Car Sharing Holds the Road in Germany

Use of a vehicle by multiple households began as an idealistic endeavor, but these days it is maturing into a sophisticated, for-profit business.

By Mary Williams Walsh, L.A. Times Staff Writer
Thursday, July 23, 1998

RAEFELFING, Germany -- Everybody knows that cars and suburbs go together. Be it Bavaria or California, if you want your own suburban Shangri-La -- the house, the lawn, the barbecue grill -- then you need wheels. Maybe two cars. A double garage. And all the bills and hassles that go with car ownership.


Well then, what is Christa Muggli doing here in the leafy Munich suburbs, relaxing of a summer evening with no car in sight?

Muggli sold her car four years ago and says she gets around fine without it, thank you. A dedicated environmentalist, she commutes to her Munich teaching job on the train, gets to the station on her bike and -- on the days when there are groceries to be lugged or at night when the trains aren’t running -- she deploys her European secret weapon: car sharing.

All concerns about greenhouse gases aside, she says, “People want to be comfortable. They want to get from A to B quickly.”

Car-sharing groups keep fleets of cars parked at convenient points around the cities of northern Europe, available for users to pick up and drive nearly at will. The idea: to offer drivers the instant mobility of ownership when they need a car and free them from most of the expense and headaches of ownership when they don’t.

Take Muggli: She shares a car with 25 other householders in Graefelfing. Each has put down a refundable security deposit and pays a small monthly fee -- about $7 -- that covers maintenance and insurance. They keep the car at a designated spot behind the village hall. Whenever Muggli needs the car, she simply books it by phone, gets the key out of a safe built into a wall near the car, jumps in and drives off. Once a month, she is billed for her usage. No contracts, no repair bills, no maintenance, no hidden insurance premiums.

And Muggli’s organization is one of the small ones. These days, thousands of Europeans are trying car sharing, and, oddly enough, some of the greatest enthusiasts are Germans, a people famous for their purring Mercedes-Benzes, well-engineered autobahns and love of speed. Car sharing may have begun as an idealistic movement, but these days it is maturing into a sophisticated, for-profit business in Europe, complete with mergers, stock sales and “smart” technology.

“There are software experts who do nothing but work for the car-sharing scene, two of them in Germany and one in Switzerland,” said Sassa Francke, a Berlin Technical University sociologist who is writing her dissertation on driving habits. The biggest car-sharing organizations offer touch-tone automated booking, computer-chip membership cards and advanced vehicle-location technology using radio signals.

Since the big Swiss and German groups started in the late 1980s, an estimated 25,000 Germans and 20,000 Swiss have signed up. In the heavily congested Netherlands, where the government subsidizes car-sharing programs run by conventional car rental agencies, about 57,000 people participate. Networks are starting up in Austria, Scandinavia and Canada.

And in a few U.S. cities -- including in the San Francisco Bay Area -- environmentalists and city planners are looking on admiringly and wondering whether this European phenomenon could catch on in the United States as well.

“Despite the popularity of single-occupancy vehicle travel, there has never been a better time to initiate a car-sharing organization in the United States,” said Conrad Wagner, president of a 6,000-member Swiss car-sharing society called ATG. Although America’s relatively low gasoline prices pose a clear disincentive to car sharing, Wagner figures that only a few U.S. car-sharing groups are up and running so far, so the American market is wide open for the future.

A Second Living Room

Conventional wisdom has it, of course, that car sharing won’t work in the United States because the private auto has become inextricably linked with freedom, flexibility and the pursuit of happiness.

And Americans tend to think of their cars as second living rooms, or expressions of their personalities. Could an American who thinks of himself as, say, a vintage T-Bird, bear to be seen behind the wheel of a shared Volkswagen?

Well, Germans too tend to see car ownership as something just short of a constitutional right, and they also make statements about themselves through the size of their engines. Not for nothing is the biggest-circulation magazine in Germany a car magazine, and one of the most paralyzing traffic jams in Berlin history was caused, in 1989, by drivers demonstrating against an attempt to impose a speed limit.

