On the eve of Zipcar's IPO, with profitability riding on driving down the cost of their fleet of designed to be owned cars, it's time to ask whether products should be designed to be shared.
Zipcar has shown that running a car-sharing business with traditional cars isn’t cheap. They're the market leader with over 500,000 car sharing members, most of whom express zealous enthusiasm toward the Zipcar brand and experience. They've made car sharing aspirational and fun. With $186 million in revenue last year and membership booming, it’s hard to imagine they wouldn’t also be profitable.
But, in fact, they've never turned a profit. And they're over $65 million in debt. When you look closer at the cost of providing the Zipcar experience, their debt makes more sense. The better part of its 8,000-car fleet is leased, and their high cost of operation is due mainly to the cost of the cars. Further, these expensive and high-maintenance vehicles are being turned over every two to three years.
Zipcar is expected to go public in a $75 million initial offering sometime this week. According to its regulatory filing, Zipcar will use the funding to help with general expenses and pay off debt. However, the company cautioned that they expect a loss in 2011 and couldn’t predict when they would begin to turn a profit.
Looking at Zipcar’s cost structure, it’s obvious that future profitability hinges on the company's ability to source cars and maintain a fleet at a lower cost. The company established Zipcar Vehicle Financing LLC last Spring to increase the number of owned vs. leased vehicles, which should help drive down cost. And though this isn't in their plan, the answer to lower costs may be to source cars that are actually designed for sharing rather than for the private ownership model where carmakers' profits depend on selling as many expensive and disposable cars as possible.
Zipcar's predicament suggests that designing products for sharing may be key to making certain sharing systems viable. When developing products to be shared, one must consider different design principles than the ownership model of consumption such as low cost, standardization, reliability, modular components, durability, and absence of non-essentials. But let's not go overboard – the best outcomes will likely come from thinking of the product and the product service system holistically.
Rachel Botsman, author of What’s Mine is Yours: The Rise of Collaborative Consumption, agrees: "It is not just the products per se that require sharp design thinking to make them smart, sociable, and shareable, but the service system around the product."
That being said, it’s worth exploring products that were designed specifically to be shared or that help people share products. Here are some of my favorite examples of working products and prototypes:
1. BMW DriveNow – Munich, Germany
DriveNow Driver’s License Membership Key. Photo Credit: BMW.
Competition in the car-sharing business is increasing — from the car rental, peer-to-peer, and manufacturing sectors. BMW just came to the table by launching 300 of its cars into its DriveNow service in Munich. These premium vehicles do not depend on fixed drop-off and pick-up locations, and the system allows users to convert their driver’s licenses into membership keys, two shareable-friendly features that allow the vehicles to work well in a human network where customers can easily connect with the product.
2. EDAG Light Car Sharing Concept – Fulda, Germany
EDAG Light Car Sharing Concept. Photo Credit: Autoblog, EDAG.
Electric vehicles are on the road maps of car-sharing businesses for obvious reasons, but the associated high costs have held back mainstream introduction. EDAG’s Light Car Sharing Concept aims to be affordable and easy to maintain with lightweight composites, swappable parts and lithium-ion batteries. Cars communicate with one another through a system of LEDS. The Light Car Concept also uses GPS tracking software, so car-sharing companies can locate their vehicles at all times. The flexibility, low cost, and trackable nature behind the design of the Light Car Concept make it highly appealing as a shareable product. It will be interesting to see if it makes it into a greater shared system.
Move About fleet of Think City. Photo Credit: Move About.
Think City is the world’s best-selling electric car and the lead EV in Move About, the largest fleet of shared electric vehicles in the world. The Think City EV lacks all of the supplemental bells and whistles of its rivals, but has a reputation for being both reliable and durable — important components of shareable design. Move About benefits from being able to provide this cost-effective personal mobility, a good battery life to shared use, and a visibly sustainable systems model.
4. Bike-Sharing Systems — Everywhere
Denver B-cycle. Photo Credit: Fast Company.
Bike-sharing systems have launched or are being planned in a surprising number of major metros throughout the world. According to Botsman, it’s the fastest growing form of public transportation. And that’s a beautiful thing. Denver has B-cycle, Paris has Velib, and Montreal has Bixi, each playing an integral role in building sustainable sharing communities through the design of networked objects. Most bikes in these systems are designed to be shared. Denver’s B-cycle sports a feature that sets it apart — an onboard computer that calculates calories burned and the carbon offset for users which then can be tallied for system-wide performance data. Getting feedback on both individual and collective health to drive positive behavior is especially shareable.
