In their frantic quest for profitability, car-sharing operators are faced with the need to adapt to changing user preferences. Today, one of the major challenges for these operators is to rethink their fleets to meet increasingly diversified demand. This quest for adaptation is reflected in a growing trend towards diversification in car-sharing fleets. And who better to talk to us about this than Poppy. Initially known for its car-sharing service, the Belgian company now offers a range of different modes of transport. Poppy’s CMO, Pierre de Schaetzen, talks exclusively to us about this winning multimodal combo. An exclusive interview on the future of multimodality, based on our seven-month investigation into the quest for profitability in the car-sharing market.
Why is diversifying a carsharing operator’s fleet an opportunity?
Today, we see that a large proportion of our users are not just car drivers, cyclists or scooter users. More and more people are coming to optimize their choice of vehicle, and therefore the services they use, depending on the trip or context. Each decision is made according to the criteria they have defined for themselves.
These may be criteria linked to vehicle availability, proximity, price, comfort or flexibility. This is increasingly true of Generation Z. A generation that has evolved in a connected world where they have instant access to everything they need. The notion of accessibility is now paramount for this young generation, in contrast to the ideals of their parents, who sought to own their own car at all costs.
A total freedom and flexibility that we are now trying to offer through Poppy. Our strategy is to offer the lifestyle that corresponds to this “very last-minute” generation, which doesn’t like to plan and doesn’t like commitments. If it’s raining, they can opt for a car, if it’s sunny, for a bike, and if they need to transport a piece of furniture, they can opt for a station wagon or a van.
As an indication, today Poppy has 2,200 cars, a good hundred vans and 2,500 or even 3,000 scooters in Brussels and Antwerp. We are currently testing 150 shared bikes in Brussels. A fleet of cars and vans, present in six cities and four airports in Belgium. This diversification enables us to cover a maximum number of use cases. Today, each new car we add to our fleet retains the utilization rate of the previous car. An opportunity to create demand!
What modes of transport should a carsharing operator choose?
That’s a very good question. I think it depends on the approach… At Poppy, we’re seeing a boom in vans, but booking volumes are very small. But because we have a user base that comes from our car offer, when they need a van, they turn first to our offer before going to the competitor. This means that our vans are always in use. Now, if we had started Poppy with a van offer, would we have faced the same problem? Unlike cars, we don’t need vans every week.
There’s also the question of strategy. Should we start with small city cars, or move straight on to larger models for longer journeys? At Poppy, we’ve come to realize that the middle ground is just right. We saw this with Autolib in Paris, for example, which launched with mini-cars. It presented itself as a solution for intramural travel. At Poppy, this has proved to be the case, and it’s one of the segments in which we’re making money. What’s more, we’re well aware of the politician’s desire to limit car use in the city as much as possible. A vision that runs counter to this desire to deploy a large number of small city cars in the city.
Today, for example, our fleet is mainly made up of city cars such as Audi A3s, Golfs, Polos, Toyota Yaris and Opel Corsa, which represent our “low-cost” offer aimed at our younger customers. There are also more upmarket cars, such as Audi A4s, Skoda Octavias, Audi Q3s and SUVs. This is a fleet category that is used more often today, for example, for vacations, weekends or weddings.
What are the main challenges facing a carsharing operator when it comes to becoming multimodal?
The main criterion that people look at when choosing a shared mobility service, or indeed when deciding whether or not to use this type of service, is vehicle accessibility. Accessibility depends on the density and distribution of the fleet. This comes back to the notion of reliability. When a user compares buying a car or using a car-sharing service, he or she will be asking about reliability, which is a crucial point in the field of mobility.
Unlike other consumer products, it’s unthinkable to be uncertain about finding a vehicle to get to work or take your children to school. Until now, fleet density and territorial coverage have been inadequate. Operators covered small areas with small fleets. This made carsharing a fairly niche product for users who, out of conviction or lack of budget, were inclined to travel far to find a car. This is one of the reasons why many operators have not succeeded in sustaining their activities.
What’s more, we’ve finally reached market maturity. It is estimated that between 2022 and 2023, the size of the car-sharing market in Belgium will have quintupled. Having competitors like MILES helps reassure users. When they choose to part with their personal car, they can be sure of having a range of options at their disposal. If Poppy were to go out of business, they could always count on the Miles service. And vice versa… If Poppy becomes a victim of his own success and all the vehicles are used up, he will always have a plan B.
The challenge is to have enough offers. The example of the bus is the most telling: if the bus only passes by my house three times a day, with variable timetables, it’s unthinkable to consider it as a viable solution for commuting. This consideration extends to all shared mobility offers, such as bicycles and scooters. The second criterion is price. Users will compare the price of all the options available to them between buying a vehicle and using a shared mobility service. The calculation is fairly straightforward for a car, but a little less so for a bike or scooter.
In the case of scooters, given their ever-decreasing purchase price, people who use them frequently are more inclined to buy. For cars, on the other hand, in an urban and suburban context, car-sharing is almost always the most economical alternative. As an indication, it is now estimated that for distances under 13,000 kilometers per year, it is cheaper to use a car-sharing service than to own your own car. This threshold obviously depends to some extent on individual standards in terms of car range.
Why choose your own multimodal fleet over other external mobility solutions?
In our multimodal approach, we would like to go even further by promoting intermodality between our various vehicles… A private micromobility operator of any kind will never be inclined to conclude a fare agreement on the route for our end user… And neither do we necessarily want to pay the full rate to the operator to reduce the cost of their service
What makes our approach interesting is that in our economic model, the main cost lies in the acquisition of vehicles, especially cars. But the use of the cars themselves is not very expensive in the end… Thus, if we can make our scooters self-financing thanks to their regular rental, it proves interesting for us.
However, we remain open to exploring partnerships with private micromobility operators if necessary, especially in a context where the mobility market is increasingly locked in by calls for tenders. For example, if we lost a tender in Brussels, we could consider working with private players such as Tier, Dott or Voi, who would have won the tender. However, this option would be economically less advantageous for us than if we did it with only our fleet.