DANILO MACIEL DE BARROS CAR SHARING: COMPARATIVE ANALYSIS OF EMERGENT BUSINESS MODELS Trabalho de Formatura apresentado à Escola Politécnica da Universidade de São Paulo para obtenção do Diploma de Engenheiro de Produção. São Paulo 2015 DANILO MACIEL DE BARROS CAR SHARING: COMPARATIVE ANALYSIS OF EMERGENT BUSINESS MODELS Trabalho de Formatura apresentado à Escola Politécnica da Universidade de São Paulo para obtenção do Diploma de Engenheiro de Produção. Orientador: Prof. Dr. Roberto Marx São Paulo 2015 FICHA CATALOGRÁFICA Barros, Danilo Maciel de Car Sharing: Comparative Analysis of Emergent Business Models / D. Barros -- São Paulo, 2015. 122p. Trabalho de Formatura - Escola Politécnica da Universidade de São Paulo. Departamento de Engenharia de Produção. 1.Car Sharing 2.Business Models 3.Business Model Canvas I.Universidade de São Paulo. Escola Politécnica. Departamento de Engenharia de Produção II.t. ACKNOWLEDGMENTS This graduation thesis was developed as part of the Double Degree program between Escola Politécnica da Universidade de São Paulo (Poli-USP), in Brazil, and Politecnico di Torino, in Italy. I would like to express my deepest gratitude to my family and friends for all the support and joy over the course of my graduation process. I would also like to thank my academic supervisors, Prof. Roberto Marx, from Poli- USP, and Prof. Guido Perboli and Dr. Luca Gobbato, from Politecnico di Torino, for their guidance and support during my work on this thesis. ABSTRACT Car sharing emerges as an innovative mobility alternative, in which companies offer a fleet of shared-vehicles in a variety of locations for short term rentals. Its market has shown consistent growth and car sharing practices have gained attention of public and private sectors, motivated by its economic feasibility, social and environmental impacts. This study approaches the main aspects related to the definition of different business models and operational characteristics in the car sharing market through the comparative analysis of selected car sharing operators, with the objective of identifying the main practices and solutions adopted in the market. The findings that result from the comparative analysis are then applied in the analysis of a Brazilian car sharing company, Joycar, which allowed the identification of the main challenges and opportunities for the company and resulted in recommendations for the company to achieve its growth objectives, given in two different scenarios. Key words: Car Sharing. Business Models. Business Model Canvas. RESUMO O car sharing, ou compartilhamento de veículos, prática na qual uma empresa oferece uma frota de veículos em locais variados para o compartilhamento através de aluguéis de curto prazo, surge como uma alternativa inovadora de mobilidade urbana. O mercado de car sharing tem crescido consistentemente ao longo dos últimos anos e ganhado a atenção dos setores público e privado, motivados pela viabilidade econômica e pelos impactos positivos nas esferas ambiental e social que esta alternativa proporciona. Este Trabalho de Formatura tem como objetivo o estudo dos principais aspectos componentes dos diferentes modelos de negócio e formas de operação no mercado de car sharing, através de uma análise comparativa de diferentes empresas atuantes no mercado. As constatações e resultados da análise comparativa são então aplicados à análise mais profunda da empresa de car sharing brasileira Joycar, permitindo a identificação de desafios e oportunidades relevantes para a companhia. Como resultado, são apontados dois cenários alternativos com recomendações estratégicas para a definição do modelo de negócios da empresa, considerando-se o seu objetivo de crescimento no mercado. Palavras-chave: Car Sharing. Compartilhamento de veículos. Modelos de Negócio. Business Model Canvas. LIST OF FIGURES Figure 1 - Growth in car sharing market .................................................................................. 28 Figure 2 - Business Model Canvas template ............................................................................ 43 Figure 3 - SWOT Analysis Framework .................................................................................... 50 Figure 4 – Porter Five Forces framework ................................................................................. 51 Figure 5 – Evolution in the car sharing market in Brazil - membership ................................ 105 LIST OF TABLES Table 1 – Car sharing companies comprised in the analysis .................................................... 54 Table 2 – Car2Go BMC ........................................................................................................... 60 Table 3 – Enjoy BMC ............................................................................................................... 