In depth: Daimler's Car2Go program is simple, amazing, but not perfect

Does your car think about kissing? Can you leave it wherever you want without paying for parking? Do you share it with over 15,000 other drivers? Is it actually not a single car but one of about 300 identical vehicles that wait for you all over town? You could answer yes to all of these questions if your ride was a Car2go edition Smart Fortwo. Prices start at just $35.

Car2go is Daimler's bold and original car-sharing program in Austin, TX, and we got to investigate how it works in person this week. Car2go has a straightforward underlying ideology: K.I.S.S. – the classic, "keep it simple, stupid." Just over a year old, the program continues to evolve, adding features and expanding its operating area while remaining at the forefront of the "transportation when you need it" carsharing movement. We don't want to malign Zipcar (which we will be reviewing in the near future) or other shared vehicle options out there, but the truth is that these Smart Fortwos are unlike anything you've ever driven. Read on for the full details.

Photos copyright ©2011 Sebastian Blanco / Weblogs, Inc.



Before we get any further: yes, when you're driving a Car2go Fortwo, you're still driving a Fortwo, and that means dealing with the terrible transmission every time you step on the gas. But in so many ways, these cars are universes apart from all the other Smart car in the U.S. There are obvious physical differences – a unique solar roof, for example – but what we're talking about is what it means to drive one, not how it drives.

First, here's how Car2go works:

There are 300 Car2go Fortwos in Austin right this minute. By using one of the third-party Car2go smartphone apps (or this website), you can locate an available vehicle and walk on over. No reservations are required, but they are possible, up to 24 hours in advance. Taking control of a Car2go Fortwo is easy as can be. You put your membership card (one-time cost: $35) up to the window near the device on the dashboard, unlocking the doors. Then, you input your 4-digit PIN, confirm that there is no damage or a massive mess in the car (if a driver reports a dirty car, Car2go sends out either a third-party team or an employee to clean things up), move the key from the dash to the ignition key cylinder and off you go. When you get to your location, you basically reverse the process and walk away. These are one-way rentals, so you don't need to bring the car back to where you picked it up. Let that sink in for a minute, because it's really the key concept here. Got it? Okay, good.

Driving a Car2go Fortwo costs you 35 cents a minute. You can also rent the cars by the hour ($12.99, which makes sense if you're going to have the car for more than 38 minutes) or for the day ($65.99). These rates may seem kind of high, but not when you compare them to buying/leasing your own vehicle and taking care of all of the associated costs, like insurance, maintenance and gas. If there's enough gas in the tank to get you where you want to go, then you don't need to bother with filling up. Remember, this is all supposed to be the easiest possible car "ownership" experience. But, if you do take the time to gas up a Car2go vehicle, you get a credit on your account that more than makes up for the time you spent pumping fuel.

Where can you take your Car2go? Well, you can drive a Car2go Fortwo anywhere you like, as long as you're willing to pay for it. To understand the practical limits of Car2go, though, imagine something called a "geofence," an invisible barrier that doesn't even really exist. All the geofence is is a place where you need to be when you end your rental. When the program started, the original geofence snaked around 32 square miles. Recently, the borders expanded to wrap themselves around 52 square miles (click on map to enlarge). With Car2go, what you've really got is kind of like a quantum car: it sort of exists in multiple places at once and is happy anywhere inside a very big parking spot bigger than downtown Austin.

The history of Car2go

Based on the vehicles use, Car2go looks like a program run by Smart, but it's not. Car2go is actually a subsidiary of Daimler North America, and as such is able to get some benefits that competitors like Zipcar don't have. More on that in a minute.

Car2go started in Ulm, Germany in 2008. Today, Car2go operates in two cities in Germany, Ulm and Hamburg, and Austin. There are also tests going on in Vancouver, Canada, which certainly hints at something, doesn't it? Car2go CEO Nicholas Cole told us in Austin that, by this time next year, he hopes to have Car2go operating in two or three other cities in the U.S., with further expansions coming "exponentially" after that.

