Car sharing: a minority interest or on the cusp of hitting the big time?

Can car sharing play a bigger part in meeting travel demand? Craig Barrack, the founder of car share firm Carbon Heroes, certainly thinks so. He tells Andrew Forster what’s needed to turn potential into reality

Andrew Forster

30 May 2014

Craig Barrack, founder of Carbon Heroes

Incentives help encourage membership of the Welsh scheme

You may expect Craig Barrack, as the founder of car share firm Carbon Heroes, to be blind to possible drawbacks of car sharing. But even he has reservations about letting a stranger into his car. “I would be really reticent to use a public car sharing scheme because it could just be Joe Schmoe in a cyber cafe, you don’t know anything about that person. The idea of opening up your car door to a stranger is really alien to us. Public car sharing is a bit like online hitch-hiking; I’ve never picked up a hitch-hiker, nor have I ever been a hitch-hiker because it strikes me as being quite a risky thing to do.”

Barrack’s concerns about personal safety particularly apply to public car sharing schemes that match strangers up for journeys, helping them cut the costs of travel. It’s less of a concern for the employer schemes typically set up to solve parking pressures at the workplace. But even with these it’s easy to think of reasons why employees may be reluctant to car share – different political views, senses of humour, choices of music, driving styles, smoking/non-smoking and so on.

Getting people to ‘take the plunge’ is the big challenge, says Barrack. “We’ve had numerous examples of people who’ve said, ‘Oh yeah, I didn’t like the idea of car sharing, but once you do it...’”

The name of Barrack’s company suggests people car share to ‘save the planet’ but most do so for less altruistic reasons, he says. “We don’t think many people use our system because they particularly care about their carbon footprint. We think people are using it because they are getting a parking privilege from their employer or they care about the fact that it costs them £75 to fill up.”

For now, Barrack says car sharing remains quite a minority activity. “Whenever I do corporate presentations I cite the diffusion of innovation curve – you know, pioneer, early adopters and this type of stuff. And car sharing is definitely at the pioneer, early adopter stage.”

But with a car share app about to go live, enhanced personal safety features in the pipeline, and hopes of a small helping hand from Government, Barrack believes the prospects for car-sharing are bright.

Taking on the big guys

Barrack started his career in software engineering and moved into mobile telecoms in 2001. It was while running a telecoms consultancy that a friend suggested they set-up a car sharing service for sports fans on matchdays. Barrack couldn’t see the business model for a sports service but his research convinced him there was a market for commuter car sharing.

“With sports events you’ll typically go with a mate, or with a partner, or your kids, so those vehicles have already got two, three or four people in them whereas driving to work, nine times out of ten it’s just a sole occupant. Commuting is the worst class of journey for single occupancy car trips.

“Also, if you went to a football club or a rugby club and said, ‘Look, we’ll do this car-sharing thing for all your fans,’ they might say: ‘Well fine but we don’t want to actually pay you for that.’ Whereas if you do it for an employer, it’s going to reduce demand for car parking and help their green credentials, and obviously they can pay you a fee for doing it.”

Carbon Heroes was launched in 2007. Seven years on, Barrack admits the Maidenhead-based venture has proved “massively tougher” than he expected. “I still don’t draw what you’d call a commercial salary out of the business. If we suddenly turned over an extra £40,000 that would mean I would probably get a slightly better salary and invest more in technology, so we’d still be on that knife edge of breaking even. If Carbon Heroes were to turn a profit in the next four or five years that would be quite surprising – we’ve got ambitious growth plans for that period, but we’ll be spending money.”

The UK market for organised car sharing is dominated by Norfolk-based Liftshare whose website boasts over 627,000 members. Barrack describes Liftshare as the “800lb gorilla within a tiny, tiny zoo”. The smaller creatures include Carbon Heroes, GoCarShare (which, among other things, has a reputation for car sharing to music festivals) and BlaBlaCar.

Until just a few months ago, Barrack could still count his clients on the digits of two hands. Some of them are nevertheless big household names, including mobile telecoms giant O2, DIY chain B&Q, and the Co-operative Group.

