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The previous two articles have provided information regarding business-to-consumer, B2C, and peer-to-peer, P2P, car-sharing services. Part III of this series will provide information regarding not-for-profit or co-operative, N4P, car-sharing services. At the end of this article, a comprehensive summary will be drawn considering all of the information this series has compiled.

N4P entities follow the B2C model for the pricing of their service rates and plans. N4Ps typically provide a comprehensive lower-cost service. These entities are provided incentives through government funding, partnerships with transit and/or other non-profit entities to provide car-sharing services. Many of N4Ps came about through "grass-roots" movements and tailor their services for specific cities and neighborhoods.

Where information was not received in a timely fashion, a not applicable (N/A) was inserted. This list is meant to provide a general working idea of the N4P car-sharing market and does not represent every global company with N4P car-sharing operations. All numbers and data herein have been sourced where appropriate and it is important for all readers to consider the data in this article as estimates.

I-GO CarSharing

Formed in 2002 as a pilot program of the Center of Neighborhood Technology, IGO provides car sharing services in over 40 neighborhoods in Chicago and five suburbs throughout the Chicago region. A typical IGO member spends about $2,520 per year on transportation, roughly $5,000 less than what the average American spends annually to own, operate, and maintain a car.

IGO offers the Chicago Card Plus IGO card with the CTA. It allows a seamless transfer between public transit and an IGO vehicle. The Chicago Card Plus IGO cards is the only one of its kind in the nation. Seventy-three percent of IGO members either sell a car or postpone a decision to buy one after joining IGO.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - Chicago
  • Number of Members: 15,000
  • Number of Vehicles: 300
  • Number of Vehicle Locations: Roughly 200
  • Rates & Plans: Free to $15-$30 six-month monthly commitments, rates from $6.75-$12/hour, $48-$93/day depending on vehicle type and plan; 150 miles included ($0.40 per mile thereafter depending on rate plan); gas and insurance

Data is derived from the IGO CarSharing website - 8/30/2012.

City CarShare

Founded in 2001, City CarShare is the only nonprofit car sharing service in the Bay Area. The company provides convenient, affordable access to car sharing to reduce car dependency and to provide a measurable impact in the way communities develop.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - San Francisco Bay Area
  • Number of Members: Roughly 15,000 (as of April 2012)
  • Number of Vehicles: Roughly 325
  • Number of Vehicle Locations: Roughly 215
  • Rates & Plans: Application fee $30, membership annual service $10-$50, rates from $5-$11/hour, $45-$72/day depending on vehicle type and plan; mileage is charged $0.10 per mile and $0.40 per mile depending on rate used; gas and insurance

Data is derived from the City CarShare website - 8/30/2012 and other sources as identified.

Modo the Car Co-Op

Modo is a member-owned not-for-profit co-operative. Founded in 1997, Modo was the first car sharing co-operative in North America and the first English-speaking car sharing service in the world. The company is also a founding member of the international CarSharing Association.

  • Car Sharing Type: N4P
  • Cities/Regions Served: Canada - Metro Vancouver
  • Number of Members: Roughly 10,000 (as of January 2012)
  • Number of Vehicles: Roughly 270
  • Number of Vehicle Locations: Roughly 230
  • Rates & Plans: Registration fee $20, $50 annual fee depending on membership, one-time $500 refundable shares purchase depending on membership, rates from $3-$7.50/hour, $36-$60/day depending on time of day, and plan; 150 free kilometers, $0.15-$0.40 per kilometer depending on plan; gas, parking, and insurance

Data is derived from the Modo website - 9/5/2012 and other sources as identified. All currencies are converted using Yahoo Finance.

eGo CarShare

eGo CarShare is a local non-profit car sharing organization, serving the Boulder-Denver metro area. eGo was started by a group of Boulder citizens concerned about minimizing their environmental impact.

The organization was incorporated as a Colorado non-profit on August 28, 1998. Boulder CarShare rebranded in January 2009 as eGo CarShare and in March 2009, placed its first three cars in Denver and has expanded to core Denver Neighborhoods.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - Denver and Boulder
  • Number of Members: 2,550
  • Number of Vehicles: Roughly 36
  • Number of Vehicle Locations: 36
  • Rates & Plans: Monthly fee $0-$10, rates from $2.50-$6.50/hour, $49-$75/day, mileage charges from $0.30-$0.45 per mile depending on vehicle and plan; gas and insurance

Data is derived from the eGo CarShare website - 8/30/2012.

HOURCAR

HOURCAR is a program of the non-profit Neighborhood Energy Connection. The NEC pioneered car sharing in Minnesota in 2005.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - Minneapolis and Saint Paul
  • Number of Members: 1,700
  • Number of Vehicles: 37
  • Number of Vehicle Locations: 30
  • Rates & Plans: Monthly membership from $0-$15 per month, rates from $6-$8/hour ($3 per hour off peak), $55-$75/day depending on vehicle, time of week, and plan; 100 daily free miles ($0.25 per mile thereafter); gas, parking, and insurance

Data is derived from the HOURCAR website - 9/4/2012.

