MARKET FEASIBILTY STUDY:

CAR SHARING IN PORTLAND, OREGON

Rex Burkholder
Bicycle Transportation Alliance

July 10, 1997

In January 1997, the Oregon Department of Environmental Quality contracted with the Bicycle Transportation Alliance and its subcontractors (Research Into Action and Scott Engineering) to conduct a Feasibility and Business Planning Study for Car Sharing Mobility Services in Portland, Oregon. The two major components of the study are a market feasibility study and a business planning study. This document reports on the market feasibility study.

The first phase of the market feasibility study was a preliminary assessment using socio-demographic data. The purpose of the assessment was to identify the preferred neighborhoods for consumer research on car sharing. The second phase was to conduct focus groups with residents of the targeted neighborhoods. The purpose of the focus groups was to obtain an initial assessment of consumer interest in car sharing, and to provide a preliminary look at consumer response to car sharing for use in developing a survey from which to measure market potential.

The third phase of the feasibility study was to conduct a survey of licensed drivers over 21 who live in the study area. The purpose of the survey was to:

• Estimate market potential for a car sharing club,
• Determine response to different features of the car sharing club, and
• Identify the characteristics of those who were "very likely" joiners.

Our preliminary assessment confirmed that the inner Northwest, Southwest, Southeast, and Northeast neighborhoods were the most likely area for car sharing to be effective. We conducted two focus groups, each with 10 licensed drivers over 25 who lived in the study area. The focus groups demonstrated that there was interest in car sharing and that the concept of car sharing could be explained and understood with a brief introduction. The focus groups also provided valuable information on key issues of interest and concern for measurement in the survey.

The survey was implemented by phone. A sample of 385 drivers over 21 completed the survey. The survey sample exhibits some striking differences from the 1990 Census data for the study area. For instance, the survey sample had 76% college graduates, while the Census data for the study area indicated 34% college graduates among those over 21. These differences were found to be insignificant in explaining interest in joining a car sharing club because attitudes and behaviors – not demographics – predicted interest in car sharing..

The results of the survey were used to estimate market potential for a car sharing club in the study area. We concluded that 4,804 (11.7%) of the drivers over 21 in the study area believe they would be very likely to join a car sharing club if one were available in their neighborhood. The percent varies slightly by neighborhood. This finding is at the 95% confidence level, ±4%. Of the drivers who are very likely to join the car sharing club, we found that the idea was seen as both practical and appealing for the driver to be interested in joining. We further found that the appeal of car sharing varied depending on the level of education completed by the driver.

Some of the key findings that affect car sharing club structure and operations include:

• Regular and occasional bus riders are significantly more likely to be interested in joining a car club than once-in-a-while riders or those who never ride.
• Neither education level, income level, or number of cars owned were significant predictors of interest in joining a car club.
• Those most likely to join are willing to walk further distances to reach the car and to pay higher monthly fees than those only somewhat interested in joining a car club.
• Of those most likely to join a car club:
• 47% use an economy or compact car 1-5 times a week.
• 54% use a pick-up truck 6 or more times a year.
• 80% would be likely to sell their primary car if car sharing worked for them.
• 61% would be likely to sell their secondary car if car sharing worked for them.
• 57% find all key locations acceptable; 21% prefer the key post option.
• 46% find no objections to the possible fees, 23% object to the hourly fee.
• 52% are willing to walk 5-10 minutes to reach the car-sharing car.

Those drivers who have a college degree and were most likely to express interest in joining a car sharing club were: more likely to have cost-conscious attitudes about car ownership, more likely to express preference for a simpler lifestyle, more likely to ride the bus regularly, and more likely to drive their secondary car more than 10,000 miles per year.

Those drivers who did not have a college degree and were most likely to express interest in joining a car sharing club were: more likely to be in the age range of 35 to 44, less likely to love their car and the activities associated with it, more likely to have an income of $30,000-$50,000, and less likely to need a car to run errands for children or other household members.

These differences suggest that a marketing campaign for a car sharing club seeking to expand and grow should include different messages about car sharing, using different media to target different education levels. Specifically we recommend:

• Messages about car sharing should stress value gained from the cost savings of car sharing, the value of a simpler lifestyle, the ability to replace secondary cars, and the elimination of the activities associated with owning a car (e.g., washing, maintaining, etc.)
• Marketing to those with college degrees could be successful through advertising that regular bus riders will see, and by using venues targeted to the college educated. Incentives associated with bus riding could also be appealing, as well as stressing ways to link car sharing to bus riding.
• Marketing to those without a college degree should target media sources that attract adults with few dependents, age 35-44, with incomes of $30,000-$50,000.