For now, though, the focus is on Austin. The program started there in November 2009, and was originally for city employees only. In May 2010, it opened to the general public and 15,000 new members joined in the first seven months of the public phase (the number is much higher now). For a long while, there were 200 vehicles in town, but a recent expansion brought in 300 new vehicles, just as the town was inundated by the SXSW hordes. The 200 original vehicles were taken away and are being retrofitted with the improved telematics system that's in the new models and will be re-used in the expansion cities, said Paul Delong, Car2go's director of sales and marketing. How's that for sustainability?

Speaking of which, we've heard since 2008 that Car2go might go electric. In 2011, the status hasn't changed. Delong told us that, "infrastructure is going to dictate how fast we can introduce electric vehicles, but we have to do this." In other words, hold tight.

The number of vehicles the new Car2go cities will get depends on four factors: the number of parking spaces available, current car ownership rates, how diverse the neighborhoods are and the population density. It's not a perfectly transferable number, but in Austin's 52 square miles there are 105,000 target drivers and just 300 cars. Cole told us that he doesn't see a lot of vehicle reservations in Austin, which is a good sign that there are enough Fortwos around for the 15,000-plus members.



Austin is a good fit for Car2go. You have progressive citizens and lawmakers there, as well as a large population of potential drivers at the University of Texas at Austin. Delong said the most surprising demographic group of drivers was the retirees and empty nesters who live in or near downtown.

The city, too, has been a good partner, right from the start when only city employees could use the vehicles. Today, the special status continues through a deal where city employees get to use the cars and no one driving a Car2go vehicle needs to pay for city parking (these sorts of deals will most likely also be true in whatever cities Car2go expands to). There are also some special private deals that have been worked out, like at the Whole Foods flagship store.

Here's another reason sunny Austin is a good test bed. All of the 300 new cars have solar roofs that keep the always-on GPS powered up and cool the cabin to match the ambient temperature so you're not blasted with a wave of heat when you open the door. Smart fans will note that no other Fortwo model has this kind of roof, which was created after driver feedback reported issues with the heat and dead batteries. Another innovation pioneered in the Car2go Fortwo is the touchscreen radio and navigation screen. No other Mercedes-Benz vehicle has a touchscreen right now, but the new S-Class models will in the near future. Through Car2go, Daimler is able to get new technologies into real-world test situations and get feedback from a lot of different users in almost no time.



The problems (yes, there are plenty)

Speaking of feedback, here's our biggest complaint after spending an afternoon with a test vehicle: you can't play your own music. The cars have the Fortwo's standard aux-in jack in the glove compartment, but there's no way to turn that input on. Car2go CTO Helmuth Ritzer told us that having the aux-in jack in these cars is an accident. That may sound wrong, especially in a town as in love with music as Austin, but Car2go doesn't want to let people plug in their iPods because it's too easy to leave them behind. With so many people getting in and out of these cars every day, that's a big mess Car2go wants to avoid. Remember, the idea here is to keep everything simple and not overwhelm the driver. The new nav system doesn't have stopover options, for example.

Okay, we can understand that, but then why can you only pick from eight pre-selected radio stations (two of which are NPR stations, by the way)? It's not like someone's going to leave a tuning dial behind. Ritzer smiled and said, "Yes, we're going to allow people to change the radio station." So that's obviously been submitted as a complaint, too.

Those are just little things. A bigger issue is what happens when two people converge on a Car2go Fortwo at the same time. Delong said this situation leads to the "Car2go stare," where each party recognizes the other is going for the same car, but this, too, often takes care of itself. Sometimes people give each other a ride, other times, one person needs to walk a bit farther to find another available vehicle.

Then there are the cases where things aren't as friendly. While in Austin, we independently met some Car2go members to see what it's like to actually live the carsharing lifestyle. Some people wished the Fortwos could more easily carry a bike. Oh, and who wants to check the car for exterior damages when it's raining?

