AutoShare fights to be king of the road

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In the early days of AutoShare, staff at the Toronto car-sharing service would encounter double bookings because of a peculiar technical error. Drivers made reservations in pencil on sheets of paper, and sometimes the pencil lead wore off as staff faxed around the booking sheets.

This is not an issue in 2013.

"Every time we could take a leap in technology, it allowed us to do things that much better and that much faster," says Kevin McLaughlin, president of AutoShare-Car Sharing Network Inc.

As Canada's biggest city has grown more congested, the technology in peoples' homes and pockets has made it easier than ever to ditch personal vehicles for services that let them rent cars for short spurts. Today, AutoShare has 12,500 members, but pencils aren't a problem; 60 per cent of its reservations are made online, 25 per cent on mobile devices, with the remainder in-car and by phone.

And while it faces more international competition than it did at its inception in 1998 – Zipcar and car2go vehicles now roam Toronto's streets – AutoShare has grown with the industry and has made a name for itself as a lean and local alternative dedicated to serving its hometown.

The company does this by focusing on service, price and number of available cars per member, 47-year-old Mr. McLaughlin says. While AutoShare has 300 cars, for instance, car2go has 375 for twice as many members in Toronto. (World-leading Zipcar has 440 cars in Toronto, but won't disclose its membership size.)

"It's possible to operate a company like the proverbial gym membership, where they pile people in because they know people are going to quit, then on any particular day it can be overcrowded," he says. Instead, "We've really focused on trying to find the right balance between vehicles and members."

The field wasn't quite so crowded when car sharing began in North America, starting with the Communauto co-op in Montreal in 1994. This inspired Mr. McLaughlin, who three years later co-founded the world's first English-speaking car-sharing organization – now called Modo – in Vancouver.

A year later, in 1998, he moved to Toronto to take advantage of its untapped market, starting for-profit AutoShare with three cars and 16 members, who each paid a $500 insurance-and-membership deposit. (Today, membership fees are $29; AutoShare has gone to great lengths to negotiate down insurance and other costs.)

First aimed at the city's lower-income and immigrant population, AutoShare instead got a foothold with middle-class Torontonians who joined for the convenience and savings of ditching a personal vehicle. The company was also first focused on car sharing's environmental impact; in the end, though, the company's growth was instead shaped by its shifting environment.

Digital advances – reservations came first, then payments and signups, and eventually mobile iterations – made car sharing much more accessible to the masses. As Toronto's streets thickened with tens of thousands of more people, too, ditching a costly personal car began to make sense when you could grab one around the corner when you needed it.

But it also meant global competitors entered the ring, making life tougher for Mr. McLaughlin's homespun business. After Mr. McLaughlin turned down a potential partnership with Zipcar, he says, the global leader came to Toronto in 2006 and brought nearly 150 cars, forcing AutoShare to spread itself thin with expenditures. The company built its own fleet to 140 cars from 80 in response that year, and found itself losing ground as Zipcar snapped up some of its parking spaces by offering landlords more money. (Zipcar was then independent, but is now owned by Avis Budget Group Inc.)

In 2012, Daimler AG's car2go joined the fray with its blue-and-white fleet of Smart Fortwo cars that can be picked up and dropped off at different locations, as opposed to AutoShare and Zipcar's designated parking spots. While it sounds like a similar car-sharing model, Mr. McLaughlin calls the "awesome" one-way service categorically different – "much more like a self-driving taxi."

While the entry of car2go had a "big impact" on AutoShare in its first year, Mr. McLaughlin says the company did $6-million in sales last year and remains profitable, with record sales the past few months. "We've had a really great year," he says.

Mr. McLaughlin foresees more great years. He just trademarked the phrase, "The car of the future will be shared." Car ownership, he says, will matter less as more "sophisticated" options are developed.

"The definition between public transit and private car ownership is going to get a lot more blurred," he says. And he intends to take AutoShare along for the ride. "Car sharing – the idea of renting a car for a period of time and going places – is going to be an important part of that."

The ease of online and mobile registration and bookings have already made Torontonians take car sharing more seriously, with more than 1,100 cars available, versus just three in 1998.

Without the shift in technology, "we wouldn't even be talking" about car sharing, says Martin Collier, director of Healthy Transport Consulting in Guelph, Ont.

More and more international competitors are entering the car-sharing market, from vehicle manufacturers to rental agencies, but local players such as Autoshare have plenty of opportunity to stay ahead, says Martyn Briggs, a transportation researcher with Frost & Sullivan in London. Single-city companies like AutoShare, he says, tend to have operational efficiencies, local knowledge and local contacts that can keep them ahead of the game.

"Another company or several of them coming to town to showcase car sharing and promote the concept could be beneficial, especially when the industry is still in relative infancy," Mr. Briggs says.

One way to stand out from the competition, Mr. Collier says, would be to bundle AutoShare keycards with other transportation memberships, like for transit or bike sharing, into a single card to encourage multimodal transit use.

Mr. McLaughlin says the company is already prepared to offer that kind of service, using card-reader technology that already recognizes "Presto" cards that are being added to transit services across the Greater Toronto Area by Metrolinx.

If AutoShare begins to offer service through these cards, Mr. Collier says that should encourage more sustainability-minded people to join. "If you have a card that can give you seamless access to each of those modes, it's just so much easier," he says.

The benefit could be immense for everyone. Wider adoption of car sharing could convince 5 to 10 per cent of GTA residents to ditch at least one car, Mr. Collier says, which in turn would reduce congestion by 25 or 30 per cent. "Reducing traffic has a huge spillover effect."