But in recent years, the streets of urban Germany have become so crowded, the price of gasoline so high and parking places so elusive that the cachet of car ownership is disappearing under a mountain of hassles. In the former Communist east, in particular, streets built to handle the few tiny Trabis on the road are now clogged as the masses have indulged their tastes for Audis and BMWs.

“When people go into car sharing now, they are doing it for the individual benefits,” Francke, the sociologist, said. “They get no advantages from having a car in the city. Of course, it’s nice to think you’re acting ecologically, but for most people this is only the third-most-important point.”

For Germany’s burned-out car owners, sharing offers a simple, but attractive, logic: The average car owner here is estimated to use his or her vehicle just one hour each day. The rest of the time it stands pointlessly on the pavement, costing money and taking up space.

“The value of all the cars in Germany adds up to a capital stock worth hundreds of billions of marks,” said Carsten Petersen, co-founder of StattAuto, a 4,000-member, 150-vehicle car-sharing company in Berlin. “If you were a businessman with a company worth hundreds of billions and you ran it just one hour per day, people would say you were crazy.”

But despite the logic of pooling all these idle cars, earlier attempts at car sharing generally failed. Often, the sterling ecological motives of the organizers weren’t matched by the steely business sense needed to make such operations grow.

One large car-sharing project in San Francisco collapsed in 1985, for instance, because it had no way of checking the participants’ credit-worthiness and because it didn’t discourage long-haul driving. Members would drive the cars far away from San Francisco, and if they broke down, the organization incurred bank-breaking costs towing them home.

Even today, U.S. car-sharing groups, where they exist at all, tend to be small and high-minded operations, structured as co-ops and tailored to the tastes of people who want to do something for the environment and who are willing to sacrifice personal convenience.

Chevy Van in Missouri

The oldest known such going concern, a cooperative, was founded only last year in Missouri. It consists of seven members who share a Chevy van that runs on “biodiesel,” a renewable non-petroleum fuel made from recycled fryer oil from fast-food restaurants. There are also a few car-sharing programs and start-ups in the Pacific Northwest, including one launched in Portland in February by the state of Oregon and the Environmental Protection Agency.

“This is nice, but it’s more for consciousness than for impact,” said StattAuto’s Petersen, who works in attractive offices in a remodeled brewery. “You can have impact [on the environment] only when you have a lot of cars.”

Back in the days when European car sharing was in its infancy, no one would have dreamed of calling for “a lot of cars.” The thinking back then was that car usage was bad in any form -- even shared form -- and needed to be discouraged.

Thus, at the time, European car-sharing groups made no effort to be user-friendly, or to offer particularly desirable cars, as the case of StattAuto shows. When Petersen and his brother, Markus, started the company in 1990, they had just two used Opel station wagons -- bought with an $11,000 loan from their father -- and a telephone answering machine. Their customers booked the cars by calling up the answering machine and playing back the whole tape, listening to everybody else’s reservation messages until they found a time when a car would be free. Then they added their own booking to the tape.

“It was incredibly complicated,” Carsten Petersen recalled. “People would be calling in from a bar, and you had all this noise in the background and you could barely understand what they were saying.”

It was very low-rent, but the Petersens had big dreams. Brother Markus, an economist, had written his doctoral dissertation on the various car-pooling and gas-saving initiatives that sprang up after the oil shocks of the 1970s, most of which had failed. Carsten Petersen thought he knew why, and he wanted to prove that a car-sharing group could survive free of subsidies, and even turn a profit.

Doing that, the Petersens say, meant adopting a pro-growth attitude and tackling the problems that kept earlier car-sharing ventures too small to be viable.

One such problem was the predictable wish of most users to drive the vehicles at the same time: on Saturdays and Sundays. In the past, this preference meant car shortages on weekends -- a big turnoff to potential members -- and wasteful car gluts Monday through Friday. And with the cars sitting idle for five days out of seven, there were no revenues to buy more cars and accommodate the booked-out weekends.

