Car-shar­ing in­dus­try could make sig­nif­i­cant in­roads

Kyiv Post - - Business Focus - BY DENYS KRASNIKOV [email protected] Taras Get­man, founder and CEO of car-shar­ing ser­vice Get­man­car, opens the door of a Ravon R2 hatch­back. Get­man has in­vested in 100 such cars to start a car-shar­ing busi­ness in Kyiv. His cus­tomers can pick up a Rav

Look around and see if there's a parked elec­tric Nis­san Leaf or a small Ravon R2 some­where nearby. If there is, the car might be avail­able for a ride.

These ve­hi­cles are spread across cen­tral Kyiv and Odesa and can be rented by the minute, and sim­ply un­locked with a mo­bile app.

Such a ser­vice is called free-float­ing car-shar­ing, and its cus­tomers can pick up and re­turn the ve­hi­cle any­where within a cer­tain area. Free float­ing cars are mainly used for short one-way trips — shop­ping or other leisure — in city ar­eas.

And while for­eign free-float­ing providers are mostly big en­ter­prises like Ger­man BMW or Rus­sian Yan­dex — which view their in­vest­ment in such ser­vices as a chan­nel to pro­mote their brands and not to reap a profit — Ukraine’s car-shar­ing busi­nesses are run by two en­trepreneurs, who are try­ing to make some money from it.

The lo­cal pi­o­neers are al­ready up and run­ning in Odesa and Kyiv, and de­spite dif­fi­cul­ties, they are happy to be the first to fill this niche in Ukraine.

Odesa car-shar­ing

The Mo­bileCar ser­vice was the first to try out the car-shar­ing busi­ness model in Ukraine.

The com­pany bought 40 elec­tric Nis­san Leafs and parked them around Odesa. Mo­bileCar’s users can pick up cars when­ever they find them, drive around the town, and leave the cars in the down­town area.

Mo­bileCar founder An­drey Zhukovsky brought the cars to Ukraine him­self. For sev­eral years he has been im­port­ing Nis­san Leafs to Ukraine and re­selling them. Then in July 2017, with some ex­tra cars left in his in­ven­tory, he de­cided to start a car-shar­ing busi­ness.

Zhukovsky prac­tices what he preaches — he doesn’t own a car him­self but al­ways rents Mo­bileCar’s ve­hi­cles when he needs one. He says it’s much more con­ve­nient and en­vi­ron­men­tally friendly.

To use Zhukovsky’s ser­vice, users have to down­load the Mo­bileCar mo­bile ap­pli­ca­tion and reg­is­ter, up­load­ing pho­tos of the user’s pass­port (or a res­i­dence per­mit) and a driver’s li­cense.

As soon as it’s done, all new­com­ers re­ceive a call from an in­struc­tor, who makes an ap­point­ment to teach them how to use the cars and brings a con­tract to sign. That’s the last off­line ex­pe­ri­ence for the client, as the com­pany pro­vides the rest of its ser­vices ex­clu­sively via its app.

In the app, car-renters find a car on the map and re­serve it. The book­ing a car is free for the first 20 min­utes, fol­lowed by a $1 fee for ev­ery 20 min­utes there­after.

Clients then go to the car, un­lock it through the app, and start us­ing it. It costs $7 per hour to drive the car. It can also be rented for a day ($35) or even a week ($22).

The iOS or An­droid app is linked to the client’s bank card and au­to­mat­i­cally charges the fee. Mo­bileCar main­tains its elec­tric cars it­self, charg­ing and wash­ing them. No de­posit is needed, and any­one with three years of driv­ing ex­pe­ri­ence can use the ser­vice.

Those who rent cars for long pe­ri­ods will have to charge them them­selves, how­ever. Charg­ing sta­tions can be found in the app. The first charge is free, but all sub­se­quent charges cost $4. A Nis­san Leaf can run for up to 135 kilo­me­ters, or 85 miles, on a sin­gle charge.

The cars are in­sured, but users have to pay the first $300 of re­pair costs if they are in­volved in a road ac­ci­dent.

Zhukovsky says his busi­ness is thriv­ing in Odesa. “There are traf­fic prob­lems in Odesa… but we’re do­ing fine,” he said. He now plans to ex­pand his fleet of elec­tric cars and en­cour­age more peo­ple in Odesa to use them.

Zhukovsky would not dis­close any fi­nan­cial in­for­ma­tion or other de­tails of his fu­ture busi­ness plans.

“I will just say: if it wasn’t a lu­cra­tive busi­ness, I wouldn’t run it,” he said.

He firmly be­lieves that Ukrainian car-shar­ing will take off.

“It has worked out ev­ery­where else in the world, so it will work out in Ukraine,” he said.

Kyiv car-shar­ing

Busi­ness­man Taras Get­man is also bet­ting that the car-shar­ing busi­ness will work in Ukraine. He has set up his own ven­ture, but in Kyiv, and with petrol-en­gine cars.