66 Table 4 – Car City Club BMC .................................................................................................. 72 Table 5 – Autolib BMC ............................................................................................................ 80 Table 6 – Bee – Green Mobility Sharing BMC ........................................................................ 87 Table 7 – Joycar BMC ............................................................................................................ 104 LIST OF ABBREVIATIONS AND ACRONYMS BMC Business Model Canvas CO2 Carbon Dioxide CSO Car Sharing Operator GHG Greenhouse Gas ICS Car Sharing Initiative IPCC International Panel of Climate Change KPI Key Performance Indicator RFID Radio-Frequency Identification VKT Vehicle Kilometres Travelled CONTENTS 1 INTRODUCTION 23 1.1 Context and Relevance 23 1.2 Research motivation 25 1.3 Objectives 25 1.4 Chapter Structure 26 2 LITERATURE REVIEW 27 2.1 Car Sharing Market Overview and Trends 27 2.2 Car Sharing Concept and Service Models 30 2.2.1 Peer-to-Peer Car Sharing 31 2.2.2 Round-Trip Car Sharing 32 2.2.3 Point-to-Point Station-Based Car Sharing 33 2.2.4 Free-Floating Car Sharing 34 2.3 The Impacts of Car Sharing 35 2.3.1 Reduction in Vehicle Ownership 35 2.3.2 Reduction of VKT on Private Vehicles and Option for Active Mobility Alternatives 37 2.3.3 Reduction on Greenhouse Gas Emissions 38 2.3.4 Social and Individual Benefits 39 3 METHODOLOGY AND THEORETICAL BASIS 41 3.1 Comparative Analysis of Different Car Sharing Companies 41 3.1.1 Business Model Canvas 42 3.1.2 SWOT Analysis 49 3.1.3 Porter Five Forces Analysis 50 4 ANALYSIS OF SELECTED CAR SHARING COMPANIES 53 4.1 Car2Go 54 4.1.1 Company Overview 54 4.1.2 Business Model Canvas Building Blocks 56 4.1.3 Car2Go Business Model Canvas 59 4.2 Enjoy 61 4.2.1 Company Overview 61 4.2.2 Business Model Canvas Building Blocks 62 4.2.3 Enjoy Business Model Canvas 65 4.3 Car City Club – Io Guido Car Sharing Torino 67 4.3.1 Company Overview 67 4.3.2 Business Model Canvas Building Blocks 68 4.3.3 Car City Club Business Model Canvas 71 4.4 Autolib 73 4.4.1 Company Overview 73 4.4.2 Business Model Canvas Building Blocks 75 4.4.3 Autolib Business Model Canvas 79 4.5 Bee – Green Mobility Sharing 81 4.5.1 Company Overview 81 4.5.2 Business Model Canvas Building Blocks 82 4.5.3 Bee – Green Mobility Sharing Business Model Canvas 86 4.6 Comparative analysis of car sharing companies 88 5 ANALYSIS OF JOYCAR 97 5.1 Company overview 97 5.2 Business Model Canvas analysis 97 5.2.1 Business Model Canvas Building Blocks 98 5.2.2 Joycar Business Model Canvas 103 5.3 Industry analysis 105 5.3.1 Industry competitors and rivalry among existing firms 105 5.3.2 Potential entrants 106 5.3.3 Substitutes 107 5.3.4 Bargaining power of suppliers 107 5.3.5 Bargaining power of buyers 108 5.4 SWOT Analysis 108 5.4.1 Strengths 108 5.4.2 Weaknesses 109 5.4.3 Opportunities 110 5.4.4 Threats 111 5.5 Strategy scenarios 111 5.5.1 Base Scenario 112 5.5.2 Aggressive Scenario 114 6 CONCLUSION AND FINAL CONSIDERATIONS 117 7 REFERENCES 120 23 1 INTRODUCTION In this chapter, the context and relevance under which this work was developed are presented, followed by a brief explanation of the motivation of this research and its objectives. Lastly, the structure of the chapters is presented, introducing the logical sequence and the contents of this project. 1.1 Context and Relevance Growing urbanization and the increase in greenhouse gas emissions (GHG) has created equally growing challenges for the efficient planning and administration of urban environments. In particular, the planning of an efficient transport system plays a very important role in urbanized societies, not only because of its social and economic importance in guaranteeing the accessibility of people to their jobs, education, and health services, enabling the supply of goods and services and allowing people to interact, but also because of the magnitude of environmental impacts it might generate (JUHEL, 2013). According to the IPCC (International Panel of Climate Change), the transport sector was responsible for 11% of the increase in total annual anthropogenic GHG emissions between 2000 and 2010, estimated in 10Gt of carbon-dioxide equivalents – among the industries, transport is the sector with the fastest growth in GHG emissions, both in developing and developed countries. In 2010, 14% of world GHG emissions were released by the transport sector. Considering only urban areas, approximately 80% of global GHG emissions are originated in cities, to which a significant share corresponds to transports (FIRNKORN; MÜLLER, 2015; PACHAURI et al., 2014; THE WORLD BANK, 2010). The importance of clean,