Car-sharing industry could make significant inroads
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.
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.
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 AIN.ua, 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.