Car share conundrum

This post is born out of yesterday’s frustration, with a Goget car doing it’s best Christine impression in the middle of the University of New South Wales, horn blaring, for about 45 minutes. But I’ll try to see through the emotion. I never can hold onto anger for long, as much as I would sometimes like to 🙂

Anyway, the crux of it is that car share is wonderfully convenient, but the current local providers are either too small, or frustratingly inadequate when it comes to customer service and standards.

Things can’t always go right, I know that. However in my three plus years as a Goget member such events have occurred with a disastrous regularity; a situation compounded by the difficulty in getting through to someone on the ’emergency contact’ number. Actually, that’s being kind. At times it just automatically hangs up without even the opportunity to leave a message.

But, I’m moving beyond the anger (breath deep). And I’m going to address this in a systematic way (let go of the pain).

Background

1. Car share is when… umm… people share cars. They don’t actually share the ownership, but it is akin to distributed car hire, where you can book by the hour. So the resource is shared. Very convenient. When it works. More info here.

2. Goget is the dominant business in Australia. They have a lot of cars on the streets. As can be seen on this map. As car sharing is largely about replacing car ownership, the proximity of car share spaces, or ‘pods’, to your location is vitally important to success.

The Problems

3. As a Goget customer, bookings are rarely made on a whim. So when there is a mess up, you really feel it. Like the time I missed seeing my new born niece in hospital.  Or canceled the trip to catch up with an out friend outside of Sydney. Or the day trips that have been canceled. For example. (Move through the negativity, find your place of happiness)

4. As I said, three plus years of membership. Averaging around one or two bookings a month. And I guess a booking would be canceled or at least interrupted by a screw up on Goget’s behalf about once every three months or so. This has been more or less consistent over the whole time, in spite if the complaints they would have received (and I can be quite noisy once I climb on my  high horse), demonstrating a resistance to address the issues.

4. Goget has grown phenomenally in size, over a short time. This rapid expansion has been matched in scale only by the inability of Goget’s booking/access systems and seemingly car maintenance to keep up.

5. Car sharing is of course a new market, and there will be teething problems whilst things settle down. But the market is mature enough to identify a significant barrier to entry for competitors to Goget, and to apportion at least some blame for Goget’s ignoring of low standards on their dominant market share.

6. The main barrier to entry is the requirement to compete with Goget’s extensive network of cars. Given the high cost of purchasing or leasing cars, the two start up business models would be either to grow slowly as your customer base grows, or to install large excess capacity to meet Goget’s penetration, but run at a loss until your customer base grows. The former was Goget’s model, however they entered at the beginning of the market with very little competition. Props for early moving. However it would be difficult to see how a new entrant could grow competing against the convenience of Goget’s established network. The second option would need a bucket load of start-up capital and would likely see significant losses for some time. Not an enticing proposition.

6. Goget has a virtual monopoly, and the strategy of going for growth without improving woeful service standards indicates that they are fully aware of this. No other car share operation is experiencing growth at the level that Goget has seen. Goget management is not particularly scared of their competitors.

7. Goget does have competition from other forms of transport, but it should be remembered that car share companies receive a huge public subsidy by way of free parking spaces, provided largely by local Government. This is either direct, in the case of free or peppercorn street side parking, or indirectly by way of incentives or regulations for the provision of car share spaces in new residential developments.

8. As I have experienced it, Goget’s low standards have expressed themselves in a computer system for booking and car access that often fails, inadequate staffing of the phone lines and increasingly failing vehicle maintenance. When I think about it, there wouldn’t be much else to the business…

Solutions?

9. Goddam it, my landlords Council rates are providing Goget with a subsidy and I want to see more from it. Of course the subsidy is there because car sharing reduces demand for on street parking and is good for the environment. I’ve been particularly interested in how paying by the hour changes the price signals compared to the lumpy/occasional costs faced by car owners, leading to substitution with walking, public transport and riding. But still, I don’t think the current standards are acceptable.

10. Those public subsidies, which I consider to provide an imperative for intervention, also provide the leverage for standards to be raised. You want to continue peppercorn rents for what would otherwise be one of your major cost inputs? Well, here’s a couple of things that we ask of you…

11. The City of Sydney would be the best placed to step in here, given the high level of support they have provided Goget and given the importance of the City of Sydney residential customer base to the Goget network (check out this map again)

12. In the least, car share businesses could be asked to publicly report on a few standards (a suggested list is below), and to have these audited. This should not be a huge impost, and should not create significant barriers to entry for new competitors and start ups.

13. For businesses with a significant market share and size of business (I’m looking at you Goget), performance benchmarks could be set with penalties attached for not being met. This might be a significant step up but hey, do you want the free parking spots or not?

14. I don’t think that the list of standards needs to be onerous nor difficult to meet. Below are some ideas for the areas of reporting:

a) Average time taken to speak to an operator

b) Time it takes to speak to an operator when the vehicle turns out to be Christine… I mean in an emergency.

c) Percentage of bookings abandoned due to mechanical or technological fault.

d) Billing disputes reported to the Office of Fair Trading, or State equivalent.

And that would be about it. See, not that onerous. Public reporting of these stats would also include transparency for consumers, and inform their decision when deciding which company to join up to.

And maybe give me something less to whinge about. Really though, I’d just find another target 🙂

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