Car-sharing appears to be taking off in Toronto, say two firms competing for drivers in this growing business that has been touted as good for the environment and traffic congestion.
Since May, established local operator AutoShare has been facing new competition from slick U.S.-based Zipcar, which also operates in 11 U.S. cities. Both say their businesses in Toronto are growing rapidly.
"Toronto seems to be off the charts relative to anything we've seen before," Zipcar chief executive Scott Griffith said in an interview, adding that he sees a future in which "hundreds of thousands" of Torontonians will use car-sharing services.
"I think Torontonians tend to think about transportation more like Europeans, than folks in the States," he said. "They tend to be more biased toward public transit and transportation alternatives such as car-sharing."
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Since Zipcar arrived in Toronto, Mr. Griffith said, it has signed up 1,100 members and now has 100 cars in 45 locations across the city. That's faster growth, he said, than the company has experienced in any other city, including San Francisco, New York and Boston.
(By comparison, when the company launched in San Francisco, it had just 700 members by the end of the third month.)
Zipcar's growth in Toronto still leaves it well behind AutoShare, founded by Torontonians in the late 1990s. President Kevin McLaughlin said it now has more than 3,000 members and 125 cars in more than 75 locations, mainly downtown and along the subway system.
Both firms charge some sort of membership fee up front, and then allow users to reserve cars scattered across the city, for which they are charged by the hour. Both say the services allow people, especially those who live downtown, to avoid the expense of owning a car.
Mr. McLaughlin said AutoShare is also benefiting from Zipcar's ambitious marketing campaign here.
His company is on track to experience as much as 100-per-cent growth this year, he said, much higher than the 40- to 60-per-cent annual growth of past years.
He was critical, however, of what he said is Zipcar's practice of paying private parking lot operators hundreds of dollars over the going rate to secure dedicated spots in key locations, a move that he said is driving up costs for his firm.
Zipcar has one key advantage over its competitor: It allows renters to be as young as 21. (AutoShare's insurance rules have meant that its customers have to be 25, although Mr. McLaughlin said the company is looking to lower that age to 23 soon with a new insurance deal.)
The age difference allows Zipcar, Mr. Griffith said, to target university students, a natural market for car-sharing.
The company says it also has a new exclusive deal with the University of Toronto to park its cars on campus and market discounted rates to students and staff.
Mr. Griffith said Zipcar typically invests $3-million to $4-million in a new market, with an eye to breaking even within 18 months.
Zipcar, based in Cambridge, Mass., says it has 70,000 members across North America, 20,000 of them in Boston.
