he goes shopping or something. And he gets a little money for that, 60DM per month per car. He has a list every week of what he has done, and he looks after the oil and all that. When a car has damage he just phones us. Twice a year, he brings the car to a garage for a general check-up. He is not to do much, but he is there to inform us. And we pay him directly, we don't take it off his bill.

DJ: How often are the cars stolen?
CP: Very seldom do our cars have accidents where we don't know who was at fault. We had one car stolen. It was stolen by a member. We know it, but it wasn't possible to prove it. The border police saw him, but the thief said he had brought it back. We had the key. He imitated the key and then put the original key back in the box. So it was normal stealing to the insurance company. So we got the money. But we know he did it. So the car is in Poland, and we never got it back. Now it is better because we have this [magnetic] access control card, so you can't take the key without being known. So now it is not a problem.

DJ: How often are there accidents?
Every day ... no not every day. But at least two a week. We have 2-3 technical employees that deal only with that.

DJ: Two accident per week, isn't that overwhelming?
CP: We have 10 people working for us. The software helps a lot. You should have the software. And we send the cars to a garage, we don't repair them ourselves! There are about 150 movements at any time: safes, cars, sheets, station watchers ... In the first three years, we went up to 20 cars without any software.

DJ: What kinds of things are in the cars?
CP: Nothing. But you can get a baby seat or roof rack for bikes out of the station box near the car. At one station right now the station chief has to get these to the members. The city doesn't help much with space for these things.

DJ: Do you have work bicycles? Do other cities?
CP: Yes... two. Nobody uses them. We have 2 boxes for the workbikes, but they are not used very often. This summer, we are getting a third. We don't charge anything for them. They are good for shopping, but normally not heavy loads. Maybe they're good for open markets. People don't need them. They are pretty heavy things. All participants in STATTAUTO have their own bicycles with racks. It is too complicated for people to use the big workbikes. No other groups have bikes as part of their program. In Berlin, we have many grocery stores, so shops are never very far.

DJ: Auto-com Quebec has 3 different types of membership... long distance and frequent users pay differently. What do you think of that?
CP: I'd never do that for economical reasons. Because we earn our money with a mix. The most money we earn is from people who drive long distances. To take a car for one hour and drive 5km, we earn 5DM and the effort we have to make is the same as if someone takes the car for 3 weeks and drives 5000km. Short distances are just a service. It is a very important marketing instrument. Of course, because people are used to taking the car for 2 hours shopping, and because it is so convenient, they take us as well for holidays. Even if it would be more economical to switch to another rental company, people don't.

DJ: Auto-com appears to be telling members, if you go over a certain amount, you should switch to another company. What do you do with everyone wanting the car on the weekends? How do you limit use?
CP: Never put any limitations on car use. You want it to be as convenient as a private car. The virtual reality of a car is much more important than the reality itself. This is a virtual product. German cars are used one hour a day. I know it. German cars are used one hour a day and stand around 23 hours. But people really love it, to have it in front of their houses, not to use it but to be able to have the possibility. They really pay a lot for not doing, but for being able to do. As a car-sharing group, you sell virtual reality. You have to. This the worth of the car.

So, you never start with one car: at least two. Because when you have 20 or 30 people you have a better chance that the people don't always want to go on Saturday and Sunday because you'll have a mix of students and seniors and so on. The bigger you are, the better chance you'll have.

In the beginning, to avoid the problem of everyone wanting the car on the weekend, of course you have to try to have contracts with companies, to balance. And so we have special offers: 20% cheaper than the normal price. These member companies can use the car from Monday morning to Friday noon, but not on weekends.

DJ: What kind of companies join STATTAUTO?
CP: Bakeries, groceries, architects, urban planning bureaus, journalists. Mostly little companies working with 5-10 people, not big companies because they have their own cars. Small companies don't really need their own cars. For example, an architectural firm has to bring plans maybe, and then once a week moves something big. And we have another system, a price system to balance usage. It is cheaper in the morning than in the afternoon because more people have time in the afternoon. So poorer people, who may have more time, do their errands in the morning.

DJ: How did you approach Opal/GM to get a discount?
CP: We checked all the dealers in Berlin for the best discount for buying 30 cars a year. And we went with the one that gave the best rate. By chance most of the car-sharing organizations in Germany came to use Opal. Opal builds some cars that have weak motors and therefore are more ecological than other companies. When there were so many car-sharers using Opal, we got a general contract discount up to 80% of the price. We buy 100-150 cars each year in the German network.

GB: Can people outside Germany use the German network's relationship with Opal?
CP: No, because of import/export things. Maybe Austria, because it is in the European Union, but not Switzerland. Austria only has 25 cars so they can't reach the same discount. They are in 10 cities, including Salzburg, Vienna, Graz, Linz and Innsbruck. But in Switzerland, car-sharing is very strong.

GB: When you help new groups start-up, what are the common problems, and solutions?
CP: Now when we establish a new group it is very organized. We have 4 things to offer:
1. Computer software. We go and install it and teach them to use it. When you teach the software, this covers most of the problems.
2. Safes with electronic access control. We explain how it works, how to repair them and how to use them.
3. A box of 100 formulas, contracts, everything written down, everything you need for the people and the organization. So that you have control lists and everything you need.
4. Teaching. Three times for 3-4 days over the course of 3 months, we go and teach them. So you have 2 phases, one pre-start and one starting. So after 10 months, the thing runs, and they learn how it works - parking spaces, insurance ... and it works pretty good.

In the beginning, we couldn't offer a real schooling or teaching because we ourselves didn't know how it worked. So we just went there one afternoon and explained how to do this and that, and then they had to have their own experiences... so it took them 3 years to get running.

-- end of page 6 of 13 -- to be continued.