But the legal framework, especially in Canada, is lagging market innovation. McLaughlin points out that the same Ontario bill that made it illegal to send text messages while driving also finally lifted the legal cloud hanging over carpooling. But some methods for sharing rides — such as airport shuttle buses — remain illegal in Toronto. And don’t get McLaughlin started on the subject of parking. “We’re building condos with parking for the car culture from the 1950s,” he says with a shake of his head. Toronto, however, recently approved the first condominium in the city that proposes to eliminate parking except for a few spots for shared cars. (City regulations set out minimum ratios of units to parking spots, yet many developers end up with unsold spaces.)
While environmental consciousness has taken a back seat to convenience and savings in car sharing’s promotion, the green credo remains strong. Car-shares mainly use small, fuel-efficient cars, and are expected to lead the transition to electric vehicles, with one in five new shared cars being electric by 2016 in Frost & Sullivan’s forecast.
Still, as the industry motors toward mainstream success, it faces a paradox. Most car-share operations cite research showing that vehicle sharing reduces driving — though the numbers vary wildly, each shared car is being credited with replacing anywhere from six to 30 private cars. Yet if shared cars become as ubiquitous and convenient as AutoShare envisions — “ a shared vehicle within a five-minute walk of anywhere in the city; at every [subway] station; and at the end of your street” — would we really drive less? We’d need fewer cars, but lots of people without vehicle access today would be able to take to the road.
Tensions, meanwhile, are emerging as an industry that began as a community effort adjusts to an increasingly profit-driven marketplace. McLaughlin is one of the founders of an international association that is closed to anyone “who might steal our ideas and use them against us,” he says, but there’s debate whether it should welcome the likes of Zipcar and Hertz.
And there is McLaughlin’s own conflicted situation. He says that the non-profits are wary of the for-profit operators selling out to those enemies, but adds, “Everyone’s got a price.” Even if you’re as crunchy as granola, he argues that it may be sensible to use sale proceeds to pursue your goals more effectively.
At the same time, he refuses to see Zipcar as simply a more successful, better-funded and arguably better-run version of AutoShare. Zipcar’s service happens to bring green benefits, says McLaughlin, but he insists it’s an organization that “could just as easily be selling McDonald’s hamburgers.” Yet, like AutoShare, Zipcar was the brainchild of green acolytes. Its founder, Robin Chase, remains a fervent advocate of car reduction who now guides one of the peer-to-peer start-ups, GoLoco.
McLaughlin seems saddened by the shift to a harsher market climate. “When I started in this business, it was a movement,” he says wistfully. “Initially, everyone helped everyone.”
It’s a fundamental dilemma at the heart of green business — wanting to do good but also wanting to do well. The environmentalist in McLaughlin may feel virtue is on his side, but the entrepreneur in him can’t hide a touch of envy, even respect, for Zipcar’s success. He points out that AutoShare now generates annual revenue of $5 million and has been in the black for the past four years. Asked what’s more important to him, that the company be profitable or socially constructive, he laughs: “The beauty is that I don’t have to choose.”
But he doesn’t take the question lightly. “Until I pay off all my debts, I need for this to be profitable,” he says. “For me, what’s important is to be sustainable.”
For a green businessman, that’s a well-chosen word.
This story first appeared in the September, 2010 issue of Your Business magazine.