The type of marketing campaign for a pilot project, however, will need to be smaller in scale, focusing on the themes identified in this study.

In January 1997, the Oregon Department of Environmental Quality (Oregon DEQ) contracted with the Bicycle Transportation Alliance and its subcontractors (Research Into Action and Scott Engineering) to conduct a Feasibility and Business Planning Study for Car Sharing Mobility Services in Portland, Oregon.

The two major components of the study are a market feasibility study and a business planning study. This report documents the market feasibility study. The following briefly describes car sharing and then discusses the purpose of the market feasibility study.

Car sharing is a mobility option. Several car sharing organizations, each with their own organizational structure, have developed in European and Canadian cities. A car sharing organization consists of a group of individuals who share a fleet of cars. The vehicle purchase or lease agreements, fuel costs, maintenance, insurance, and repair costs are borne by the organization.

To reserve vehicles, members phone a 24-hour reservation line, then pick up their car at a permanent location convenient to their residence, typically within walking distance. The goal of car sharing is to provide access to cars when people need them, without each person having to own their own car with the associated high fixed costs. Car sharing is attractive because it promotes auto use as one option along with transit, carpooling, bicycling, or walking.

The only large, publicly available car sharing organization in the United States began in 1983, in San Francisco. The organization, named STAR (Short Term Auto Rental), began as a pilot project with 350 members. Due to poor business planning, the project was terminated by 1985. This history led Oregon DEQ and other transportation planning agencies in Portland who are on the Oversight Committee to request proposals to conduct a market feasibility and business planning study of car sharing for Portland, prior to implementing a pilot project.

The first phase of the market feasibility study was a preliminary assessment using socio-demographic data. The purpose of the assessment was to identify the preferred neighborhoods for consumer research on car sharing. The second phase was to conduct focus groups with residents of the targeted neighborhoods. The purpose of the focus groups was to obtain an initial assessment of consumer interest in car sharing, and to provide a preliminary look at consumer response to car sharing for use in developing a survey from which to measure market potential.

The third phase of the feasibility study was to conduct a survey of licensed drivers over 21 who live in the study area. The purpose of the survey was to:

• Estimate market potential for a car sharing club,
• Determine response to different features of the car sharing club, and
• Identify the characteristics of those who were "very likely" joiners.

The report includes five chapters following this introduction. Chapter 2 provides a discussion of the preliminary assessment. Chapters 3 and 4 discuss the focus groups, with Chapter 3 focusing on the methodology and a discussion of the characteristics of focus group participants and Chapter 4 discussing the results of the focus group discussions.

Chapters 5 and 6 discuss the survey of study area drivers over 21. Chapter 5 focuses on the methodology of the survey and a discussion of the characteristics of the respondents. Chapter 6 presents the results of the survey including an estimate of the market potential, responses by potential joiners to various features of a car sharing club, and a discussion of market segmentation characteristics.

As the initiating element of the marketing research, we conducted a preliminary assessment of potential locations for car sharing. The preliminary assessment provided an empirical basis for focusing the research and business planning efforts on specific geographic areas in Portland. The preliminary assessment included identifying indicating factors, researching available data, and making conclusions in terms of recommended focus on particular Portland neighborhoods. A geographical information system (GIS) analysis of a database of licensed drivers was then used to select the research population for the identified target area.

The request for proposal from Oregon DEQ indicated interest in three location types — a downtown neighborhood location, a suburban community that is rail or transit accessible, and a densely populated inner city neighborhood. All three location types were examined in the preliminary assessment.

The first task was to establish a list of indicating factors. These may be thought of as criteria for the target market of potential car sharing users. In general, indicators of the potential for car sharing are marginal automobile use, where using a car is not as desirable or as necessary. Our initial set of indicating factors are listed below.

• Interconnected, grid-like street system;
• Close-by work, schools, services and shopping;
• Topography suitable for walking and bicycling;
• High residential density;
• Transit stops that are accessible on foot;
• High transit service density;
• Inadequate vehicle parking;
• High proportion of population use transit, bicycles and walk;
• Vehicles driven less than 5,000 miles per year.

