"Whoever controls parking controls the market,” says Julian Espiritu of Abrams Carsharing Advisors.
This was Richard Ull’s trump card when he started Mint, an independent, for-profit car sharing operation in New York City. Ull also operates Car Park Systems, a network of 50 parking garages in four New York boroughs.
Ull said the idea to start a car sharing company “was on the brain” in October 2007. In January 2008, he started looking for outsourced services. Ull hired a freelance Web developer and went with a turnkey hardware and software system from Eileo S.A. Ull says that although Eileo tailored the system to Mint’s parameters, the rest was virtually plug and play.
Mint officially launched in October 2008.
Ull manages the 42-car fleet with a customer service staff of two to three, a marketing/sales person and a fleet manager. A call center managed by a third-party vendor handles issues after 6 p.m.
Ull says the biggest barrier to entry was not securing fleet financing, but obtaining insurance. “They [insurers] may understand car rental, but they don’t understand car sharing,” Ull says. “For a startup, you need a good business model that the underwriter will buy into.”
It was important to show the underwriter the controls on membership, such as a threshold of points on a driving license and expulsion for a DWI. Getting the right insurance cost structure was paramount. “They may insure you, but if you’re paying too much, the model falls apart.”
Mint must carry the state minimum for insurance. The company offers a standard damage waiver and supplemental liability ($1 million) for single reservations or an entire year. Without CDW, members are exposed to a $500 deductible.
Ull has had “accidents in which finding the members would have been impossible,” he says, though he has not yet been exposed to any nasty subrogation issues.
Ull uses an environmentally friendly car wash, GeoWash, which is also good at reporting damages that members don’t. A good relationship with a body shop is also essential, Ull says, especially in New York.
No Background in Fleet
Ull does not have a background in fleet management, though he knows car dealers in the New York/New Jersey area. His fleet needs are small; therefore, he takes cars out of dealer stock rather than fleet ordering them.
Ull leases the cars through a smaller, family-owned lessor, which offered lease terms that were better than the deals of some larger funders, he says. The leases are open end, with 18- to 24-month terms.
Mint has 42 cars spread over 16 locations, 14 in Manhattan and two in Brooklyn.
There are three fleet groupings: “economy,” with smart fortwo, Honda Fit, Toyota Yaris, Nissan Versa and Nissan Sentra models; “classic,” with the Toyota Tacoma, Honda Accord, Nissan Altima and Nissan Rogue models; and the Mercedes C300 is the “luxury” model.
Ull parks the cars in lots near subway stations. If a car has not been returned and a similar car is not in the lot, members can take the subway two stops and get a car in seven minutes. Or, Mint will put the renter in a car in the closest available lot and pay for the cab ride, “with an apology,” Ull says.
Ull says it is extremely rare to not be able to satisfy a reservation. His goal is to have cars every eight to 10 blocks throughout Manhattan.
Mint’s rates range from $9 to $13 an hour during the week, and $69 to $99 per day. On the weekend, cars rent from $11 to $17 an hour and $99 to $155 for the day, with the Mercedes taking the top rate.
Mint offers a Monday to Thursday, 8 a.m. to 5 p.m. special of $5 an hour for the economy fleet, which works well for businesses such as contractors and architects and moms on driving duty, Ull says.
“We were sure we’d sell out every weekend, especially April to September,” Ull says. “Keeping a low price point during the week worked to our advantage to keep utilization high. During the week, it’s gravy.”
Mint’s revenue per unit is $1,700 to $2,000 a month. Ull looks at adding fleet when utilization regularly goes higher than 30 percent. “Turnover is the key,” Ull says. “Three reservations for five hours a day is a wonderful thing.”
Ull made a splash with a “try us” rate of $2 an hour during business hours from January to June of this year. Mint waived the application fee for drivers signed up with another program.
The marketing budget is small and mostly guerilla, in the form of street marketing near subway stops and parks. Ull used his real estate contacts to leave brochures in buildings.
On the business-to-business end, Ull has focused on small businesses due to Mint’s fleet size. “We’re growing organically, as a community-based business,” he says.
It’s Up to You, New York, New York
How does Ull view the future of the market, and his chances in it?
“It’s a great idea, a green idea,” says Ull. “In an [urban] environment like this, with the cost of owning, parking and insuring a car, I haven’t seen anything that makes more sense.
“New York is the largest car sharing market on the planet. I’m definitely in the right place.”
Ull expects to break even or become profitable by the end of this year—not bad for a company that started last October. “I’m not waiting three years to make money at this,” he says.
“Everyone likes a local company run by locals, so we have that going for us,” Ull says. However, Ull is well aware of the difficulties in getting a car sharing operation off the ground as an independent company. Having the parking component already covered was Ull’s greatest advantage.
“If I wasn’t in a car parking business, I wouldn’t own a car sharing business right now,” he says.