Then someone told us a story about taking a Car2go Fortwo out for a joyride the night the city got hit with a freak, three-inch snowfall this winter. A few drinks, someone else's membership card and the joy of making donuts in the snow led to a crashed car, which we heard the driver just left on the side of the road. He claimed that the only repercussion was that his friend's account was canceled. According to Delong, though, this is only the first step. Car2go's procedure after an accident is to investigate what happened and, possibly, charge the driver with the deductible or the repair costs. Often, if people are in an accident, they self-report or come clean when Car2go comes around asking questions. Given all the work Car2go has done with the city to establish the program, it has a good relationship with the police, which can help the company figure out what happened. These may be shared and temporary cars, but the repurcussions of what you do in them can be long-lasting.

There are other big-picture problems, too. It's unlikely that a Car2go member in Austin will travel to Ulm, but if she did, she couldn't use the Car2go cars there. In fact, Ulm Car2go users can't even use the Hamburg cars, since Daimler runs the Ulm program (as it does in Austin) while the Hamburg project is run by Daimler and Europcar. There are plans to make all of these memberships work with each other – especially once the North American expansion begins for real in a few months – but currently, Car2go is a bunch of islands.

The biggest question, of course, is whether Car2go is profitable. Neither Delong nor Cole would say one way or the other, but Cole did say that, "We're in this to make money, but right now we're still assessing and investing." We'll take that as a no.


Carsharing/ownership/WTFisthis (beta version)

We understand if Daimler doesn't care if it makes any money right now, because this is about something bigger than cash. Car2go represents a serious paradigm shift for a company that exists to sell cars. With Car2go, instead of selling vehicles, Daimler is basically selling seat time. It's a very forward-thinking project, and it reminds us a bit of Chris Bangle's talk about the future of urban mobility. If nothing else, Car2go is an early, early version of some of Bangle's ideas. Ritzer even said that, coming soon, the cars will have the ability to transfer a driver's navigation destinations and last-heard radio station into each new car they rent. And there's more to come. With what is basically a smart phone in the dashboard, the telematics system will begin pushing the community aspect hard; think things like integrating online profiles with the car (Facebook, Gowalla, Foursquare, etc.) and automatic location tweets (controlled by the driver). "We will exploit that to the maximum," Ritzer said.



Changes like this can be made quickly, since Car2go is Daimler's project (told you we'd get back to this). Currently, Car2go buys the cars from Daimler and they are upfitted at the local Smart dealership. In the future, Car2go models will come from the factory with all the special carsharing parts installed, and software updates can be pushed out over the air. Here, too, the idea is simplicity. Instead of occasional big updates, the touchscreen system would get new features a little bit at a time. This way drivers won't have to relearn everything all at once.

Ideas like this are how Daimler is trying to stay ahead of similar OEM carsharing arrangements. DriveNow, the just-announced BMW/Sixt carsharing deal in Germany, for example, has BMW supplying the vehicles and Sixt running the IT.

Then there's Zipcar, the carsharing group that already has a presence in 31 states and Washington, D.C. How can Daimler compete with this sort of head start? Maybe by not competing at all. Zipcar recently set up shop at the UT campus in Austin, but Delong and Cole both said they see Zipcar as a compliment to Car2go, not competition. Zipcar offers bigger vehicles, for one thing, that serve different purposes (try using a Fortwo to go get a bunch of furniture at IKEA). This balance could someday change – there's nothing stopping Daimler from using other models in Car2go – but if you're going to share cars in an urban environment, the Fortwo is an awful good choice. Still, Delong wasn't afraid to take a swipe at Zipcar, too, saying it has the "umbilical cord" problem, where you need to return the vehicle to the spot where you picked it up. Why choose that when you can have the easy freedom of a cheap, one-way rental?

So far, it seems like Daimler's big experiment is working. There are hiccups, sure, and the company is clearly still working out the kinks, but for the most part, the system just seems to work. People like the simplicity of getting in a car they find on the side of the road and leaving it somewhere across town for the next person. There seems to be a "natural gravitation" of the vehicles always getting to where they need to be, implying that, done right, tether-free carsharing fits with the breath of a city. It does in Austin, at least, the town that prides itself on being weird. Will Daimer discover the same easy success in the next American Car2go city? Answering that question might be the only non-simple part of this whole equation.

Our travel and lodging for this media event were provided by Daimler.