On November 10th, after Getaround and City CarShare announced a merger of sorts, City CarShare members trying to reserve cars found a whole new car-sharing experience waiting for them. City CarShare’s fleet had been replaced by privately-owned cars that could only be reserved by permitting Getaround access to their Facebook accounts and downloading Getaround’s app onto their smartphone to gain access to the cars.
City Carshare members, caught off-guard by the change and concerned that City Carshare’s stated mission of reducing auto dependence was being jettisoned, complained.
“I moved to San Francisco knowing it was a dense, bike-rich, transit-rich city,” said David Gartner, who has lived in the Mission for 25 years. Gartner joined City Carshare shortly after its founding in 2001 because of its mission-driven organization. “San Francisco is not getting any bigger. It’s 7 by 7. We need as few cars on the street as possible,” he said.
Another Mission resident, who asked to remain anonymous, was livid at the changes in the new registration process. “I can’t access my account without signing in through Facebook, which I DO NOT want to link with my account info and credit card,” she said.
It wasn’t until I tried to reserve a car for a Thanksgiving day jaunt to Napa, that the changes I’d barely noticed started mattering: the cars I’d driven many times had disappeared (they would later re-appear) along with my account information and the City CarShare website. Some information made the transition, namely my credit card account. (Getaround has vigorously denied allegations that credit card information was transferred between companies without members’ consent.)
Instead of reserving the car I normally use, a lime-green Kia that used to be parked across from Heath Ceramics on the corner of 19th and Florida, I was required to rent a car, whimsically named Loretta, from a man named Eric, one of Getaround’s owner-operators. In one swoop, City Carshare’s 20,000 members were turned into something more like subletters and pulled into the gig economy, which is the business model Getaround depends on: people making money from their cars.
Car sharing isn’t the only model Getaround uses. Lease-sharing is another. Getaround currently has a partnership with the Mercedes Benz dealership on 8th and Brannan. Prospective Getarounders looking for help making their monthly lease payments can lease a Mercedes Smart Car GLA or CLA and Getaround will gift them a $500.00 gift certificate. Brandon, a staff member of Getaround, said that the Smart Car Mercedes Benz “was expensive, but it’s worth it. Making an income from it is pretty easy.”
Getaround also has a new partnership with Toyota. Starting in January 2017, people who have leased new “premium” cars from Toyota, can make payments on their cars directly from their Getaround profits. Last year, Getaround partnered with the local Audi Dealership to offer an exclusive discount on an Audi.
Inducements to purchase a new car comes as another shock to long-time City Carshare members. “It’s not car-sharing. It’s renting,” said Gartner. “Sharing is using the resources you have wisely.” He pointed out that under Getaround’s profit-driven mission, more cars are better. “Anyone who’s ever tried to bike in this city know we don’t need more cars.”
Six months ago, City CarShare had more than 200 vehicles in San Francisco. The Mission District was particularly well stocked with 54 different cars in 21 locations.
“The Mission has always been one of Getaround’s busiest and most popular neighborhoods in San Francisco,” said Jessica Scorpio, a Getaround founder.
The changes at City CarShare started in 2015, when Carma, a start-up that linked drivers with passengers, purchased it. Lawrence Mulligan, the CEO of Carma, took over management of City Carshare to turn the faltering non-profit around. Carma invested time and money in City CarShare, he said, but it was too little, too late. In mid-October, City CarShare/Carma met with staff at the SFMTA and told them that City CarShare, which was selling some of its fleet to make ends meet, was “weeks” away from bankruptcy.
Sources differ on the cause. City CarShare was no longer the only car-sharing business in town. One Getaround staffer blamed Lyft and Uber. “The market’s saturated,” he said. “Lyft and Uber have 45,000 drivers on the road.” (City Treasurer Jose Cisneros put the number of Uber and Lyft drivers at more than 37,000 in April of this year.)
Mulligan doesn’t agree.
“I don’t think they have an impact on the car-sharing model.”