At StattAuto, Carsten Petersen attacked this bottleneck with an aggressive telemarketing campaign, promoting the fleet to the various private businesses -- sales organizations, repair services and such -- that need extra cars during the workweek.

“It’s very difficult, but it works,” Petersen said, explaining that by offering 20% corporate discounts Monday through Friday, StattAuto has been able to lure 200 companies onto its membership rolls. “In the beginning, we attracted only smaller companies, but now we’re getting the bigger ones,” he said.

By signing up these corporate customers, Petersen said, StattAuto has been able to buy more cars and improve service to its traditional base of weekend drivers. One of the main gripes about car sharing in sprawling Berlin is that there aren’t enough StattAuto pickup posts to serve every neighborhood conveniently, but Petersen dreams of growing so big that one day, there will be StattAuto posts everywhere, as ubiquitous as taxi stands.

24-Hour Dispatcher

At the same time, StattAuto has been making its booking and billing technology vastly more customer-friendly than in the early, answering-machine days. The company now has its own 24-hour dispatcher and offers child-safety seats, bike racks and roof carriers with its cars.

It tries to accommodate individual tastes with vans, station wagons and convertibles, and it also rents bicycles and canoes. Membership perks include 15% discounts on the Berlin mass-transit system, a grocery-delivery service and even a tie-in program with the Hertz car-rental agency: If a StattAuto customer can get a better price at Hertz, he gets the Hertz car and StattAuto sees to the paperwork.

As for costs, in addition to a small monthly fee, StattAuto charges $1.60 an hour from 8 a.m. to midnight for a compact car, and about 50 cents an hour from midnight to 8 a.m. These prices include gasoline and insurance but do not include mileage. That costs an additional 12 cents for each mile.

StattAuto receives no subsidies from the government -- not even free parking places in crowded Berlin, despite the Petersens’ best lobbying efforts -- but growth is nevertheless so heady that a merger is planned with a car-sharing business in Hamburg.

StattAuto -- whose name is a pun, meaning “instead of a car” but sounding like “town car” -- is also preparing an initial stock offering, which will be marketed to the same kind of investors who put money into socially conscious mutual funds.

Petersen said StattAuto will open a branch in congested Rome in 1999, and he recently traveled to London to scout business prospects there.

“If you cross Trafalgar Square, you can’t even breathe because of all the dust and fumes,” he said. “I think we could start in London next year as well.”

None of which necessarily means car sharing will take root and grow in the United States the way it has in Germany. The roads aren’t as crowded; there is no Green Party promoting car-ownership alternatives in Washington, as in Bonn. It’s simply harder to do without a car in America, and the hassles of ownership haven’t brought U.S. drivers to the breaking point yet.

“One condition for car sharing to work is, there has to be some pressure on car ownership,” Petersen said. “We have this in Germany because you can never find a parking place. Also, for car sharing to work, you have to have a good public transit system. Otherwise, people really need their own car.”

That probably puts Los Angeles out of the running. Still, would-be car sharers in the U.S. are studying the German and Swiss experience, trying to draw lessons for American cities. One field test is to start in San Francisco later this summer.

“We’ll never become rich with this, but we can do good work,” Petersen said. “We don’t get as big a return on investment as Daimler-Benz or Microsoft, but we’re paying a staff of 10, and we have the right political direction in our lives. We can live with this.”

* * *

How Much It Costs

Here are some typical costs for a member of Stattauto, a German car-sharing group. These prices include gasoline and insurance.

$550.00: Security deposit for individual members, which is returned if he or she drops out of the organization.

$110.00: A one-time, non-refundable access fee.

$6.50: monthly fee

$1.60: per hour for a compact car from 8 a.m. to midnight

$0.50: per hour from midnight to 8 a.m.

$16.50: for a 24-hour period

$0.12: per mile mileage fee

Note: Car-sharing costs vary depending on whether the car is used by an individual or a company, what type of car it is, and when and how far it is driven.

Source: Stattauto

Copyright 1998 Los Angeles Times.