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One way electric vehicle rentals. At the MIT Global Challenge: http://globalchallenge.mit.edu/teams/view/202
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Mobility-on-Demand RideYour personalized taxi at a fraction of the cost
Ryan ThurstonAleem MawaniVirot ChiraphadhanakulRyan Chin
Confidential / Do Not Distribute | [email protected]
Founders
Company Snapshot
The Team Advisors
MIT PhD and Masters students with operations and transportation expertise
Future offices in San Jose, CAFounded in 2011, Cambridge, MA
Financials
$250k Seeking for angel
$5.3MM Seeking for Series A
Potential Investors
U.S. Carsharing Market Revenue2009 - 2016
• One-way car sharing• Rentals by the minute• Commercial vehicles
Market
Non-dilutive grants and subsidies available
Aleem MawaniHarvard Business School
Virot ChiraphadhanakulPhD CandidateMIT Operations Research Center
Ryan ChinResearch Specialist & PhD Candidate, MIT Media LabSmartCities Group
Ryan ThurstonMIT Sloan School of Management
Primary Media Lab funderOngoing technical interest and support
$3.4 B oppty44.4% CAGR
Dimitris PapanikolaouPhD Candidate, MIT Media LabSmartCities Group
Kent LarsonDirector Changing Places GroupMIT Media Lab
Todd WhitelawBrand ManagerSMART Center Boston
SMART Center Boston
53% Amount of carbon
emissions devoted to transportation
Source: Frost & Sullivan, EPA
By far, the largest source of C02
emission is fossil fuel consumption via transportation
Problem: Urban mobility is unsustainable
Clean energy issues
• Pollution via carbon emissions53% of carbon emissions from fossil vehicles
• City congestion• Energy inefficiency
Lifestyle trends
• Rent vs own• Demand for green vehicles
Existing Solutions Fail
• Private automobiles• Major source of CO2 emissions
• Cause massive congestions
• Public Transportation• Does not cover entire city• First mile - Last mile problem• Inconvenient and inflexible schedules
200,000 # of bicycles rented daily in Paris
80 # of cities that currently offer bicycle sharing
Manufacturer Vehicle Release Photo
Smart ForTwo 2008
Toyota iQ City Car 2012 est
Ford Focus 2012 est
Honda Fit 2012 est
The future: Clean and sharable vehicle use
Urban car sharing expanding
• Zipcar expanding rapidly6000 vehicle network
49:1 Member:Vehicle ratio in 2009 and growing
• AutoLib debuts in ParisFleet of 3,000 cars
Half hour rentals
• Hertz, Enterprise launch car sharingCombined fleet of 850 cars and growing
Source: Frost & Sullivan, U.S. Dept of Energy
Bike sharing programs exploding
Auto OEMs releasing clean, “urbanized” vehicles
Solution: One-way, fuel efficient car sharing network
One-way car sharing
VS
Traditional two-way car sharing model
• Commercially available SMART ForTwos, rented by the minute
• Pickup and drop-off anywhere in the urban area
• Maximized service level and fleet utilization through our patent-pending fleet management system
Pros Challenges• Increases vehicle utilization
Leads to higher revenue
• Reduces congestion Each shared car removes up to 30 vehicles
• Flexibility & Convenience Mobility-On-Demand
• Solves first mile – last mileIncreases ridership of mass transit
Complementary to mass transit
• Fleet ManagementVehicle availability
No parking
Costly redistribution
• Critical Mass• Reliance on Local
Municipalities to fund parking
Source: Frost & Sullivan
Phase 1Launch small pilot MIT• Operate on campus (25-50 cars)• Current partnership with SMART• Prove use-case and niche• Learn and optimize• Rely on word-of-mouth marketing
Phase 2Expand to nearby colleges• Restrict usage to students
Phase 3City and general public use
Candidate cities include:• High GDP• Population density• Mixed land-use• Poor public transit coverage• Motivation to reduce traffic and
energy consumption Iterate and perfect product based on customer feedback
2011-2012 Phase 1 Schedule
Cambridge - MITMarket Entry Plan
Decision Making Unit (DMU)Percent time spent on managerial responsibilities
Transportation Manager75%50% IT manager
25% Consultant technical architect
Persona and Description
“The Influencer”. Responsible for sizeable budget ,staff, operational and strategic planning. Performance review weighted toward managerial responsibilities
Rank University & Neighborhood Location # of students
1 BU/BackBay Boston 32,053
2 U of Mass/South Bay Boston 25,873
3 Harvard/N Cambridge Cambridge 25,690
4 Northeastern/Kenmore Boston 24,434
5 Boston College Chestnut Hill 14,621
“The Driver”. Performance review balanced between managerial and technical achievements
“The Veto”. Technical leader in one or more domains. Performance review weighted on technical achievements
Market Opportunity 122,671 students
Appendix: Boston area target markets
Source: http://www.doe.mass.edu
Zipcar CommunautoHertz
ConnectPhilly
CarShare*City
CarShare*Car2Go
# of members 340,000 18,500 7,500 35,000 12,000 10,000
# of vehicles 6,950 830 479 410 324 350
Member : Vehicle 49 22 16 85 37 28
Geographic Coverage
66 U.S. cities + 100 college
campuses
4 cities in Canada
19 U.S. cities +
12 colleges
1 U.S. city (Philly)
4 cities in the bay
area
1 U.S. City + 2 Europe
Rental TypeHourly, two-way
Hourly, two-way
Hourly, two-way
Hourly, two-way
Hourly, two-way
Minute, one-way
** = nonprofit
One-way, fuel efficient car sharing is an entirely new market opportunityMinute-minute rentals further differentiates our offering
Source: Frost & Sullivan
Appendix: Benchmarking Top 6 Car share organizations
58%Gross Margins (worst case – will rise after fixed costs removed)
Appendix: Detailed Financials
Assumptions
• Vehicles leased through OEMs
• RetrofittingIncludes Android tablet, smartphone apps,
GPS, keyless entry, etc.