The source for these factors included The Car Sharer’s Companion by Graham Clarke and Tom Davis, an urban planning practice project for Portland State University, and hypotheses made by the car share project consulting team.

We contacted several sources to identify what data might be available for each of the indicating factors listed above. We located three data sources: a travel behavior survey performed by Metro, the 1990 Census data for the Portland PMSA, and the Portland Neighborhood Information Profile.

The most detailed data available is the travel behavior survey done by Metro in 1994. This data set was available in electronic format, however, it is very large and therefore difficult to work with without large computer capacity. In addition, the sampling frame for the Metro data was insufficient to clearly identify results by neighborhood.

The Census data for the Portland PMSA provides data for 145 census tracts in the city. The data of interest was trip-to-work information and vehicles available by household. Unfortunately, this data set was not readily available in electronic format.

The Portland Neighborhood Information Profiles were compiled by the Office of Neighborhood Associations and the Center for Urban Studies at Portland State University. This data set was available in Excel spreadsheet format and was derived from 1990 Census data. Ninety Portland neighborhoods are described in the data. Like the census data, available were trip-to-work information and vehicles available by household. In addition, the area of each neighborhood and the number of households was available to calculate average household density. Figure 1 displays the data for all neighborhoods, ranked by number of vehicles per household.

Two other sources for information were pursued: parking problem data from the City of Portland and transit service density from Tri-Met. Although there are anecdotal descriptions of areas with parking problems in Portland, there are few formal studies that describe the magnitude of parking difficulties. A table of route frequencies of transit was analyzed, but this failed to show any useful relationship between service density and other known characteristics such as non-auto commute mode choice.

The Portland Neighborhood Information Profiles was selected as the most viable data for the preliminary assessment. Of the nine initial indicating factors listed above, three were measurable using this data set. The number of vehicles per household was considered as a proxy for parking problems. The following variables were used:

• Household density,
• Non-auto commute mode, and
• Number of vehicles per household.

We calculated these variables for each of the 90 Portland neighborhoods using the Portland Neighborhood Information Profiles. The results were sorted into a list of descending non-auto commute mode choice. Neighborhoods with the highest non-auto commute mode were considered the most suitable to car sharing and were recommended for additional market research. The data showed a strong inverse relationship between non-auto commute mode and the number of vehicles per household, and an obvious but less-strong proportional relationship between non-auto commute mode and household density.

The neighborhoods with the highest non-auto commute mode were examined in terms of geographic location and contiguity. This analysis identified 19 Portland neighborhoods, including the Lloyd District and several areas adjoining these neighborhoods, as the preferred location for the study area. In total, the neighborhoods are a roughly rectangular area centered on the Burnside Bridge. Figure 2, provides a map of the study area’s 19 neighborhoods.

Compared to the close-in east and west neighborhoods, outer Portland and suburban neighborhoods had very low non-auto commute mode portions, low household density, and a high number of vehicles per household. Outer suburban neighborhoods also do not typically have some of the other features noted for car sharing, such as a grid-like street system and streets and sidewalks suitable for bicycling and walking. The Oversight Committee concurred that these neighborhoods offered significantly reduced opportunities for car sharing.

A database of licensed drivers in Oregon, as of January 1997, was obtained as the basis for the focus group and telephone survey population. As only those in the study area neighborhoods would be surveyed, GIS analysis was used to select the survey population subset.

The database of licensed drivers in Oregon contained 1,873,211 records. The database was first analyzed to select licensed drivers over age 25, as of January 1, 1997. Using geocoding available in the GIS software, we selected those drivers with addresses located in the Portland neighborhoods shown in Figure 2. The resulting data set contained 36,750 drivers over age 25 from the focus neighborhoods. A subsequent analysis provided an estimate of 40,930 drivers age 21 and older in these neighborhoods. These data became the population from which the survey sample was drawn.

The following 19 neighborhoods are included in the study area:

Neighborhoods in Portland are formally recognized by the City and have established boundaries and neighborhood associations to represent their interests. There are several minor exceptions to this which are marked by an asterisk in the list above. Three of these are small areas between recognized neighborhoods that are considered in dispute insofar as their boundaries. The Lloyd District is represented by a business association rather than a neighborhood association, as it has a relatively small number of residents and a large number of retail and office businesses. These "neighborhoods" had the same indications for car sharing as the other, formally recognized, neighborhoods.