In the last few months the company, which has six staff, has won its first local authority/government contracts – taking over the Welsh Government and Buckinghamshire County Council schemes from Liftshare. These feature public schemes – the first Carbon Heroes has run – as well as schemes for the employees of both organisations.

Barrack knew taking on Liftshare would be a challenge. “It’s almost like the 1970s advertising campaign – ‘No one got sacked for buying IBM.’ There’s that kind of mentality [in organisations] to say, ‘Well, we currently use Liftshare, loads of people use Liftshare, we might not love it but it kind of does the job. If we go to Carbon Heroes it’s a bit of a risk.’”

He could see, however, aspects of Liftshare’s operation that he thought he could do better. Its security arrangements didn’t impress him. “Going back to 2007, the login pages for some of their clients, maybe even all of them, weren’t encrypted. They’ve resolved that in the meantime, I think they now encrypt all of their stuff.”

Personal safety was another issue; he was surprised that Liftshare members didn’t have to register their vehicle details in the system. Barrack’s “doomsday scenario” is two strangers agree to share a journey, which ends with an unsavoury incident. This, he says, is why Transport for London no longer offers a public car sharing scheme in the capital.

“With our system you have to register what your vehicle is. So, for example, I’d have to put in that it’s a red Volkswagen Touran and my numberplate. Then, if I agree to share a journey with you the system says, ‘By agreeing to take Andrew we’re going to tell him what you drive.’ You would get a message saying it’s a red Touran and this is the numberplate and of course that’s logged in our database.

“In our system it’s not impossible there would be some kind of unsavoury event but at least you would say, ‘Well, we’re pretty certain that this guy was driving a blue Mondeo registered ABC123 because that’s the vehicle he told the user he was going to pick them up in.’”

Selling the benefits

With unfortunate timing, Carbon Heroes launched just as Britain’s economy nosedived. That hampered efforts to raise capital and also dented car sharing prospects. A recession may be perfect for public car sharing schemes but it’s disastrous for employer schemes: workplace car parking pressures disappear as organisations cut staff and facilities management budgets are often in the frontline for cuts. These influences persist today.

“Lots of companies are obviously economising and car sharing is an absolute luxury product for lots of organisations,” says Barrack. “A lot of the time the facilities people will say, ‘Well actually I’ve been told to cut 30% of my budget.’ Therefore even if it’s a few thousand pounds for quite a big company it’s like, ‘Yeah, but I’ve got to save £50,000, I can’t suddenly magic up an extra £5k, £10k for you guys.’ Especially because it is quite often difficult to have that return on investment calculation – you know, if you get two people to car share to your office and otherwise they would have parked on the relief road and upset the local residents, what’s the value in that?”

Car sharing can offer tangible financial benefits to employers, he emphasises. “If you’ve got an overflow car park and you’re having to pay money to an NCP or a local authority for those spaces and you could get rid of 40 of them by having an active car share scheme that’s something that’s a real saving to quantify. One of our prospects was looking at buying a strip of land from a neighbouring company and tarmacking it over – it was going to cost about £600,000.

“My thumbnail qualification for a prospect is, when I turn up to their office, if I can see a staff car park where they’re double-parked and it’s chock-a-block I think great, this is a good prospect because car parking is a pain in the rear end for them.” In these circumstances a car sharing scheme can be marketed as a positive thing for staff. “It becomes an employee benefit to say: ‘If you drive to work individually you have to pay a fiver a day to park in the local car park but if you car share you can park for free.’”

Car parking isn’t the only reason why organisations may want a car sharing scheme. Barrack’s particularly excited about another recent contract win – workplace services provider PHS Group, based in Caerphilly, which wants to encourage car sharing by employees on business travel, such as to training events, thereby cutting travel expense payments.

In a slight diversification of its activities, Carbon Heroes is developing a car park management system for another client that could allow staff to book a parking space when they make a trip to their firm’s headquarters. Barrack says this also has potential to encourage car sharing and so reduce expenditure on staff travel.

“Imagine that we’re two employees coming down from one of the branches for some regional marketing meeting. What the system does is it adds a journey and [could] say: ‘But Andrew, Craig’s just booked a parking space and he’s coming down from town A too. Therefore, we’re not going to give you a parking space, but you need Craig’s details because you ought to come down in one car because that’s a 500-mile round trip.’ It may not be that draconian.”