Botsman applauds that effort, and wants to see more of it: "I envision a world where products can report their status in real time. Where is it now? It is available for use by someone else? What story or information does it hold? Smart, sociable, and shareable products are the future. It's a massive and exciting opportunity for designers."
5. Sobi (Social Bicycle System) — New York City
Sobi Bike System. Photo credit: Treehugger, Sobi.
This prototype station-free public bike-sharing system uses mobile communications, GPS, and a big secure lock that can be attached to any bike or bike rack. The appeal of a sharing system like Sobi is that you can deploy it anywhere and the start-up costs are minimal compared to other standard bike-sharing systems. The implication is that such technology can make bike sharing more scalable, and penetrate beyond major metros.
6. Electric Urbikes Trapper — Spain
Urbikes Trapper. Designer: Eduard Sentís and his company Modular BPS. Photo Credit: Treehugger.
Dubbed the first Intelligent Public Bicycle, the electric Urbikes Trapper is just that. It’s designed to overcome all existing bike-sharing problems through features like solid tires, a maintenance-free shaft drive, and a theft-free design, as well as software that predicts where bikes will be needed. In addition, the electric power makes it accessible to more users, though the cyclist generates 80% of the energy the bike consumes with the remaining 20% being charged at solar-paneled sharing stations. Urbikes’ easy system integration along with the low-maintenance, theft- and vandal-free design, make this a viable, if not extraordinary, bike-sharing option.
7. Flatshare Electrolux Refrigerator — Vienna
Flatshare Electrolux Refrigerator by student designer Stefan Buchberger, a design student at the University of Applied Arts in Vienna. Photo Credit: Electrolux, Core 77.
The fridge can be a zone of conflict for house sharers and can make house sharing unattractive. This prototype fridge with stackable modules alleviate the troubles around sharing living space. And you can move it to the next flat when it’s time to go. While the modules themselves do not address truly shared use, the thinking around the needs and wants of a co-habiting group is highly relevant. In this case, the Flatshare fridge is part of the housing platform that functions successfully by meeting the group’s needs. House sharing is one important way to impact collaborative consumption, so efforts to design a better experience around it go a long way.
A concept addressing the problem of long layovers, Sleep Boxes are small cubicle spaces that are available at airports, train stations, and hostels where you can book a ‘box’ and catch some sleep. It’s not a new concept, the Capsule Inn of Japan precedes it, but Sleep Box does it with a little more space and accoutrements. Its high flexibility, durable materials, modular nature, and easy public access make it entirely share-ready.
9. The Things in Your Basement
Inside our homes and apartments, yards, and garages, bereft of public access, most physical things naturally — and by design — go unshared. What do we do with all of this unused stuff? Here’s a low-tech sharing system that came in the form of a physical tear-out from GOOD magazine in 2010. It allows you to request things and resources from those living around you without ever bothering them. The “pro” versions of this are peer-to-peer sharing systems such as Neighborgoods, Rentalic, and Swap that allow you to share, rent, and swap your stuff. Everyday things must become part of connected systems to be shareable. The more we share, the more communal wealth we generate.
Design thinker Ezio Manzini says, “There are not many products specifically designed to be shared because, in the social innovation processes based on the idea of sharing something, the first phases in a sharing modality are normally done using existing products.”
10. Itizen — Minneapolis
Style & Conscience purse with Itizen QR tag, Itizen mobile app. Photo credit: Style & Conscience, Itizen
Itizen is a publishing platform that allows you to attach digital content to physical things with the use of QR codes. It makes any object more shareable by connecting it to a network, enabling the user to track its condition and whereabouts, and allowing the user to access personalized and useful information. Users can add content and capture the full life of the object as it is used, maintained, enhanced, and passed on to others. By making an object an “itizen,” any thing a person has can become a valuable contributor to one’s community. (Full disclosure, I’m one of the founders of Itizen.)
It's ideas like all of these that make Botsman look toward the future of collaborative consumption with enthusiasm. She says, "I could not think of a more exciting time to be a designer. We are just at the start of a massive ownership revolution where we are focusing on how we can access the need or benefit of a product. In some instances, there is a white space opportunity to create services that dematerialize the physical product all together (e.g. e-Books), and in other cases, it's about designing a system that makes a product smart, social, and easily shareable."
Thanks to Bruce Sterling inspiring this story with his work on spimes.