This chapter briefly describes the two focus groups conducted to study car sharing in Portland, Oregon. We also briefly discuss the characteristics of the 20 participants in the focus groups. The following chapter presents the results and conclusions from our analysis of the two focus group discussions.

As discussed in the preliminary assessment, we identified 36,750 licensed drivers in the study area who were over 25 years of age. Using this list, 1,000 drivers were randomly selected for recruitment to two evening focus groups. Two facilities were selected for the focus groups in order to ensure easy access by multiple transportation options. One facility was in the downtown area and the other was in inner Southwest, along Barbur Blvd.

A set of screening questions was developed for use in recruitment. (See Appendix A for a copy of screening questions and letters sent to participants.) The key goal was to identify a sub-set of licensed drivers who might have a positive disposition to the idea of car sharing. The questions used for screening were:

1. Attendees had to have a current drivers license;
1. Attendees had to use alternative forms of transportation (walk, bus, or bike) at least 3 times a week; and
1. Attendees had to be willing to consider loaning or borrowing a car.

Table 1 displays the disposition of calls for recruitment. By classifying contacts by eligibility we can begin to make a preliminary assessment of market response. A survey uses at least four callbacks to each phone number. Focus group recruitment relies on only one call to each phone number. As a consequence, the sample is biased toward those who are at home when calling occurs.

Of the 711 phone numbers, 471 did not result in contacts with a person who could be surveyed. Therefore, we calculate that only 240 contacts were made. Of these 240, eligibility remained undetermined for 99 (41%), since they did not complete the survey. Ninety-six (40%) were determined to be ineligible for the focus group, based on the screening questions, leaving 19% eligible, of whom half were willing to attend the focus group.

Twenty people attended the focus groups. Prior to the discussion, we asked the participants to each complete a short survey. Nineteen of the participants were able to complete the survey. This section reports on the results of the survey. A copy of the survey is provided in Appendix B.

Attendees came from nine different neighborhoods throughout the target market area. The neighborhoods were:

NW - Northwest (1) SE - Buckman (2) NE - Concordia (1)

SW - Downtown (3) SE - Hawthorne (4) NE - Hollywood (1)

SW - Goose Hollow (4) SE - Ladds’ Addition (2) NE - Unspecified (1)

(Note, the names the participants provided for their neighborhood do not directly coincide with the official neighborhood names used by the City of Portland Office of Neighborhoods.)

Focus group participants represent a range of ages, educational training, and incomes. Table 2 displays these characteristics.

Of some note, was the limited number of participants over 50 and the fact that all of the participants had at least some college, with almost 60% being college graduates or with post graduate training. Otherwise, participants were fairly evenly distributed over the categories.

Household size ranged from one to four persons per household, licensed drivers ranged from one to three per household, with from zero to five cars per household. Distances regularly commuted ranged from less than one to 20 miles. These data are presented in Table 3. Just as a note, the one person who did not complete a survey reported in the group that she had no car but lived in a household where she shared a car with other household members.

The surveys identified one participant as not owning a car. However, during the focus group discussions, three of the participants stated they did not have a car of their own. One of these is considering purchasing a car and another is considering purchasing a motorcycle. None of those who own only one car are considering purchasing a second car. Three of those who own one car have had two cars in the past and now only have one, one of the people who owns two cars has owned three, and one of the people who owns three cars had only recently purchased the third car.

Four (21%) of the participants have a Tri-Met bus pass and four (21%) use ticket booklets. The other 11 (58%) do not have either. Table 4 displays use of Tri-Met and other forms of transportation for errands and shopping. Table 5 displays how these drivers use their various vehicles.

Car ownership crosses all of these neighborhoods, suggesting that few drivers make choices in where they live by whether they have a car or not. Though some comments in the focus group indicate that choices are made, the surveys did not confirm this.

The mean distance the participants have to go to work is 4.7 miles. Comparing distance to work, to number of cars per household, we found some slight indications that the more cars one has, the more likely the distance to work is greater. However, this is a very small sample. Table 6 displays these relationships.

We developed a script to guide the focus group discussions. A copy is provided in Appendix C. Following an introductory section, the script included three issue areas for discussion. Just prior to the third issue area, we introduced the car sharing concept with a video about a car sharing club in Cologne, Germany. The results are presented for each of the three sections listed below.

