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Car clubbing in the capital
Date: 05 April 2016 | Author:
As car clubs become increasingly viewed as an alternative business mobility option, London-based DriveNow is well placed to capitalise. Paul Barker reports.
DriveNow currently claims to be the number three car club in London behind Zipcar and City Car Club, grabbing a 10% share of the market after a year of operating in the city. But UK director Joseph Seal-Driver says the company is "stealing a march" in London, and with expansion plans reaching beyond the four boroughs in which operates currently, he's looking to boost market share and enter the psyche of more businesses that are revisiting their travel options.
Owned by Sixt and BMW, The firm has a 290-car fleet of Mini five-door, BMW i3 and BMW 1-series models across the adjoining London Boroughs of Hackney, Haringey, Islington and Waltham Forest, and claims to have around 50 customers per car - 15,000 in total - with a target of tripling that.
At present, most corporate customers are start-up businesses, with the boroughs where DriveNow operates being the most popular in London for fledgling operations, Seal-Driver says, but there are plans to move into larger fleets too.
At the beginning of this year the company took on Jake Baldry to target business development across large corporates, small SMEs and business centres. As well as business accounts, DriveNow is also getting into the bespoke employee perk arena, where a company uses it for business travel and/or offers free or reduced-price membership as an employee perk, instead of the regular £29 lifetime membership deal.
"[Baldry's] job is to do that, and it accounts for quite a lot of the customers that are coming through," states Seal-Driver. Fleet customers that use DriveNow include replacing grey fleet, especially where an employee doesn't usually drive to work, and the like of estate agents that have to take clients out.
That scenario, like any kind of London errand-running, works well because the DriveNow cars can be parked in any resident or public pay-and-display bay in the four boroughs free of charge, rather than having to stop in specific car club spaces. Vehicles can be rented by the minute, or in packages of three, six, nine or 24 hours, while there is also a specific deal to run to and from City Airport.
That works particularly for business travellers heading for the likes of Dusseldorf or Hamburg, where they can hop on a flight from City Airport and then get into a DriveNow car the other end as well, since the company operates in nine European cities as well as London.
Although he did not specifically reference rivals, Seal-Driver claims the company's subtle branding on the cars is welcomed by business customers.
"The cars look cool and people want to drive them. Compared with the competition the branding looks classy and fits the style of the vehicle, much better than other branded cars," he says.
The cars are all leased for no longer than a year through Alphabet, and although Sixt runs DriveNow's back-end systems, Seal-Driver said there are similarities between that and Alphabet's Alphacity car-sharing technology.
Seal-Driver is reluctant to express too much in terms of where the company is heading next, only admitting the obvious in terms of expansion, which is likely to involve growing into neighbouring boroughs or to another large cluster of boroughs somewhere else in the capital, as well as looking at other major UK cities.
"In a way we have chosen the hardest market to crack in London; not by customer base or usage but because of the politics," he says. "There are 32 London boroughs so you have to have 32 conversations, so it takes longer to cover the whole city. In Paris or Munich, for example, you have one conversation with the unitary authority, then parking, environment and the mayor's office and it's done."
On the subject of whether the target would be blanket coverage across all 32 boroughs, Seal-Driver isn't convinced that would be necessary.
"I think some boroughs are comparatively rural, and to be blunt, DriveNow is urban or semi-urban," he says. "I can see us working with hub locations at the likes of business parks with key employees, and the same technology could be applied at shopping centres and high streets.
"Projecting forward by about five years, we're working in the majority of boroughs, even if it's only in central hubs," he continues. "We can either grow into [neighbouring] boroughs or to another large cluster, and we're investigating both possibilities, and other core UK cities are being looked at."
Seal-Driver says there is little input from the Sixt and BMW parent companies, although both are looking to leverage the customer base.
"We have 15,000 customers driving BMWs or Minis and liking them as cars; these people will one day move out of the city and it's about influencing future purchasing decisions," he says.
"Sixt doesn't operate in the hourly rental market and we do, so we are able to pass customers onto them for longer-term hire," he concludes. "If you think about our business, people might need vans or cars for long-distance travel, and then shorter stuff with DriveNow."
Charging needs
DriveNow UK boss Joseph Seal-Driver is critical of the way London's electric vehicle public charging network is developing.
"We've got the largest EV fleet in London: 50 EVs in use. I would love to put a load more in but for us it's really difficult because you can't plan," he says.
"If we got another 100 EVs, which we could do at the drop of a hat, we would need to [clarify] the charging network is available, the cost, who owns the data, how long the car can be parked, if you can book it in advance and how to do it," he continues. "It's quite difficult to plan for an EV future when you don't have a clear plan of the future."
At present, DriveNow customers get 20 minutes of free driving time for plugging in one of the 50 BMW i3 models if it is less than 35% charged
