Page 244 -

daimler’s car2go business model

Market introduction of car2go

concept internal extended ulm austin austin which
development pilot internal pilot public pilot internal pilot public pilot organizational
form?

Our fi nal example is still emerging as of this writing. Car2go is a new concept in mobility Daimler launched car2go in response to the accelerating global trend toward urbaniza-
created by German vehicle manufacturer Daimler. Car2go provides an example of a busi- tion, and saw the service as an intriguing complement to its core business. As a pure
ness model innovation that complements the parent company’s core model of manu- service model, car2go naturally has completely different dynamics compared to Daim-
facturing, selling, and fi nancing vehicles ranging from luxury cars to trucks and buses. ler’s traditional business, and revenues will likely remain comparatively small for some
Daimler’s core business generates annual revenue exceeding U.S. $136 billion years. But Daimler clearly has high hopes for car2go over the long term.
through sales of more than two million vehicles. Car2go, on the other hand, is a In the pilot phase, launched in October of 2008, 50 fortwo cars were made avail-
startup business offering city dwellers mobility on demand using a citywide fl eet able to some 500 employees of the Daimler Research Center in Ulm. These 500,
of smart cars (smart is Daimler’s smallest and lowest-priced vehicle brand). The plus 200 family members, participated as initial customers. The aim was to test the
238
service is currently being tested in the German city of Ulm, one of Daimler’s key technical systems, gather data on user acceptance and behavior, and give the service
operational bases. The business model was developed by Daimler’s Business Innovation an overall “road test.” In February 2009, the pilot was extended to include employees
Department, which is tasked with developing new business ideas and supporting their of Mercedes-Benz sales and service outlets and other Daimler subsidiaries, with the
implementation. number of vehicles increased to 100. At the end of March, a public test was initiated
Here’s how car2go works: a fl eet of smart “fortwo” two-person vehicles is made with 200 vehicles and car2go was made available to all 120,000 of Ulm’s residents
available throughout the city, serving as a vehicle pool accessible by customers at any and visitors.
time. Following a one-time registration process, customers can rent fortwo cars on the At the same time, Daimler announced a U.S. pilot in Austin, Texas, a city with
spot (or reserve them in advance) then use them for as long as they like. Once a trip is 750,000 residents. As in the fi rst phase of the German test, car2go will begin with a
completed, the driver simply parks the car somewhere within the city limits. limited user group, such as city employees, then be opened to the public. These pilots
Rentals cost the equivalent $0.27 per minute, all-inclusive, or $14.15 per hour with can be seen as prototypes of a business model (see p. 160). Now, car2go’s business
a maximum of $70 per day. Customers pay monthly. The concept resembles popular model prototype is being fi xed into organizational form.
car-sharing companies such as Zipcar in North America and the U.K. Distinctive char- As of this writing, Daimler had not yet decided whether to internalize car2go or spin
acteristics of car2go include freedom from the obligation to use an assigned parking it off as a separate company. Daimler chose to start with business model design, then
place, on-the-spot rental for as long as one likes, and a simple pricing structure. test the concept in the fi eld, and defer decisions regarding organizational structure until
it could assess car2go’s relationship to its long-established core business.

!"#$%&'(%)*+(%,,---.5: /012013---2482-67