Key Figures
Gas proposal (back-of-envelope calcs, bottom up)number of cars 25 utilization per day 15%rev per minute per car $0.35
operating revenueshrs car available per day 24hrs per day car in use 3.6rev per hour per car $21.00 rev per day per car $75.60 rev per month per car $2,268.00 rev per month per fleet $56,700.00 rev per year per fleet $680,400.00
variable costslease per month per car $120.00 parking per month per car $150.00 insurance per month per car $102.00
fuel per hour $3.75 fuel per day $13.50 fuel per month per car $405.00
maintenance per month per car $50.00 redistribution costs per month per car $50.00 3G GPS/web services per month per car $30.00 total costs per month per car $907.00 total costs per month per fleet $22,675.00
fixed costsretrofitting per car (keyless entry, android tablet, etc) $500.00 retrofitting per fleet $12,500.00
profitsgross profit first month per car $861.00
gross profit per year per fleet $395,800.00 gross margins per year per fleet 58%
40%
2%
58%
variable costsone-time fixed costsoperational profits
Appendix: Car2Go Market Surveys
Car2Go user Positive Feedback
“I love the idea of car2go, and the few times it was available to get me to work on time, it was fantastic and I was grateful.”
“I was dreading the walk home, but voila! someone had parked a car2go right in front of the restaurant! It really has been a lifesaver on my laziest occasions.”
Karen L. Austin, TX12/1/2010
Meg C. Austin, TX12/14/2010
De C. Austin, TX11/10/2010
“I got an email confirmation showing the location of the car on a map. I got to the location- no car. I checked around the area. No car.”
“Car2Go's silver bullet is that you don't have to return the car to where you started”
Tate S. Austin, TX10/6/2010
Mercedes P. Austin, TX12/14/2010 “I can never find one when I need it. EVER.“
“Someone of course took our car by the time we were gonna leave. We walked around a bit before finding a new one since the website from phone sucks.“
B.T. Austin, TX1/1/2011
Confidential / Do Not Distribute | [email protected]: www.yelp.com
Negative Feedback
• The breakeven point for car ownership and carsharing is approx 4k miles
• Our target market is urban dwellers who drive less than 4k miles per year
• Carsharing is more cost effective vs car ownership
• Carsharing programs save up to 70% of the total transit costs for its members
• Utilization rate is the key revenue driver
Appendix: One-way Car Sharing Business Model
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
• Most car sharing serves one city/market (except ZipCar and U Car Share)
• Rental companies recently joined (e.g. Connect by Hertz, WeCar)
• One-way trips will raise membership and serve urban niche
Appendix: U.S. & Canada Two-way car sharing market (2009)
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
• Tremendous growth over the past few years• Market consolidation grew the avg revenue of carsharing
programs• Startup financing and partnerships will remain key issues for
future carsharing programs
Appendix: Two-way car sharing market (U.S. & Canada ’01-’09)
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
More members and increased vehicle utilization rate after consolidation make total industry revenue grow fast
Appendix: Two-way car sharing market (U.S. & Canada ’09-’16)
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
For the first time in history, there are more people who live in urban vs rural areasAppendix: Future of Transportation in urban environments
Source: UN Population Division Confidential / Do Not Distribute | [email protected]
• Majority of Car2Go users spend 15-25 minutes using rental. • Car2Go utilization rates 13-15% per day on average
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90M
ore
0
100
200
300
400
500
600
700
800
900
Car2Go data: # of users vs trip time
Frequency
trip time (minutes)
# o
f u
sers
Appendix: Car2Go # of users vs trip time
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
Challenge Notes Level of Importance
Increased vehicle utilization rates
Two-way vehicle utilization rates should be 40%, otherwise carsharing fails to recover costs.
High
Change members driving decisions
Currently, 11-32% of charsharing members give up their vehicles, and 25-71% avoid buying one. The success of any carsharing program depends on how to exploit these trends
High
Expand member base A mix of residential, business and government members lead to complementary usage of vehicles and higher utilization rates.
High
Financial resources Carsharing businesses initially lose money until they reach critical mass. Outside funding is critical.
High
Awareness & Mindshare Carsharing members only account for 0.2% of registered North American licensed drivers. Carsharing programs must increase awareness to expand.
Medium
Partnerships Partnering with transit agencies, parking authorities, shops and services is imperative for long term growth
Medium
Communicate carsharing benefits
Communicate carsharing benefits to government municipalities, transportation authorities and future members to increase membership and government support
Medium
Appendix: Carsharing industry challenges
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan
• ZipCar expanding rapidly• 49:1 Member:Vehicle Ratio in 2009• 63:1 expected in 2016
Appendix: Zipcar Member:Vehicle Ratio
Confidential / Do Not Distribute | [email protected]: Frost & Sullivan