• Transportation Behaviors
• Sharing Cars
• Car Sharing Concept

We asked the focus group participants to discuss using and owning cars. First, we asked them to describe the benefits and costs of using a car. Then, we asked them to specifically consider the benefits and costs of owning a car.

Focus group participants generally saw both using and owning cars as increasing convenience. Their comments listed the benefits of using cars as: comfort, convenience, speed, dryness, recreation and sightseeing in the Pacific Northwest, flexible, good for carrying stuff, fun to drive, easier to go out with friends, and can listen to music.

The benefits of owning a car included: there when needed, specific type of car you want to have, you can enjoy the pleasures of a car, ego gratification, can let dependents drive themselves, good for spur of the moment, good for emergencies, less expensive then renting or using cabs. One of the participants also noted that there is investment potential in some cars, such as the third car he had recently sold: "It got to where the car was worth more away from me than with me."

The benefits of owning a second car are: one car will always work, two people can do different things, one can have different types of vehicles, and you can loan the car to others. Some of the comments participants provided on the benefits of using or owning a car are noted in the box below.

We asked participants how important it was to have the car they use located close by. Most felt that it was fine to have it a little ways from their home. Four participants, three women and one man, thought that having it close by was most safe.

Since convenience was mentioned as an overriding concept in both groups, we asked participants to elaborate on what convenience means to them. The comments in the box below define convenience for these participants.

We also asked participants about the negative effects of using and owning cars. Comments on using a car included: parking, rush hour traffic, pollution, safety and danger in traffic, theft from car, and degraded lifestyle.

Asked about owning a car, participants listed costs as the primary negative effect. In addition, they included: insurance, maintenance, gas, car payments, cleaning, hassle, and accident potential. One participant described how owning a car had actually affected where he lived.

A second car was seen as increasing all the other negative effects: more expensive, takes up more time, requires more space, and more gas since the second is "always empty." One person said they experience no negative effects from owning a car, or even a second and third car. The box below shows some of the participants’ general comments about the negative effects of using and owning cars.

Most of these drivers felt licensed drivers should take responsibility for pollution and congestion. Only two did not agree with this, feeling that it is really the responsibility of the car manufacturers, not the drivers. The participants mentioned many things drivers can do: keep car tuned up and meet DEQ requirements, reduce trips, plan trips more, use trains and carpools, bike or bus. Some of the comments are in the box below.

In order to begin our discussion of car sharing, we asked participants to imagine they had decided to share a car with a group of friends, family or neighbors. They had quite a few questions they would ask before agreeing to such an idea:

In addition to these questions, participants commented that they felt one would have to have a lot of respect and good communication between the group for it to work. The box below displays some of their comments about the idea of sharing a car with a group of friends, neighbors or family.

We asked participants how far away the car could be to still be convenient. Two felt it had to be closer than a five minute walk and one felt it could be as far away as a one hour walk. All of the others felt it had to be within a 5-10 minute walk from their home. The one person who was willing to walk up to six miles did comment that he would assume that he would then have the car for several days or that it was a second car. Several people agreed that they would go a further distance for a second car or a specialty car than for a primary car. "I’m willing to drive from NE to Beaverton to rent a U-Haul."

We asked participants whether they would mind having to reschedule a trip, if they called up to use the car and it was already in use. Most of the participants objected to that idea, some very strongly and others less strongly. Four thought it would not be a problem, four thought it would never be okay to have to reschedule. Comments included:

The idea of sharing a car with family, friends and neighbors, could lead to participants giving up a car. Fourteen of the 20 participants thought they might give up their own car if it worked to share a car with others and were cheaper than owning a car. Four said they would never give up their own car and two said they might. Of those who might give up their car, several said they were especially willing to give up their second cars.

The next phase of the focus group introduced participants to the concept of a car sharing club by showing the video described above. The following discusses focus group participants’ initial reaction to the idea after seeing the video, their views about the organization and club features, their reaction to a discussion of likely costs, and reactions to ideas for incentives.

Participants in the two groups had somewhat different responses. Participants in the first group were quite enthusiastic about the possibility of their own participation, while participants in the second group were mainly enthusiastic for others. One person in each group had read about car sharing in magazines. Some of the comments from the first group are presented in the box.