Ithaca CarShare

Ithaca CarShare is a local nonprofit with the mission of enhancing community access to transportation while reducing negative environmental and economic impacts. The service has been operating since 2006.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - Ithaca
  • Number of Members: Roughly 1,300 (as of August 2012)
  • Number of Vehicles: 21
  • Number of Vehicle Locations: 21
  • Rates & Plans: Monthly cost $6-30, rates from $4.95-$7.95/hour, night rates from $2.50-$4.00/hour, $49.50-$79.50/day; $0.30 per mile; gas and insurance

Data is derived from the Ithaca website - 9/8/2012 and other sources as identified

CarShare Vermont

Founded through the community in 2008, CarShare Vermont's mission is to provide an affordable, convenient, and reliable alternative to private car ownership that enhances the environmental, economic, and social wellbeing of Vermont's region.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - Vermont
  • Number of Members: 700
  • Number of Vehicles: 11
  • Number of Vehicle Locations: 9
  • Rates & Plans: $5-$15 monthly fee ($50-$150 annual fee), rates from $4.95-$6.95/hour, $49-$69/day depending on vehicle and plan; $0.15 per mile; gas, parking, and insurance

Data is derived from the CarShare Vermont website - 8/30/2012.

Grand River CarShare and Hamilton CarShare

Grand River CarShare and Hamilton CarShare is a single non-profit co-operative which provides its members access to vehicles on a self-serve, pay-per-use basis. The co-operative was founded in 1998 and operated first in Kitchener-Waterloo, adding service to Cambridge in 2007, and Hamilton in 2009. Expansion to the Niagara region has recently been undertaken. Eventually, all three car sharing services will be branded under the Community CarShare name.

  • Car Sharing Type: N4P
  • Cities/Regions Served: Canada - Grand River, Hamilton, and Niagara regions
  • Number of Members: Roughly 650
  • Number of Vehicles: 20
  • Number of Vehicle Locations: 20
  • Rates & Plans: Application fee $30, key deposit $10 (fully refundable), membership loan $10-$700 (fully refundable), annual fee $40-$480, rates from $4-$10/hour, $30-$70/day depending on plan; 100 kilometers free daily ($0.30 per kilometer thereafter); gas and insurance

Data is derived from the Grand River CarShare and Hamilton CarShare websites - 8/30/2012. All currencies are converted using Yahoo Finance.

Victoria CarShare

The Victoria CarShare Co-operative has been providing transportation alternatives to the Greater Victoria Area since 1996 as a part of the rapidly-growing worldwide car sharing movement.

  • Car Sharing Type: N4P
  • Cities/Regions Served: Canada - Victoria Area
  • Number of Members: 500
  • Number of Vehicles: 22
  • Number of Vehicle Locations: 21
  • Rates & Plans: Cost to join $0-$700 (fully refundable), annual membership $0-$180, rates from $3.10-$8.50/hour, $33-$60/day depending on plan; up to 150 kilometers ($0.20-$0.40 per kilometer thereafter); gas and insurance

Data is derived from the Victoria CarShare website - 8/30/2012. All currencies are converted using Yahoo Finance.

CuseCar

CuseCar is a not-for-profit, community based car sharing program that provides its members round the clock access to a fleet of environmentally friendly vehicles on an hourly basis.

  • Car Sharing Type: N4P
  • Cities/Regions Served: United States - City of Syracuse
  • Number of Members: N/A
  • Number of Vehicles: N/A
  • Number of Vehicle Locations: 9
  • Rates & Plans: Monthly cost $18, rates from $5.95/hour, $29-$68/day; 60 free miles; gas and insurance

Data is derived from the CuseCar website - 9/5/2012.

Other Car Sharing Companies to Note:

Buffalo CarShare - United States

Not-For-Profit Key Points

Based on these estimates of the above entities, there are roughly 48,000 N4P members in the U.S. and Canada. During this preliminary research and review, there were no leads to N4Ps in Europe or other countries. The research will be revisited more extensively to take a closer look at other countries, such as Germany for instance, where the car-sharing market is very fragmented.

In the U.S., the leading N4P car-sharing entities are I-GO Car Sharing in Chicago and City CarShare in San Francisco, both with 15,000 members. Modo the Car Co-Op has the third largest number of members in North America with 10,000, and is the largest N4P in Canada. By comparison, these three N4Ps fall within Zipcar, Inc.'s (ZIP) third-tier competition category for traditional B2C companies. However, as N4Ps are local in nature, their relative competitive impact may be higher. Financial operations were not publicly available.

Car Sharing Summary

The goal of these three articles has been to provide a comprehensive review of car-sharing services globally. By structuring car-sharing services into three categories, investors have gained a general sense of what companies are involved and the scale of the market.

The 2010 Frost and Sullivan report has provided a target of growth for the number of car-sharing members and revenues generated by the car-sharing market. This report has been cited on many occasions regarding the prospects for car sharing growth within North America and Europe. The report claimed that car-sharing programs would grow from just under one million members in 2009 to just under 10 million by the year 2016.

