Capilano University

1

Capilano University

Car2Go

Rio Jeremy & Ke Jun Li (Landis)

100022638 & 100046044

Marketing 161

Joanne Charley

May 21, 2013

Since plans are based on forecasts and forecasts are based on assumptions about the future, doing marketing environmental scan could provide new perspective to future threats or opportunities. For this research project, we will see how 6 of the external forces: demographic, socio-cultural, competitive, economic, regulatory, and technological forces affect Car2Go’s membership in Vancouver.

In 2011, Car2Go, which at the time hadonly 18 locations in cities in North America and Europe, launched in Vancouver (Vancity Buzz). Car2Go is a car-sharing program that provides a complete personal mobility option without the need for a security deposit or the usual cost associated with car ownership. One of the benefits with Car2Go is that these are one-way rentals, so one does not need to bring the car back to where it was picked up. Unlike other competitors such as Zipcar, Car2Go rates are by the minute, although there are hourly and daily rate too.Car2Go offers customers the use of a Smart Fortwo car, made by Daimler AG, the parent company of Car2Go. With over 300 vehicles available in Vancouver, some of them are fully electric, one can find a vehicle in almost any area (Car2Go).

Statistics Canada shows the Vancouver population of the age group of 20 to 49 to be 302,151, which is 50.1% of the total population (Statistics Canada. 2012. Census Profile 2011). Car sharing businesses target people in this age groupwho live downtown anddo not need to drive to work everyday (CBC News. Avis). Moreover, according to a video called “Car Sharing is Big Business in Vancouver” on CBC News, the trend of car-sharing businesses is going to become bigger and bigger. Car sharing is convenient and affordable for people for whom access to a car is not an option. SinceCar2Go first launched in Vancouver, its registered members has grown from 2000 to more than 15,000 (Car2go Marks). 15,000 is only 4.96% of 302,151, so Car2Go still has a large space to grow its business. Because of this, the increasing demand will likely result in an increase in membership.

In the last few years, more people have beenconcerned about the environmental side on their businesses. Vancouver has started two environmental-friendly plans since 2012: Greenest City Action Plan and Vancouver Economic Action Strategy. The city plans to create a healthy city for its residents and to become the greenest city in the world by 2020 (City of Vancouver). Car2Go adds electric power vehicles that are called “electric drive smart ForTwos”. According to Car2Go, “[t]hese particular vehicles do not emit any CO2, Carbon Monoxide, soot, particulate matter or other pollutants.” These zero-emission vehicles build up Car2Go’s good reputation in the community.

Currently in Vancouver, Zipcar, Modo, and Car2Go are the three main companies directly competing in the car sharing industry. According to the Car2Go website, the membership sign-up fee is $35 and the hourly rate is $13.99 plus tax, which are the most expensive fees compared to the other two companies. These two facts can bring some negative impacts to Car2Go. However, only Car2Go has a by-the-minute rate,which is $0.38. The by-the-minute rate is good for customers who only use Car2Go vehiclesfor less than 36 minutes at a time. In addition, Car2Go has an advantageover its competitors in that their cars do not have to be returned to the same area they were picked up from. Customers can end their trip by parking the car at any authorized parking location within the very extensive“Home Area”, which will be shown on the in-car GPS (Car2Go).

Indirect competitors include public transportation, taxis, and bike rental stores. An article“Electric Bike Share Launching on North Shore”, written by Kelly Sinoski, mentions the Electric Bikeway Company, which is going to launch a new electric bike share in the Lower Lonsdale area in mid-to-late June with approximately 80 registered riders. If this electric bike share extends to Vancouver, this may affect Car2Go’s membership.

British Columbia’s economy has undergone a significant growth and change, developing a more diverse economic base that offers abundant opportunities in the workforce. Moreover, since 2007, British Columbia has broadened its trading focus, strengthening ties with Asia-Pacific countries. As a result, employment in British Columbia should grow by an average of 1.8% each year (Province of British Columbia). The benefit of this would be increased services, from health care to emerging high-tech to retail sales, and will drive BC economic growth. It is also important to mention that because of this, the populations in Vancouver Metro area are also increasing (Statistics Canada. 2012. Focus). This growth benefit will impact Car2Go positively. Based on the statistic provided by WorkBC, the steady economic growth we experiencing means we have more disposable income than before, thus making our ability to spend on transportation even greater. Services such as Car2Go will experience an increase in membership for its program.