Comments from the second group are presented in the box below.

Both groups expressed similar concerns about whether it could really work well. Specific concern was how peak usage times like weekends and holidays would work, recourse for theft or damage, what criteria would be used for membership (driving record, smoking, ages, kids, etc.), and whether it might be really possible to coordinate with any other cities. Seventeen of the 20 participants were all interested in learning more and possibly trying car sharing after seeing the video. Some of the comments were:

The preferred organizational structure for a car sharing club varied by individual. Seven expressed a preference for a non-profit type organization "like AAA or REI." One wanted to be able to volunteer, two specifically wanted a cooperative type of nonprofit organization as it would provide a piece of ownership and perhaps dividends. Nine wanted a for-profit type of organization. Some of these specifically wanted it to be large, while others just wanted experience and competitive prices. The remaining four saw no difference in type of organization. The following box displays some of their comments.

Specific features received little comment other than car key access. It was seen by all that it was important to have a specific parking place for the cars. All wanted centralized scheduling, most preferred a computerized process, and many wanted access for scheduling to include multiple options: by a phone activated system, by computer, as well as through a phone call to the scheduler.

Five minutes was viewed as the optimum distance to walk to get the car. However, some thought that a short bus ride was acceptable, as well – say to a central location or to pick up a specialized vehicle. The main drawback noted was that disabled might have trouble with a five minute walk.

The fee structure we outlined: initiation fee, monthly fee, hourly fee, and mileage fee was viewed as reasonable with a few caveats. A few commented that, while the structure made sense, it would still have to be cheaper than owning one’s own car. One noted that an hourly fee would help insure people returned the car on time. A few commented that a fee structure with peak and off-peak rates might help the peaking problem.

Car access resulted in lots of comments. Several people wanted to make sure the key box was well lit. A few were very concerned about safety once the box was opened, before one got into the car. It was suggested that the keys should be in a store or office building location, in order to minimize the risk.

A couple in each group felt that there must be a way to actually have the car keys in your possession and not have to have access to them. One person in the first group suggested that electronics could solve the problem, allowing the dispatcher to preprogram the car for entry by the designated person for each time slot. Each member would have their own electronic key that would only work when they were scheduled to use the car. In the second group, while a less detailed description was offered, several participants thought some type of electronic key was the preferred solution to all the problems others identified.

Few were satisfied with the thought that they would only have access to economy and compact cars. Some commented that there should be a variety of colors and makes. One commented in each group that they would expect the cars to be new. Though only two would also like access to a mid-size or luxury car, 16 expressed a desire to have access to pick-ups and mini-vans in addition to cars.

Almost all liked the idea of access to alternative vehicles like electric cars and natural gas cars. This was often grounded in a sense that saving the environment is what car sharing is all about, so it should be part of the organization. Nonetheless, there were also comments that, given everyone’s lack of experience with electric cars and natural gas vehicles and the lack of these vehicles in the population, there might be problems using them.

We prepared a hypothetical car share club rate schedule for presentation to focus group participants. The rates purposefully included the most likely rates that could be used, in order to understand the groups perceptions of each rate.

The rates, although hypothetical, were based loosely upon information gathered from rates in car share organizations in Canada. In addition, the rates were checked in a simple break-even model to consider if revenues were approximately equal to expenses. The rate was also designed to cover all operating expenses of the car share: fuel, maintenance, insurance, parking, scheduling, depreciation, administration and management are included. Table 7 displays the rate schedule presented to the focus group participants.

We explained that the rates were hypothetical for a Portland car share club. The membership fee would be a deposit, to be returned without interest when a participant left the car share organization. The monthly fee would have to be paid in any month that a car share vehicle was used. Therefore, during vacations or periods when other transportation could be used exclusively there would be no monthly fee. The mileage and hourly charges accumulate during actual use of the car share vehicle.

We presented three travel scenarios using these rates. The scenarios included an annual cost of use (at 10,000 miles per year), a weekend trip to the beach, and a two-hour combined errand. We compared these to figures in "Your Cost to Drive," obtained from the Automobile Association of America. The all-inclusive cost to drive provided by AAA for a new, 1996 Ford Escort was $0.438 per mile. Table 8 displays these scenarios.

