To get a sense of where Kevin McLaughlin’s sympathies lie, one need look no further than the magazine selection in his Toronto company’s lobby: Green Living, Vegetarian Times, Momentum (“for self-propelled people”) and Viva, a women’s health title.
Yup, the president of AutoShare, one of the pioneers of car sharing in North America, is as green as Kermit the Frog. He ventured into the industry with a mission to reduce car pollution, promote environmental consciousness and provide low-cost mobility to the masses.
In McLaughlin’s 12 years with AutoShare, however, the business has thrown him several curves. To wit: “We thought it’d be great for low-income people and immigrants, but they haven’t taken it up,” says McLaughlin, a slim, bespectacled man with a toothy grin and earnest manner. “Thirty dollars for four hours is still a luxury for them.”
The eco-pitch also didn’t stick. “It took us years to figure out that the green part is not the reason people were joining. People were joining because car sharing was convenient and saved them money.”
Most unpleasant of all, he’s found the car-sharing industry’s communitarian ethos melting away in the face of aggressive, well-funded and shrewd entrants — most notably Zipcar Inc., a Boston-area company that now controls three-quarters of North American market share.
While co-ops remain a major force in car sharing, both Zipcar and AutoShare look to profit from this still new concept. In essence, car sharing is short-term car rental — for as little as 30 minutes — aimed at urbanites who generally get around on transit or under their own locomotion, but occasionally need a vehicle for a meeting or a trip to Ikea.
Once they’ve paid a small membership fee, customers can book a car online or over the phone, with gas, insurance and roadside assistance included. It’s a fully self-serve transaction: Walk to one of the parking “pods” dotted around downtown, unlock your car with a smart card or a key from a lockbox, and off you go.
The model has proven appealing: Seven years ago, AutoShare had about 1,000 members. Today, some 10,000 Torontonians use its roughly 220 vehicles. That dramatic growth, mirrored by other operators’ experiences in major cities, is expected to continue. Research firm Frost & Sullivan projects that revenues of North American car-sharing operations will soar from $253 million (U.S.) in 2009 to $3.3 billion (U.S.) in 2016, and membership will grow tenfold as high gas prices, hefty vehicle ownership and insurance costs, parking hassles, a sluggish economy and guilt about fouling the atmosphere spur households to ditch their cars — or at least their second cars.
But along with growth, the industry is about to experience a dramatic realignment. Car-rental agencies and auto manufacturers are ramping up their incursions into car sharing, and new entrants are experimenting with more efficient business models. To prepare for the coming fight, Zipcar has announced its plan to go public. McLaughlin and other trailblazers have conflicted feelings about their larger rival: They acknowledge it’s greatly raised awareness of car sharing, but view it as an unwelcome interloper into the markets they developed. Beneath the resentment lies a fear that, as often happens, a rapid industry evolution may sweep away the pioneers. AutoShare could be among the casualties. But, then, so could Zipcar.
Kevin McLaughlin — a former aspiring environmental reporter and director of a nature non-profit, a man who volunteers at bird rescues and only briefly owned a car — is a distant relative of auto-industry pioneer Sam McLaughlin, whose McLaughlin Motor Car Co. was subsumed into General Motors Canada.
It’s a nice irony, but the 43-year-old entrepreneur is no hippie: He graduated from Queen’s University in business, hoping to become a real estate tycoon — until he took a trip to Asia and had an epiphany when he saw plastic bottles despoiling an idyllic island. He co-founded the non-profit group Evergreen in Toronto to foster urban green spaces, and then moved to Vancouver to open a branch there. But by the mid-1990s, he was tired of “begging for money.”
McLaughlin read about car-sharing ventures in Europe, where pilot projects date back to the 1960s. Inspired, in 1997 he helped found the non-profit Co-operative Auto Network in Vancouver, an organization that has since expanded to serve nearby communities. Seeing an unexplored business opportunity, he returned to Toronto and partnered with Liz Reynolds, a former co-op housing advocate, to launch AutoShare. They based it on the example of for-profit Communauto in Quebec, the first car-sharing operation in North America.