Community driven success
- Josh Mehlman
- 2 June 2009
- Page 1 of 2 : single page
Photo credit: Anthony Geernaert
began in 2003 as a car sharing service in inner city Sydney. But
rather than the patchouli-scented co-op you might expect, GoGet is a fast-growing business that makes intelligent use of online and mobile technologies. Josh Mehlman looks under the bonnet.If you want to experience first hand why some people give up on owning a private car for other than financial reasons, look no further than the inner-Sydney suburb of Newtown, home to well-heeled bohemians, fixer-upper yuppies and a dwindling number of students. Its narrow 19th-century streets, lined with terrace houses and parked cars, and its traffic-choked main arteries, were the impetus behind Newtown Car Share – now called GoGet, a national car share company with thousands of customers across four cities.
“The urban area in the inner west is dominated by the car, whether it’s via the main roads that go through there like Parramatta Road or King Street, or simply by off-street parking,” says GoGet co-founder Nic Lowe. “If you’ve got a street that’s three cars wide, two sides of the street will be completely packed with cars.”
In November 2002, Lowe and his friend Bruce Jeffreys were looking to start an environmentally friendly business that would take advantage of their complementary strengths: Lowe’s economics background and software development skills, and Jeffreys’s experience working in planning and sustainability for the NSW Government.
Car sharing seemed an obvious choice, given the concept was already operating in approximately 600 cities around the world, Jeffreys explains. He had already spent three frustrating years trying to get such a program operating through the NSW Government, but found little interest.
“I think the NSW Government likes to propose massive infrastructure projects that never, ever get built,” he says. “Car sharing is a small, practical thing that you could get going right now, but to this day, they still prefer these massive projects to practical measures that will make our cities more liveable.”
Step by step
Lowe and Jeffreys hired a stall at the annual Newtown Festival and used it to gauge the demand for a car-sharing service. Following a positive response, they started up a business that launched in June 2003.
“We set it up as a trial and got 12 people that we didn’t know to join,” says Lowe. “We started off with three cars: my car, Bruce’s car and one we borrowed.
“We looked internationally at the governance models. We could have set it up as a not-for-profit, partly for profit or a business. Our research showed that if you set up as a not-for-profit, you had slow rates of growth and it was very hard to get finance. Also, Bruce and I were prepared to back it personally. If it was not-for-profit, it could be taken off our hands at any time by the board.”
That said, neither business partner went into it thinking it was a get-rich-quick scheme; there was an equally important goal of changing behaviour for an environmental benefit.
“If we wanted to make pots of money, we would be doing other things; this is not the best business in the world to be in,” says Lowe. “But our objective was to change people’s behaviour en masse; to change the thinking about how people used private cars.
“Instead of owning a car, you join our service and change your default method of transport from taking the car you own to looking at the car as just another piece of your transport. A lot of our members use our cars to do certain trips. They’ll catch the train or the bus to work, and for shorter trips they’ll walk or ride their pushbikes.”
For customers who don’t own a car, the benefits are obvious, given GoGet cars are available from around $5 per hour. A shopping expedition or trip to a business meeting that would cost $50 in taxi fares might only come to $10 using a car-share vehicle. However, GoGet’s main pitch is to car owners.
“If you drive less than 10,000 kilometres a year, you are probably better off being a member of a car-share service,” says Lowe. “If you’ve got this underutilised car sitting in your driveway, and there is a car share close by, you are better off selling the car and putting the money in the bank or buying a holiday.”
Thinking local
The company’s other main stakeholders are local councils, which provide dedicated parking spaces for car-share vehicles. Jeffreys says they are much more responsive to the idea than the NSW State Government was.
“They’re on the ground dealing with the problems; they’ve got their residents and businesses saying, ‘There is not enough parking, there is too much traffic’,” he says. “We go in and tell them that one of our car-share cars is used, on average, by 22–24 members and gets about seven cars off the street.
“That means the car is used more efficiently and people are using a brand new, low-emissions car instead of a fleet of older, privately owned cars that are more polluting and less maintained.”
While the service started out in Newtown, the suburb with the highest proportion of Greens voters in the country, it was just as popular with right-leaning local councils.
“I think they take a different slant, which is that they see the efficiency of it; they see that this is a private sector solution to one of their big challenges,” says Jeffreys.
And while the company may not be a licence to print money, the two founders don’t believe there is a tension between an organisation that does good and one that makes money.
“Basically, the more efficient the business is, the more profitable it is and the more impact it is having on reducing car use and ownership,” says Jeffreys.
Go for growth
By May 2005, Newtown Car Share had cars in Melbourne and several Sydney suburbs. Jeffreys and Lowe decided a name change was not only well overdue, but also presented an opportunity to make a bigger brand statement.
“We chose GoGet because it expresses what you do with a car... to go get things,” says Lowe. “It is not a fashion statement or anything like that. It expresses what a car should be about, which is the utility.“
At the same time, Bruce and I realised that if we were going to make a go of it, we had to be big. The transition was basically about commitment; we committed ourselves to it full-time and also committed some capital to it.
“Our strategy for the last three years has been to grow as fast as we can and now we’re up to 160 cars in four different cities and thousands of customers.
“We grew 100% last year; this year we’ll probably do a bit less than that.”
As the global financial crisis started to bite, the number of people looking to downshift their lifestyles and reduce their living costs has kept membership growing steadily.