Six months af­ter Mo­bileCar launched in Odesa, Get­man in Jan­uary 2018 came up with Get­man­car, in­vest­ing in 100 small hatch­back Ravon R2 cars. These are light ve­hi­cles with au­to­matic trans­mis­sions, de­signed for cities, with four airbags, and which have petrol en­gines.

The ser­vice in Kyiv works in a sim­i­lar way to Mo­bileCar, via an app, but has dif­fer­ent tar­iffs and has a fur­ther limit — only adults older than 25 years can use the ser­vice.

Get­man­car has three tar­iff plans: $2 for 70 min­utes and then 25 cents per kilo­me­ter; $7 for three hours and then 18 cents per kilo­me­ter; $22 for a day and 16 cents per kilo­me­ter.

Get­man­car pays for the petrol, but users have to fill up the car. Ukraine’s OKKO gas sta­tions will pro­vide gas for free, while to fill up at other chains driv­ers will have to take a photo of a their re­ceipt and send it to Get­man­car sup­port to get a re­im­burse­ment.

Blam­ing the “slow on the up­take” Ukrainian mar­ket, Get­man­car’s founder Get­man says he hasn’t man­aged to re­turn his in­vest­ment “even a lit­tle.” Each of the 100 Ravon R2s cost Get­man $7,500.

At the same time, he claims ev­ery one of his branded cars are be­ing used at least three times a day and that he needs at least three times as many cars. In to­tal, Get­man be­lieves Kyiv, with its 3 mil­lion pop­u­la­tion po­ten­tially has the de­mand for 3,000 ready-for-shar­ing cars.

Ac­cord­ing to Get­man, 10,000 peo­ple have al­ready down­loaded and in­stalled the Get­man­car mo­bile app since the ser­vice’s launch in Jan­uary. But he’s “un­happy” at it’s a slow growth:

“In neigh­bor­ing coun­tries, sim­i­lar ser­vices have al­ready at­tracted 35,000 peo­ple,” he said.

Get­man says his car-shar­ing ser­vice is “for mid­dle class peo­ple who are look­ing for al­ter­na­tives” to three things: taxis, tra­di­tional car rentals, and car own­er­ship.

Get­man­car has had some bad press as well. Af­ter be­ing dubbed “a ser­vice with opaque and ex­pen­sive pric­ing” by Ukrainian on­line tech jour­nal, Get­man­car failed to for­mu­late a pos­i­tive re­sponse to crit­ics, sim­ply ban­ning peo­ple who said they didn’t like the ser­vice.

The ser­vice has also been crit­i­cized for bawdy nam­ing of its three tar­iff plans, Po, Pi, and Vzhukh. When placed to­gether on ban­ners, and pro­nounced out loud, this reads “zoom into a butt” in Ukrainian. The com­pany is also no­to­ri­ous for its vi­ral, hy­per-mas­cu­line ad­ver­tis­ing.

An­other thing that has put many peo­ple off us­ing Get­man­car is that in the case of a road ac­ci­dent, even if the Get­man­car user is not to blame, they will have to cover the first $750 of the cost of re­pair­ing the car ac­cord­ing to the firm’s partly fran­chised in­sur­ance plan. There are tar­iff plans with full in­sur­ance, but these cost more.

Get­man, how­ever, is con­fi­dent his car-shar­ing busi­ness will be a suc­cess, and thinks that peo­ple just need to try to use it, in­stead of read­ing about it.

"Only those who play chess can win a game of chess," he said, say­ing that only a few peo­ple say they don’t like the ser­vice af­ter they try it.

The com­pany next plans to in­tro­duce dy­namic tar­iffs that change in ac­cor­dance with how long the car is used. He also wants to in­tro­duce paid park­ing for his com­pany’s cars so that they are not just used in the city cen­ter. He also hopes to add lux­ury cars to the ser­vice.

Get­man thinks car-shar­ing will bloom in Ukraine, but it all de­pends on lo­cal of­fi­cials, who “need to solve the abom­inable park­ing sit­u­a­tion in Ukraine,” he said. Park­ing is mostly un­reg­u­lated, and driv­ers park any­where where it’s not for­bid­den, in­clud­ing on pave­ments.

He thinks this dis­cour­ages peo­ple from us­ing car-shar­ing. As for those who want to use the ser­vice to save time, it can mean they end up wast­ing time, look­ing for a free park­ing place.

“But as soon as the park­ing and gen­eral road reg­u­la­tions im­prove, more peo­ple will be will­ing to use car-shar­ing,” Get­man said.

The Kyiv Post’s tech­nol­ogy cov­er­age is spon­sored by Cik­lum and NIX So­lu­tions. The con­tent is in­de­pen­dent of the donors.

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