British car clubs: changing the way how Londoners commute

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| The European | 5th November 2018
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With ride-hailing firms like Uber, you do not get to sit in the driver’s seat but a membership of a car club gives you the luxury of driving a car of your choice. You, along with other members of the club get to share the club’s cars at your convenience.

 

How car clubs work

 

  • The auto manufacturers partner with local firms (car club operators) or run their own car clubs.

 

  • Individuals and families who want to avail car sharing service become members of those clubs.

 

  • Each club has its own pricing policy; per month, per hour, different rates for the economy and luxury vehicles etc. Fuel cost is included in the pricing plan (no separate charges).

 

  • The car clubs meet the local city government officials to negotiate terms of car parking (parking places, parking rates, parking fines etc).

 

  • Each car club has its own propriety mobile app.

 

  • The core function of the app is to locate the nearest parked club car.

 

  • The car can be locked and unlocked through the mobile app or by a physical card that pairs with the sensor placed inside the car.

 

  • With “key type ignition” model cars, there is a device (which bears similarity to a POS terminal) in which the membership card is inserted. The device recognises the membership card, logs entry and releases the key from its slot.

 

  • The member is responsible for parking the car at the club’s designated parking spaces.

 

  • The member is responsible for locking the vehicle after use.

 

Benefits of car sharing

 

For someone who wants to use a car for only 3 hours in a day (1 hour for going to the office, 1 hour for coming back from office, 1 hour for daily chores) buying a car, paying for its insurance, fuel and maintenance costs makes little sense. Car sharing clubs give you the freedom to drive a car of your own choice at your convenience and at very reasonable rates.

 

The local city government also benefits from car sharing because fewer cars on roads help traffic management.

 

London, Britain

 

According to last year’s information and statistics published on London City government website, there are approximately 193,500 car club members in London and around ten car clubs.

 

London has 33 local government districts. It is a tough task to negotiate separate parking agreements with all districts. This along with the fact that Londoners are not yet accustomed to using car clubs for their daily commute (most members use club’s cars for leisure purpose only) poses a big challenge for the automakers and car clubs to expand their reach.

 

Daimler launched its “car2go” services in December 2012 in London. It could not overcome the challenges and exited from the British market in 2014.

 

Latest News

 

Reuters (2 November 2018) reports:

 

“BMW is expanding its car-sharing service DriveNow into five more London boroughs as the carmaker overcomes some of the barriers to operating across the city where firms need to strike agreements with separate local authorities.

 

The scheme launched in London in 2014 will go from four boroughs to nine with its expansion into Westminster, Barnet, Tower Hamlets, Southwark and Brent, widening its total fleet to 720 BMW and Mini cars in Britain’s capital city”

 

Commenting on this business expansion, Sebastian Hofelich, CEO DriveNow said:

 

“It was always the vision of DriveNow to expand to more parts of London and underlines the great potential that we have seen in this city from the start”.

 

DriveNow was founded in 2011 as a car-sharing joint venture between BMW Group and Sixt (a European car rental company). BMW Group bought DriveNow in March 2018. It is now a wholly owned subsidiary of the BMW group.

 

DriveNow is very popular in Europe. It operates in Munich, Berlin, Dusseldorf, Cologne, Hamburg, Vienna, Copenhagen, Brussels, Milan, Helsinki and Lisbon. It has 6,000 BMW and MINI models available for flexible use and boasts over 1 Million users.

 

Car clubs and automakers

 

The world economy is inching towards recession. Car Club business is “insurance policy” for luxury automakers like Daimler and BMW to survive in difficult times. In fact, those automakers which have their own car club divisions/subsidiaries are the biggest beneficiaries of Car Club business. This business provides them with an additional source of income.

 

Car clubs and London

 

The Mayor of London, Sadiq Khan, has implemented tough measures to control pollution levels in the city. Last year (October 2017) a T-Charge (Emissions Surcharge) was imposed on all polluting vehicles entering Central London. The Guardian (8 June 2018) reports that Khan plans to extend “London’s ultra-low emission zone” in coming years. Car clubs will help to control London City’s air pollution.

 

Transport for London (TfL) is aiming for one million car club members by 2025. TfL’s aim is too low. If London wants to streamline its road traffic and reduce pollution a coordinated effort is required from the office of the Mayor of London so that car clubs can expand their business and reach out to more users.

 

 

 

 

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