Russia gives look at future of car-sharing
When Evgeny Barkov owned a car, the 31-year-old software salesman would often look out of his Moscow window at it with disgust. His possession sat unused more than 90 percent of the time, while sucking up money and causing him anxiety that it might break down.
He finally took out a calculator, added up all the costs and determined he was better off selling his grey Peugeot and switching to car-sharing services such as Yandex.Drive, which offers cars ranging from basic Kia models to flashy Porsches.
“That investment brought me nothing but trouble,” said Barkov as he wound through Moscow’s snowy streets in a white Skoda sedan with a bright yellow stripe on the side and Yandex’s software on the dashboard console. “Now, I’m just paying for using.”
The venture — set up last year by a local internet company — flooded the Russian capital with more than 7,000 cars to rent for as little as 5 rubles (8 cents) per minute, including fuel, maintenance and parking. That compares to 41 cents a minute for Daimler’s Car2Go in New York and is an offer too good to pass up for a growing number of Muscovites.
Almost out of nowhere, car-sharing in Moscow boomed, with the number of vehicles more than tripling last year. The city has the biggest shared fleet in Europe and the secondlargest in the world. The rapid shift spells trouble for automakers by providing a blueprint for how a deeppocketed technology player can move quickly to woo consumers with alternatives to traditional car ownership.
“We’re approaching a point that could flip the entire car market on its head,” said Shwetha Surender, a London-based analyst with consultancy Frost & Sullivan.
To be sure, automakers are seeking to head off the risk. Daimler and BMW merged their car-sharing ventures to gain greater scale. Volkswagen is testing its MOIA ride-sharing service in Hamburg; General Motors has invested in Lyft Inc.
They all somehow missed Russia’s biggest city, with more than 12 million people. Daimler’s Car2Go, BMW’s DriveNow and Avis Budget Group Inc.’s Zipcar are all no-shows, even though its notoriously clogged streets — Moscow is ranked as the world’s second-worst city for traffic congestion — were ripe for disruption and authorities were practically begging car-sharing companies to invest.
Paid parking was introduced in the city center in 2013 and is generally booked via app — training residents to use smartphone features for their transport needs. A day’s worth of curbside parking could cost about $30, making it the largest daily expense for many Russian drivers. Car-sharing providers get discounted rates of roughly $400 a year.