The car share costs discussed in the video were substantially different than those presented in Table 8. The focus group participants expressed disappointment over the more realistic numbers. They concurred that 44 cents per mile for annual usage of a new car made sense, a few commented that their own costs were lower, sometimes as much as 50% lower due to use of used cars and driving fewer miles per year.

Looking at the rate structure, participants concluded that car sharing did not work well for commuting or for some weekend trips. It also did not seem to make sense for some types of errands. Many of the participants did not like the hourly fee, feeling that it was too high and created a penalty for using the car when the distance was very short but lasted an hour or two, like going to the doctor. Some wanted to offset this with either a higher monthly or higher initiation fee. Others were also concerned about the mileage rate. Some of the comments about the rate structure are included in the following box.

Since the distance participants drove each year might affect their view on costs and value of car sharing, we asked how many miles per year they drove. Table 9 displays their responses.

Participant interest in the concept of a car sharing club became qualified as a result of looking at the costs. Group 1 dropped from eight enthusiastic potential participants to three, plus one "maybe" for their primary car and seven willing to consider car sharing for their second car. Group 2 dropped from eight interested potential participants to five who would still be interested at all. Two of whom would use it instead of their primary car and three who might use car sharing for their second car, if at all. In addition, in Group 1, three of those with two or more cars thought that they would definitely eliminate their second cars if car sharing worked.

We asked participants if any incentives might make the car sharing club more appealing. Fourteen thought having a bus pass would be a plus. Most thought having a special rate with a rental car company would be useful. Only a couple in each group thought an incentive from a bike shop would be useful.

Participants suggested other incentives that would appeal to them. Several wanted some sort of frequent user program or a way to recognize long time membership. Others mentioned dividends, if a co-op, or lower rates if the club is profitable. "Choices" came up in both groups as something the participants would find most appealing. Whether it was choices in the types of cars, or choices in the type of organizations, or choices in the plans one could participate in, choices would be more appealing than a single one-size-fits-all organization.

Though there was overall interest in incentives, it was not apparent that interest increased with the incentives. Rather, those who were interested became a little more interested and willing if the incentives were added to the package.

Some of the final comments participants made about the car sharing club idea speak to both their hopes and their concerns about car sharing.

The overall question in people’s minds is: "Can it really be less expensive than my own experience of owning and using a car." Cars offer many benefits, most of which cluster around the notion of convenience and comfort. These participants got fairly enthusiastic and happy talking about the benefits they get out of cars. Cars also have a set of negatives, mostly these concern financial costs and environmental effects. Clearly, as one of the participants so succinctly put it:

The value of convenience is the cost people are willing to pay to have a car. The focus groups found that people own cars – even if they do not drive them very often – just to have the convenience of being able to visit friends who live away from public transportation, to go sightseeing, to go on errands at the spur of the moment, and to get from their own door to their destination in the least amount of time. Thus, it would appear that people who have fewer of these needs for convenience, are more likely to be interested in car sharing.

To the extent that these participants are indicative of others who live near them, it appears that those who live downtown may be less attracted to car sharing. We hypothesize that the recent increase in downtown living opportunities have tended to be high-end residential projects. As a consequence, though the residents may not drive on a regular basis, those in the focus group definitely indicated that they could afford to own a car for the convenience of having it when they needed, whether or not it was parked in their building.

Similarly, while not definitive, the positive response for car sharing in Group 1 rather than Group 2 coincides with higher vehicle usage in Group 1. The interest in both groups was primarily in car sharing as a second car.

The focus groups also provide a glimpse at those attitudes that might be necessary for interest in car sharing. Two attitudes surfaced for those most interested in car sharing. One segment seemed to express a disdain for cars, a feeling that cars were a necessary evil, or perhaps so evil as to be something one should get rid of. Another segment seemed to reflect an environmentally-concerned lifestyle, often saying they lived in the Hawthorne district or discussing the concept of voluntary simplicity.

Two other segments seemed to surface, one was those who just love their car – owning it, driving it and using it. The other was a segment of people for whom car ownership feels like something they have finally achieved that they are not going to now give up.

The next two chapters discuss the market research survey. A survey was selected to provide results that could be generalized to the population of the entire study area. The indications of interest and concern that emerged in the focus groups were used to guide the development of the survey. Thus, we developed attitude questions to determine whether different segments of the population would be more or less interested in a car sharing club and we identified which service features should be explored with the survey sample.