Recent Frost and Sullivan publications on August 9th and 22nd of this year, focused on Europe, claim that by 2020 there will be more than 200 traditional car sharing organizations, CSOs, and an additional 24 P2P CSOs allowing for 14 million members within Europe.

As the initial car-sharing report by Frost and Sullivan was published in 2010, we can look at their interim year car-sharing member estimate for the year 2012 and compare this to our three-part series conservative car-sharing member estimate. By 2012, the Frost and Sullivan estimate for car-sharing members was around 2.5 million. The research generated from these three articles has provided a conservative estimate of roughly 1.6 million car-sharing members, 35% lower than the Frost and Sullivan data. Applying this factor to the 2016 car-sharing estimate would yield just under 6.5 million members as compared to the roughly 10 million from Frost and Sullivan. Factoring in these adjustments still suggests a 41% compound annual growth rate over the next four years.

Similarly, the Frost and Sullivan report suggested that by 2012, there would be roughly 1.3 million car-sharing members in North America. Based on this past week's fourth annual car sharing conference, there are roughly 900 thousand car-sharing members in North America as of July 2012, 31% lower than the Frost and Sullivan data. Applying this factor to the 2016 North American car-sharing estimate would yield just over 3 million members as compared to the roughly 4.4 million from Frost and Sullivan. Factoring these adjustments suggests a 36% compound annual growth rate over the next four years. Between 2000 and 2010, North American car-sharing membership has grown 70% per year. Between 2002 and 2012, North American car-sharing membership has grown 49% per year.

The data that has been produced within these three articles has also been incorporated into a spreadsheet which will continue to monitor growth for these companies on an interim basis, as well as add additional companies and information as it becomes available.

Conclusion

These three articles have provided insight into the structure of the car-sharing market. We know that there are a variety of companies who are engaged in this market aside from B2C, P2P, and N4P independent car-sharing companies including car rental companies, major auto manufacturers, and even major transportation and logistics companies. We know that there are traditional car-sharing models such as Zipcar, and that some of these models have adapted to serve different trip needs such as Daimler AG, (OTCPK:DDAIF) in Car2Go, and BMW and Sixt AG (OTC:SIXGF) partnering to form DriveNow. Other auto manufacturers including Ford Motor Company (F) last summer and Honda Motor Company (HMC) this past summer, have partnered within the car-sharing market through Zipcar in the U.S. to market specific vehicles to younger potential buyers at universities. We also know that there are many locally-driven policies that play a major role with promoting car sharing. The City of San Francisco may be one of the most progressive car sharing cities in the U.S.

While the primary competitor to car sharing remains to be private vehicle ownership, there are new approaches to appease a variety of consumption factors for vehicle ownership including development of electric and hybrid vehicles, P2P car sharing, as well as other policy-driven transportation methods such as flexible work schedules and integrated multimodal transportation systems. There are many local agencies across the nation within major metropolitan areas who will be looking to incorporate successful strategies into policies. With the combination of a retiring baby-boom generation, and a shift in consumption preferences with younger generations, there will be impacts to vehicle ownership preferences and demand.

Zipcar's most recent earnings report displayed a 21% year-over-year growth in members. It also displayed an 18% year-over-year growth in U.S. established market members including Boston, New York, San Francisco, and Washington DC. This compares to 23% year-over-year growth in the first quarter of this year, and 25% year-over-year growth for last year for all Zipcar members.

A review of the historical trends versus the revised forecasts from Frost and Sullivan suggests that car sharing growth is slowing. However, growth remains robust on an annual basis when considering North America and Europe. Additionally, these membership growth statistics do not account for South America or the Asia-Pacific region.

As investors, we all know that growth is never perfectly linear with a positive trend. There are many variables involved with car sharing in general that will impact the future developments of the market. There are certainly risks for Zipcar as the current market leader. Competition is increasing with no signs pointing to a slow down. However, Zipcar has produced a profit over the past twelve months and is on pace for its first profitable year of performance in 2012. Zipcar has positioned itself to benefit from strong growth in Europe with operations in the United Kingdom, Austria, and Spain. There will continue to be excellent expansion opportunities including Canada, Germany, and Australia among other areas.

For Zipcar to be successful, the business will need to be capable of attaining consistent profits and free cash flow. These components will be key drivers for making future acquisitions to continue to scale the business versus the competition. This will also leverage further organic growth into existing and future markets. With auto manufacturers entering the car-sharing market, speculation regarding a Zipcar buyout could be become a reality. As of October 4, 2012, Zipcar currently trades at 1.4 times book value and has a market capitalization under $310 million. This could put a potential buy-out price anywhere between $500-$600 million, especially if profit and cash flows improve.

Ultimately time will tell which way Zipcar goes along with the car-sharing market. Key trends to consider as the next two quarterly earnings reports edge closer include:

  • Membership growth including a breakout of established markets
  • Usage revenue per vehicle per day
  • Cost per new account
  • Average monthly membership retention
  • Revenue growth by geographical segment

Analysts are looking for 23% year-over-year top line growth and a penny per share in earnings for the third quarter, which seasonally is Zipcar's strongest quarter.

Source: Zipcar Versus The Competition: A Comprehensive Perspective On Global Car Sharing Part III