The car sharing industry around the world is experiencing rapid growth, which is projected to continue over the next ten years. Sharing services allow us to tackle global challenges including climate change. In the direction of building up sustainable transportation systems, car sharing services have become a viable option for those who prefer to leave their car in a garage or at a parking lot.
We decided to try to unfold the major advantages of the car sharing industry by interviewing Dimitar Stoyanov, country manager, SPARK Romania, a car-sharing company, that entered the Romanian market in 2019.
Can you tell us more about the company profile and what makes your product different?
Spark is one of the few car-sharing companies on a global scale, operating an entirely electric fleet.
Our service does not just provide a safe and low-cost transportation opportunity, but also allows people to experience the most advanced technology in the sphere of automobile industry, which is gradually shifting towards electric vehicles.
For many people, the touch with this new technology is happening for the first time through our service, creating a different perception of automobiles which they did not have before.
Additionally, unlike many modified traditional rent-a-car services or projects developed by OEM (original equipment manufacturers), Spark has been planned as car-sharing in its genesis.
Saying this, we differentiate from standard renting perceptions by emphasizing on urban mobility – there where our real value is. We want to provide a safe, comfortable and cost-effective solutions for daily trips between different locations in the city. This is when car-sharing is really efficient and helpful.
A report by Eurostat and Mobility Car Sharing claims that car sharing significantly reduces CO2 emission. For example, a car sharing member can save up to 290 kg of CO2 per year due to a more common use of public transportation in comparison to a private car owner.
What is the main reason motivating both drivers and owners to shift to your service, and if you could tell us something about your client profile?
As mentioned we focus on accessible urban mobility solutions at a low cost, by taking of from clients back the necessity to think for insurance, parking, technical revision, oil change and other specifics related to the possession of a conventional vehicle. Based on that and on the rapidly increasing fleet in Bucharest, for drivers it is easier than ever before (and would be getting even easier with further fleet expansion) to locate a ready to use vehicle around them. For car owners on the other hand, Spark is becoming not only an alternative for the cases when they cannot use their own vehicle or need a second car in the family, but also a first choice in many situations, especially when it comes to flexible parking in the center (Spark parks for free).
Of course the first clients on every market are always early-adopters and people keen on technology, but our practice has shown that the customer database increases further very fast with people looking for cost-efficient mobility solutions.
While studies show that a big percentage of consumers still prefer owning a vehicle versus using shared services, these trends are set to change, especially with younger generations. Gartner Inc. estimates that by 2025, 20% of the vehicles in urban centers will be dedicated to shared use.
What is your perspective on the evolution of the car sharing market in 2020 and particularly in Romania, especially in this pandemic times?
Mobility industry has experienced tremendous challenges during the pandemic crisis, the effects of which continue up to this day. This applies also to the segment of car-sharing where demand has dropped in the beginning of the pandemic, stimulating all operators to develop flexible renting schemes in order to adjust to the new levels of demand. This is exactly what we did also in Romania, with additional focus on antipandemic desinfection measures. Nevertheless, return to preCOVID levels is already observed with people recurring to their daily routines. Additionally, people started recognizing car-sharing as a safer mean of transportation, compared to public transport and this trend is expected to be kept in the future, especially with the once again growing COVID concerns. Having said that, although 2020 proved to be the most challenging year for the industry so far, on the other hand it provides opportunity for even more people to consider car-sharing, so we look confident to the future sector development.
Southern European people have always been very fond of owning a private car.
Do you think the mentality is changing and people will embrace increasingly the car sharing concept? What are the most challenging aspects to face when entering a new market?
More people recognize the opportunity to use and enjoy a modern vehicle and pay only for the time when needed, which is a common specific also among other disruptive business models. Entering a new market is always related to a process of educating the audience of the benefits explained also above and to present how car-sharing could make daily life easier, without the necessity of taking into consideration all aspects of owning a vehicle. A positive change in this regard is noticed, showing that society is gradually shifting towards more sustainable practices.
Of course, car ownership and other means of transportation are not to be entirely substituted and this shall not be the goal of car-sharing operators. Sharing services are another part of the urban mobility solutions, which are integrated into the pulse of the city. In a matter of fact, many people make the decision to purchase a certain vehicle model after driving it first at Spark, as our service basically resembles the biggest test-drive of electric vehicles which could be ever organized.
Still, this type of transportation provides further benefits, which were difficult to be achieved before. Until recently, the mass usage of a silent, eco-friendly electric vehicle was considered to be an exotic concept and most people could not gain this experience personally. Now this is being changed with the hundreds accessible electric vehicles on the streets.
We often hear that reaching profitability is hard for carsharing operators, and a lot of damages could happen in the rental process.
How do you respond to that? What is the Romanian consumer behavior?
As Spark is created with the idea of car-sharing from the very beginning, we are carefully optimizing our resources in a way to overcome such challenges and to meet profitability. We have gained experience on different markets, which allows us to establish tested practices and know-how in this regard. Romania is not much different from other markets, where such type of services bare the risks of providing access to vehicles to a large number of people. That is why we are constantly improving our system by introducing facial recognition, deactivation of users due to over speeding (automatically tracked), certain penalties for non-regulation of the traffic law and other features which are to be further implemented. Having that said, besides profitability, health of our clients is also a priority and enlargement of client-base is not at all cost.
We also have the support of our local partners in the face of OEM representatives with which we organize fast and efficient process of communication in order to be sure servicing time is narrowed to a minimum.
SPARK entered Romanian market only 1 year ago, with 50 cars. Now you have over 260, a dramatic increase.
What are SPARK’s future plans in Romania? What cities will you operate and if any new partnerships or services in plan?
Currently we still have a lot of work to do in order to secure a safe, environmental friendly and cost-efficient solution for all citizens of Bucharest. The service is constantly evolving in order to provide better experience, but focus remains on car-sharing. Short-term plan is the fleet to reach over 560 vehicles in a matter of months (by the end of October we would have introduced another 150 cars) and long-term plan is for even more. Bucharest has enormous potential and before entering other cities, we would like to see a really good developed market here.
Additionally, introducing the service into a new city is related also to existence of the according charging infrastructure, a criteria which is not always easy to meet.