In this chapter, we discuss our approach to the survey and the response. In the following chapter, we present the results.

We conducted a survey of licensed drivers in the study area. The purpose of the survey was to do the following:

• To estimate market potential,
• To determine response to different features of the car club, and
• To identify the characteristics of "very likely" joiners.

The survey included 50 questions plus a set of seven screening questions. Included in the 57 questions were 21 attitude questions, nine demographic questions, and nine questions about transportation behaviors. The remaining eighteen questions focused on car sharing. A copy of the survey instrument is provide in Appendix D.

Using the list of 36,750 licensed drivers over 25 in the study area, a random sample of 12,000 was drawn for matching with phone numbers. A total of 5,553 names could be matched with phone numbers. These 5,553 names were used by Market Decision Corporation (MDC). The telephone survey was implemented between April 28 and May 8, 1997. MDC made at least one call and three callbacks to each potential contact. A total of 385 surveys were completed, as displayed in Table 10.

We originally planned to call just the contacts identified on the list of drivers. During the pre-test we found that the specific driver was often not at home, though an adult often answered the phone. Given that the primary focus of the survey was geographical, we decided to screen the person who answered the phone rather than asking for the specific driver. Given this change, we were now able to screen for drivers 21 or over.

As can be noted, some of the sample was determined to be ineligible for the car sharing concept, based on our screening criteria. These were determined in two ways. First, we asked if the contact was 21 or over, .5% were not. Second, we asked if they had a current drivers license, 1.2% did not. In addition, other factors made a phone number ineligible due to disconnects, business lines, or indications the line was a fax or modem line.

We spoke with 266 drivers who were screened as eligible. One of our objectives was to screen out those drivers who had a very positive attitude towards personal car ownership. This attitude had surfaced in the focus groups as a likely limiting factor in drivers choosing to participate in a car sharing club: 29.3% of the eligible drivers screened out on a scale derived from four attitude questions.

Two other groups of eligible drivers failed to complete the survey, 11.5%. Those that failed to complete, generally began the survey but were unwilling to complete it due to time constraints.

The primary limiting factor in the survey response rate (and one that appears to be increasingly common for telephone surveys) is the large percentage of contacts who could not be reached. In this case, 45.5% of the base sample still had no answer after four phone calls. This led to a response rate of 8.4%.

The survey design was to obtain sufficient completions to allow for generalizations to the population as a whole, and to the populations of each neighborhood quadrant (Northwest, Southwest, Southeast, and Northeast). Given our most conservative assumptions regarding the proportion of responses, a sample of 385 was identified as that required to permit generalization to the total study area population, with 95% confidence plus or minus 5%. This means that we would be 95% confident that we were within 5% of the true population parameter.

For the four neighborhood quadrants, we attempted to complete 100 surveys. We were unable to achieve this in the Southwest quadrant, due to a smaller population base in this quadrant. However, we did obtain 70 completed surveys. Table 11 displays the distribution of the 385 completions by quadrant.

Given the differences in response by neighborhood quadrant and the fact that the population of licensed drivers over 21 in each neighborhood quadrant varies, we weighted responses to the survey by neighborhood quadrant population whenever providing responses for the entire study area. Responses reported for the neighborhood quadrants are not weighted.

Table 12 displays the characteristics of the survey respondents compared to 1990 Census data for adults 21 and over in the study area. As can be seen, the respondents differ greatly from the 1990 Census data in terms of educational attainment of household members, annual household income, and age. Although the census characteristics cannot be directly compared to the survey respondents’ characteristics, the apparent differences led to our careful analysis of the survey data to ensure that we drew conclusions that were, in fact, able to be generalized to the population of the entire study area.

We also asked survey respondents questions about the number of cars they had and how many miles they drive their primary and secondary cars each year. One of our concerns was to determine if a particular neighborhood quadrant in the city was more likely to benefit from a car sharing club. Tables 13 displays the percent of households owning different numbers of cars by neighborhood quadrant. We did find a statistically-significant difference between neighborhoods. Notably, Northwest and Southwest respondents have fewer cars than Southeast and Northeast respondents.

Table 14, however, shows that even though there are differences in the number of cars by neighborhood quadrant, there is no significant difference in amount respondents drive their primary car by neighborhood. We also found no significant difference in the amount respondents drive their secondary cars.