Intensity of competitive rivalry: LOW
There is a mutual impact between car sharing activities and the car rental business. New business models are being introduced and, as traditional car rental companies continue to provide hourly rental services and car sharing options.
There are key international companies operating in the category of car rental (Table 1). However, despite the significant growth (car rental value sales grew by 14% in 2013) and the presence of international car rental brands, the category of car rental is considered to have not reached its full potential.
Table 1. Car Rental Brands by Key Performance Indicators, 2013
| Utilisation (%) | Fleet size (‘000cars) | Avg.# of Transactions Per Car | Avg. Rental Duration | |
| Avis | 91.8 | 0.2 | 83.7 | 4.0 |
| Dollar Thrifty | 53.2 | 0.6 | 46.3 | 4.2 |
| Eleks-Polyus | 34.3 | 0.3 | 29.8 | 4.2 |
| Europcar | 72.5 | 0.3 | 66.2 | 4.0 |
| Hertz | 69.2 | 1.5 | 56.1 | 4.5 |
| Others | – | 7.9 | – | – |
| Sixt | 78.7 | 0.6 | 59.8 | 4.8 |
| Total | – | 11.5 | – | – |
Source: Euromonitor International
In case of car sharing, there are only TWO officially registered companies, which operate on Russian market: Anytime in Moscow and Streetcar in Saint-Petersburg.
Bargaining power of suppliers: MODERATE
In oder to make the whole car sharing system really effective, there is a need to work with city municipalities to secure parking spaces for its customers and charging zones. Car sharing service companies also have to be able to share parking spaces, combined mobility packages and marketing activities with public transport operators. In addition, there are infrastructure suppliers, which provide the infrastructure needed to manage and maintain vehicle fleet.
Bargaining power of buyers: HIGH
Fuel and insurance are the largest expenses, though drivers who need to park daily in the city center may see their costs double thanks to the fees for parking.
The perceived inconvenience of not owning a vehicle and persisting consumer attitudes about cars as symbols of status, success, privacy and freedom (Table 2).
Table 2. The importance of car ownership: Reasons to buy a new car
| Russia | Germany | France | UK | Italy | |
| Sample size | 1587 | 1012 | 1001 | 1008 | 1001 |
| New model | 44% | 8% | 8% | 7% | 12% |
| Damage of the last car | 25% | 61% | 53% | 51% | 54% |
| Change of job place | 18% | 11% | 7% | 14% | 13% |
| Change in marital status | 14% | 15% | 25% | 15% | 19% |
| Hobby | 10% | 3% | 1% | 1% | 2% |
| Gift/Inheritance | 6% | 15% | 5% | 9% | 11% |
| Other | 43% | 18% | 23% | 27% | 18% |
Source: Autonews
Threat of substitutes : HIGH
Main substitutes for the carsharing are following:
1. Bike rental services
Only one official bike rental service network – Velobike (in Moscow). In that case what is important to consider is a relative price performance of substitute (Table 3).
Table 3. Tariff options for bike rent
| “7 days”: user charge 250 RUR + time payment | |
| “1 day”: user charge 100 RUR + time payment | |
| Time payment (variable part): | |
| < 30 min | free |
| < 60 min | 30 RUR |
| <120 min | 90 RUR |
| <180 min | 300 RUR |
| < 360 min | 900 RUR |
Source: Velobike. Price List
2. Public transport
- Aside from walking or cycling, public transportation is the most affordable and environmentally conscious option
- Rates differ from city to city but for as little as 50 – 100 RUR, you can travel from one side of the city to the other
BUT:
- no direct transportation from Point A to Point B: several stops between departing point and destination
- timely
- the lack of night-time services
3. “Official” taxis and private transporters
The use of taxi (Table 4) is still considered to be an expensive option for russians. Despite its convenience in terms of direct transportation, there are safety concerns.
Table 4. Taxi types in Russia
| Official taxis | Private transporters | |
| Tariffs | Fixed pricesFor a 5km run within a center of city: 200-400 RUR depending on the region | The price is negotiated before travelling to the destination – price discrimination for foreigners |
| Average cost per travel | St. Petersburg: around 500 RUR Moscow: about 700 RUR |
St. Petersburg: around 300 RUR Moscow: about 500 RUR |
| Order mode | By phone (10-30 min of attendance) Via internet (10-30 min of attendance) On the road |
On the road |
| Special comments | Predictability of the drivers` behavior | Undesired behavior of a private driver (sometimes) |
Source: Guarant-InfoCentre
4. Car ownership
According to Reuters, there are currently 290 cars per 1,000 Russians, but the market is expected to grow by 6 percent each year through 2020 to reach annual sales of $4.4 million.
BCG has forecasted that Russia is set to become the largest car market in Europe by 2020 and the fifth largest market in the world.
However, in big cities (such as St.Petersburg and Moscow), there is no need to own a car on a full-time basis.
In addition, referring to Berkeley’s Transportation Sustainability Research Center (TSRC) the important fact to consider is that each car sharing vehicle can reduce the need for between 9 and 13 private automobile.
Threat of new entrants: MODERATE
Car sharing is a highly capital intensive business, with low margins, and it requires heavy investment in fleet, what can be considered as the barriers to entering the market. In addition, car sharing service implies to be connected to the internet and sensor networks. On the one hand, such technologies allow for improved, more ecological vehicle operations, i.e. more efficient routing to avoid traffic. On the other hand, in the culture of active use Internet for services is only emerging. Moreover, cultural aspect should also be considered: car as symbol of status and freedom and stickiness to traditions.
TO SUM UP: The car sharing industry is Russia in only at the initial stage of its development as there are no strong players on the market. For ZipCar, by introducing the carsharing services in major Russian cities, there is an opportunity to gain the attention of “first movers” and successfully expand the business. However, the most challenging aspect is to change the consumers’ attitudes for transportation within the city.
Car-sharing in Russia 