Road fix: RACV embraces new economy, offers members car-sharing platform
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Preparing for a new future of mobility: RACV policy head Phil Turnbull, RACV member Neil Newbegin and Chris Noone, CEO of DriveMyCar. Jesse Marlow
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by Michael Bleby
Motoring organisation RACV, which has taken money from car owners for 114 years, has started a car-sharing service to let members make money for the first time by leasing out their under-used vehicles.
The RACV, which in April took a 5 per cent stake in ASX-listed Collaborate, owner of the Drive My Car car-sharing platform, currently has 150 cars – out of an estimated 2.2-million owned by its members – signed up for the scheme. But just like traditional car makers, the organisation that seven years ago started a bike-sharing scheme is having to widen its range of services to adapt to changing living and mobility needs.
There's scope for more efficient use of private vehicles – RACV members use their cars for just 4 per cent of the time, on average. The organisation also knows that its 2.1-million members are also changing like the rest of the population. Between 2011 and 2016, the proportion of households with one or more cars living in inner-city Melbourne fell, while those without a private car jumped from 43 per cent to 49 per cent, census figures show. In regional Victoria, it was almost the opposite picture – the proportion of households with two, three and four cars increased.
"It's very different to our traditional businesses," said Phil Turnbull, the RACV executive general manager of motoring and mobility.
"We realised many years ago that motoring will be very, very different in decades to come with autonomous vehicles and that we had to reposition ourselves into areas that were non-traditional but that our members would ultimately need more help on. RACV DriveMyCar is very much around extending our reach into all the sorts of services that our members will need that don't follow traditional models."
Increasing specialisation
The deal shows the increasing specialisation of car-sharing platforms, and especially capital-light services – such as Car Next Door – which are more likely to succeed in less dense areas. But RACV DriveMyCar, which Mr Turnbull said caters more to people living further out, differs from Car Next Door by focusing on longer-term leases starting from a week.
"My shortest least has been for about one week – they were people going around interstate or around Victoria," said Neil Newbegin, who signed his 2012 SV6 Holden Commodore up for the service last year.
"I had two chaps from Canada who wanted to rent it for three weeks. The longest time has been seven weeks. That was an international student. I had no idea where he went."
Mr Newbegin, who lives in Bundoora, in Melbourne's northern suburbs, has another car, a 2015 Ford Falcon, which he intends to sign up for the service as well, as the $25 he says he gets from the $40 daily rental fee of his cars is a "pretty healthy" return. So far, everyone who has rented his car has brought it back unscratched. More viable
"It's always come back as I left it," he said. "Everyone's taken very good care of it."
Collaborate chief executive Chris Noone said nearly three-quarters of DriveMyCar vehicles in Sydney, where the service is better known, are rented out between 21km and 50km from the CBD, proving that there is a demand for cost-effective car sharing outside of the city.
Longer-term rental makes the business more viable in more remote areas as the cost of acquisition is lower and transaction costs are lower per usage.
The average rental period is 36 days.
And if it breaks down?
"We cover it," Mr Turnbull said. "If anyone drives a RACV DriveMyCar car, then we will rescue them and it will not appear on anyone's membership."
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