Marketing an employer car share scheme is a two-stage process, he emphasises. “If you’re the employer and you sign up with Carbon Heroes my job isn’t finished; my job is to persuade your staff to adopt the scheme. If they know that when they turn up at your office, if they’re car sharers they’ll roll into a green space with a priority car parking banner next to it, then all of a sudden the incentive for you and me to get into one car is quite a clear one.”

Domain name blues

Migrating the recently-won Welsh Government and Buckinghamshire County Council contracts from Liftshare hasn’t been straightforward. Liftshare’s Welsh scheme had about 6,000 members but transferring their details into Carbon Heroes’ system would be too cumbersome, says Barrack. Consequently, he’s starting again from scratch (except for members of the employer scheme). “You could [obtain the details] if you were willing to click through 6,000 people, copy and paste their email addresses. But within those 6,000 people how many of them are actually active users is always quite debatable, so I wasn’t going to sit there for three days obtaining their details.”

Barrack’s main gripe with the migration of the Welsh scheme is that Liftshare owns the internet domain name CarshareWales.com. “If you go to Carsharewales.com today it will redirect you to Liftshare,” he explains. “They’ve gone from being paid by the Welsh Government to run a general public service, to just running it for free.”

He thinks this is fundamentally wrong. “It’s a really sub-optimal way to inspire loyalty from your clients to say ‘Oh yeah, if you want to relaunch with another supplier in three years’ time you’re going to have to choose a new domain name.’ That’s not a scrupulous way to do business. The domains should be the property of the client.”

Carbon Heroes has had to come up with a new brand, ShareCymru, and accompanying domain name. “We’ve made sure that the Welsh Government owns the domain because that’s a four-five year contract. At the end of it we hope they will renew with us but if they choose to use a different provider they can just redirect that internet domain to another company’s service and that would be fair enough.”

Domain names aren’t generally such a problem with employer schemes, he says, because they typically run off the employer’s intranet.

The future’s mobile

So what does the future hold for car sharing? Carplus, the organisation that promotes car clubs and car sharing, is hoping to persuade the DfT to boost the sector by funding some car club/car share demonstration cities.

The car share sector is also talking to Government about improving personal safety features. Barrack sees this as vital. “Where I think this market is going to go is there’s going to be much more importance on validation, safeguarding stuff. You will be able to have more confidence that this person’s going to turn up, that they’re going to have a road legal vehicle and a valid driving licence, and that they are who they say they are.”

One possibility is that car share firms would be granted access to the Driving and Vehicle Licensing Agency’s database, enabling scheme members to validate that they have a valid driving licence and their vehicle is taxed and insured.

“We think changes like that have to come in order for there to be enough confidence for car sharing to become a mass market service. From a personal security point of view we’ve moved a long way from the ‘It’s a bit like online hitch-hiking’.”

Barrack says members would probably have to pay for the validation service and so he thinks Carbon Heroes will make it optional. But members looking for a lift would be more likely to choose someone who has gone through the process, he believes.

Right now Barrack is particularly excited about this summer’s launch of Carbon Heroes’ mobile phone app, which will be available to members of any of the firm’s schemes. “I would imagine that in a couple of years’ time the vast majority of our interaction will be purely through mobiles [rather than websites].”

He believes the app will open up new business opportunities and has already spoken with a couple of train operators about the possibilities. Think, he says, about two people who car share to/from their local station as part of their commute. What happens if one day they have to travel back on different trains? An app provides the solution.

“Imagine you’re stood on the concourse at Paddington or Marylebone or wherever. Well, you’re not going to pull out your laptop and login to the station wifi and login to a website and say ‘Can someone please find me someone else who’s taking the 6.15 rather than the 5.45.’ If, however, you’ve got an app here whereby you can just say ‘I need to find someone who’s taking the 6.22 and is going to get off at Taplow, High Wycombe or Didcot or wherever’, and you’ve got someone else on the database who is taking the 6.22, you can put those people in contact via their mobiles rather than sending them an email.

“All of a sudden you’ve got a mobility solution.”

Car sharing will be discussed at the ‘Shared transport masterclass’ in Bath on 17 June.