He pointed out that the majority of trips booked with City CarShare were multi-hour reservations. “Only 2 to 3 percent of all City CarShare reservations were for small trips.”
The real reason, Mulligan said, was a problem common to all car-sharing ventures: rampant theft. “People would sign up with a drivers license and credit card and make a reservation,” Mulligan told me, “and then the car would just vanish.” About twenty cars disappeared every month, he said, with many recovered in various states of disrepair.
“We had a $5,000 deductible to cover on each car that was stolen,” said Mulligan.
Whatever the reason, the quickly deteriorating financial situation demanded fast action.
“When we hit the doomsday scenario, there were lots of conversations about how we were going to preserve the original mission of City CarShare,” Mulligan recalled. “We decided that Getaround was the best choice. We decided to work within the community,” he said, referring to the owners of the 494,103 registered vehicles in San Francisco. “Other car sharing companies purchase cars and then just dump them in the city,” Mulligan continued. “But the original mission of City CarShare was vehicle eradication.”
That may be, but it is unclear if that is still true.
Some vehicles were eradicated, namely the fleet of wheelchair-accessible vans, purchased by City CarShare in 2012 with $254,674 in federal funding and made available to City CarShare members under its Access Mobile program. Getaround is now considering two options: donating the vans to an “appropriate organization” or hosting them on the Getaround platform.
“My hope is that they can figure this out sooner rather than later,” said Arfaraz Khambatta, interim director at the Mayor’s Office on Disability, noting that it isn’t a question of if, but when: Title III of the Americans With Disabilities Act mandates that private companies makes goods and services accessible to all potential customers.
The assets that Getaround acquired included City CarShare’s on- and off-street parking permits.
“Month-to-month permits were transferred between City Carshare and Getaround with the SFMTA’s permission,” said Andy Thornley, staff member of the SFMTA parking team. Both for- and non-profit companies that are classified as car-sharing ventures by the city are given discounted monthly rates in SFMTA-managed garages, as well as access to the city’s on-street parking pods, a pilot program which debuted in 2014. Getaround has 49 on-street parking pods throughout San Francisco; 18 of them are located in the Mission.
Getaround’s largest acquisition was City Carshare’s membership base, which in 2014 brought in $6,973,398 in revenue from program usage, membership fees and deposits. Some disgruntled members have pointed out that since Getaround doesn’t charge a membership, the company should refund the $300 deposit many members paid to join City CarShare. Those refunds could cost Getaround about $600,000. After receiving several emails urging her to activate her Getaround membership, one member contacted City Carshare/Carma directly and asked for a refund of her deposit. She received an email from Mulligan informing her that the check had been cut. The check arrived three days later.
City CarShare, which is still listed as a non-profit with the state of California, will continue to own its fleet of hybrid vehicles, which have been retrofitted with Getaround software. The hybrid vehicles are now currently listed “and available for rent,” according to Scorpio.
Meanwhile, City CarShare’s staff—listed as 30 employees in 2014 — was not brought onboard at Getaround in the acquisition, Scorpio said. Getaround’s public relations firm issued this statement when asked about the retention of City CarShare/Carma staff: “The acquisition did not include any of Carma’s employees, who was previously operating the City CarShare franchise.
Data collected by the SFMTA shows that car-sharing slows the retail market for new cars. Cars owned by car-sharing businesses were used about three times a day with an average of nineteen—and frequently closer to forty— unique users a month. Moreover, the same data, which was self-reported, shows that San Franciscans who joined car-sharing companies either got rid of their car, or just didn’t buy one.
It is unclear if the Getaround model will discourage car ownership. Gartner, for one, is skeptical, especially given Getaround’s emphasis on leasing new cars.
“When you go from being mission-driven to profit driven, you’re trying to get as many cars on-boarded as possible. That’s how they’re making their money.”
So far, “thousands” of City CarShare’s members have activated their Getaround membership, according to Scorpio. Gartner, who canceled his membership, is considering other options.
“City Carshare was trying to get as many members on board as they could. And members weren’t buying new cars,” Gartner told me. “We were sharing them, and it was fantastic.”