Car sharing switches to electric to boost appeal

Ieva Mackeviciute lives in Kaunas, Lithuania's second-largest city, but works in the capital, Vilnius.

She takes the hour-long train into her company's Vilnius office once a week, where she uses a car-sharing service to drive herself to client meetings throughout the day.

Through an app, she can find where the nearest available car is, and drive off, paying by the minute - a system she finds convenient and flexible.

Some providers even include parking in the price, and if she takes an electric car, it's even better, as they qualify for free parking around the city.

"The ability to move around a big city quickly, and not worry about parking, helps me have a more flexible schedule and better control of my time," says Ms Mackeviciute, 30, who works in communications.

Yet despite being a regular car-sharing user, Ms Mackeviciute still owns a car in Kaunas, which she regularly uses for visiting family living in the countryside. And even while working in Vilnius, occasional issues with car sharing can disrupt Ms Mackeviciute's day.

"It can sometimes be hard to find a vehicle nearby. And sometimes, when you're in a rush the closest vehicle can have not one, but a few, maintenance lights on. While I do understand that fleet maintenance is a challenge, especially as a business grows, it is still disappointing," she says.

When it comes to cars, most people feel like Ms Mackeviciute - they still want to own one.

In the UK, for example, while 61% of people drive daily and 68% are worried about the rising cost of car ownership, 78% don't know what car sharing is, and fewer than 20% of Londoners would consider signing up to such a scheme, according to a report by car rental company SIXT.

Despite brands like Zipcar being around since 2000, industry data shows car sharing to still be a niche service.

There are just two million car sharing users in the UK, while around 35 million people still own a car.

"Consumers are still tied to exclusive access to their car. Clear scepticism about the ability for car-sharing options to provide a car to hand whenever they need it, and concerns about hassle, are the biggest issues," explains Felicity Latcham, associate partner at OC&C Strategy Consultants.

"This concern gets greater for families and older individuals who are particularly tied to being able to leave things in their vehicle."

But the growing electrification of the car sharing market might be attractive to younger, eco-conscious drivers.

In a 2023 McKinsey survey of 4,000 people in the UK, France and Germany, 32% of those in the Gen Z bracket said they wanted to use shared-mobility schemes more, wishing to reduce private car reliance.

The survey also suggested that 50% of Gen Z also want their next car to be fully electric.

The car-sharing industry is heading in that direction.

Almost a quarter of European car sharing companies now offer a 100% electric fleet.

A third of shared cars in the EU are electric vehicles, data from Statista shows. Meanwhile, Zipcar doubled its electric fleet in 2023 in the UK, with plans to go fully electric this year.

Spark, the Lithuanian car-sharing company Ms Mackeviciute frequently uses, launched with a fully electric fleet in 2016.

Its recent performance has been encouraging, with a registered user base up by 30% since 2022, and annual trip numbers up by 11%.

Since July last year, users of the Bolt ride-sharing app - the Baltic states' answer to Uber - can also now book Spark vehicles.

Spark founder Nerijus Dagilis is confident that the increasing availability of electric vehicles can get more people on board with car sharing, especially with the support of the city of Vilnius, which, on top of free parking for electric cars, allows them to be driven in bus lanes, too.

"Our customer pool is increasing every month, so that means we are creating a certain value for people, who prefer electric cars for sustainability reasons. It's becoming a daily habit for many people, especially families - we see more of them downsizing from two cars to one," says Mr Dagilis.

"The performance of electric cars is improving quickly, so while there is still some scepticism, as soon as an electric car can drive 500km on a single charge, I think people's anxiety should disappear."

Canada's Kite is a car sharing company with a twist. Not only is it fully electric, but it partners with property developers to offer Kite cars to apartment building residents as either an included service, or for a subsidised membership fee, akin to a gym or pool.

A Kite hub is installed usually on the first level of the building's underground parking, for residents to book their choice of up to 40 fully charged electric cars.

In some locations, Kite users have the option of returning their car to a different building. Kite is currently live in 20 buildings across Canada, with plans to add 70 more in the next 18 months, adding properties in the US and Europe.

Kite founder, Scott MacWillam, says the convenience and saving they offer to prospective residents is a draw.

"There's a growing trend of more people with a busy city life wanting a 'turnkey' lifestyle. Real estate developers see this as a sales and marketing advantage," says Mr MacWilliam.

"Residents can save money by kind of ditching their privately-owned car, and that cost saving means they now can afford to live in the building, or maybe they can even upgrade their apartment."

Mr MacWilliam says Kite gives thousands of building residents the chance to try both car sharing, and an electric vehicle, without any pressure or commitment, in a package where everything is covered - from charging and maintenance to insurance.

Kite is also hoping to install Kite hubs at train stations and introduce autonomous cars.

"What I'm most excited about, is we could fundamentally change the way buildings are built, forever," he says.