Restricted parking spaces are one of the few regulations that could impact Car2Go. The proposed resolution from Car2Go to city council states that currently, Car2Go works together with the government of the city to allow the cars to park in reserved parking places across the city and work out deals with garages in downtown areas where parking are expensive (Hernosa Beach City Council 1). It is necessary for the city to approve Car2Go’s program and approve its permits to park in metered or restricted parking spaces without time limit or payment of meters. Without the approval of city council, the accessibility of Car2Go will be negatively impacted and their current competitive pricing will be not as effective as it is now. In Car2Go’s current form, its users do not need to pay for anything other than the rental rate itself. The approval and support from the city council are very crucial to Car2Go’s success in the business.

Technology is a fast growing area where new things could feel outdated in a matter of time. Daimler is one of the world’s most successful automotive companies, with its divisions such as Mercedes-Benz; the Daimler Group is one of the biggest producers of premium cars. Being a part of the Daimler Group brings a lot of innovative ideas to Car2Go in terms of technology because they can use the resourcesof their parent company. Not to mention, their fleet of cars in Vancouver currently are hybrids, so it is highly energy-efficient and good for the environment. In a recent interview by Bruce Nourish, Car2Go’s CEO Nick Cole states that technology such as NFC and Bluetooth are two of many ideas thatCar2Go are looking to invest more time in to improve customer experience. That means in the near future, instead of filling up our wallets with smartcards like we do now, we could simply use our smartphones to open Car2Go cars. Thiswill attract a bigger tech-savvy audience.

Therefore, Car2Go Company has high demand on car share, catches the green city trend, provides a different business model, rationally uses up-to-date technology, has a healthy economic environment, and works together with the city council to minimize impacts from regulations. The 6 external forces that we discussed above show an overall positive impact on Car2Go’s membership and its business as a whole.

Work Cited

Car2Go.Car2Go.com. Car2Go Canada Ltd, 2013. Web. 21 May 2013.

“Car2go Marks One Year of Carsharing in Vancouver with 15,000 Members and The Best Car2go Contest Yet.”Media.Daimler.Com. Mercedes-Benz Canada. 19 Jul. 2012. Web. 21 May 2013. Daimler:

CBC News. “Avis Buys Zipcar.”CBC News. CBC News. 2 Jan 2013. Web. 21 May 2013.

---. “Car Sharing Is Big Business in Vancouver.”CBC News. CBC News. 2 Jan 2013. Web. 21 May 2013.

City of Vancouver. “A healthy city for all: Vancouver's Healthy City Strategy 2012 – 2020.”City of Vancouver. City of Vancouver. 20 Nov. 2012. Web. 21 May 2013.

Hernosa Beach City Council. “Honorable Mayor and Members of The Hermosa Beach City Council.”Hermosabeach.granicus.com. Hernosa Beach City Council.8 Jan. 2013. Web. 21 May 2013. file.

Nourish, Bruce. “Interview with Car2Go CEO Nick Cole”Seattle Transit Blog.Seattle Transit Blog. 11 Jan. 2013. Web. 21 May 2013.

Province of British Columbia. “B.C. Economy.”Workbc.ca. WorkBC. n.d. Web. 21 May 2013.

Sinoski, Kelly. “Electric Bike Share Launching on North Shore.”The Vancouver Sun.The Vancouver Sun. 26 Apr. 2013, Web. 21 May 2013.

Statistics Canada. 2012. “Census Profile 2011.”Statcan.gc.ca.Statistics Canada. 1 Mar. 2013. Web. 21 May 2013.

---.“Focus on Geography Series, 2011 Census.”Statcan.gc.ca.Statistics Canada.18 Jan. 2013. Web. 21 May 2013.

Vancity Buzz. “Car2Go Launches in Vancouver”Vancity Buzz.Vancity Buzz. 27 Apr. 2011. Web. 21 May 2013.