The Logistics of Keeping Fleets in the Fast Lane

Becca Rabinowitz, Director of Strategic Business Lines at SpotHero

For decades, personal cars have been mobility’s bread and butter. But with the rise of attractive alternatives to personal vehicles, car ownership is no longer a necessity for people living in urban areas. And with a new generation fully accustomed to finding services through their smartphones, dozens of shared car providers are looking to fill the new desire for cars-on-demand.

But when you consider how much work goes into maintaining just one car, it makes you wonder how car share fleets are managing the logistics of car ownership—the responsibilities consumers have been quick, and thankful, to relinquish.

Companies like ReachNow, Canvas, and LimePod have felt the weight of these challenges in recent months, making now an important moment to think critically about how fleets can continue to support this growing demand. Before assuming responsibility over thousands of cars at once, fleets will need to master the three core logistical challenges of managing shared cars at scale: storage, payments, and servicing.

Storage

If you’ve ever driven in a busy area, you’re painfully familiar with the struggle of finding a parking spot. The average U.S. driver spends 17 hours annually looking for parking (and as many as 107 hours in busy cities like New York), and overpays $97 annually for parking. Now multiply that problem by several hundred, or several thousand, and you’ll understand the magnitude of the problem fleets are facing.

Fleet companies need enough vehicles to support demand during peak hours–but for most of the day, their cars will be parked. Without convenient locations to pick up and drop off shared cars, the value of their service decreases exponentially. To be most useful, fleets need access to various centralized locations to store their vehicles between rides, keeping them out of the way but readily accessible to drivers when and where they need them.

But sourcing these spaces in unfamiliar urban areas where car share and other fleet services are in high demand is no easy feat. And with cities growing increasingly resistant to on-street parking, this task will only become more challenging. As the industry grows, and competition for space increases, access to off-street spots will become crucial to fleets’ success.

To make matters even more complex, the off-street parking market is tremendously fragmented. There are hundreds of different garage owners in each city with no standards for the way parking is bought and sold. Parking technology companies—like SpotHero, where I act as the Director of Strategic Business Lines—that have the need for a network of parking spaces to serve up to consumers who are looking for them already have these relationships in place. By tapping into an existing network of off-street garages—with digital systems in place to support the entry and exit of shared vehicles—fleet managers could spend less time searching for parking and more time growing their business.

Payments

When it comes to paying for your personal car—whether parking, gas or maintenance—you can easily reach into your wallet and pull out cash or a credit card. But when it comes to operating a fleet of shared vehicles, payments quickly become complex. In addition to covering the cost of the actual cars–plus maintenance and insurance—many fleet companies, like Zipcar, cover daily payments such as gas and parking. This presents a tremendous logistical challenge in regards to billing.

Fleet payment is further complicated by the fact that in the mobility industry, there’s no standardization for payment processing—and fleets need a unified ecosystem where their payments can be processed uniformly across facilities, not dozens of point-of-sale systems that all require their own complex integrations. To simplify and streamline the process, fleet managers need a middle-man capable of uniting these disparate technologies. They need a way to centralize billing back to the fleet manager rather than placing a financial burden on the individual driver. SpotHero, for instance, has worked to address this need; but as fleets continue to grow in popularity, it wouldn’t be surprising to see other fleet-adjacent mobility companies, like Gasbuddy, create capabilities to support this emerging challenge.

Servicing

From oil changes to cleaning and repair, car servicing is known to be a drag. But when the “check engine” light comes on in your own car, you’re right there to see it; when you get into the driver’s seat, there’s a sticker on the windshield reminding you when your next oil change should be. It’s straightforward when you’re only responsible for the one car you use every single day. The real challenge would arise if you were to become responsible for maintaining thousands of cars at once, most of which you would never step foot in.

Any car owner who’s broken down at an inopportune moment will remind you that maintenance is not something you can afford to ignore. The best approach for fleet managers is to be proactive. A preventative maintenance schedule can combat potential problems before they arise, and ensure the entire fleet is running smoothly during times of peak demand.

In addition to regularly scheduled maintenance, fleet management software can help keep shared cars in check. Depending on the particular software, it can monitor everything from vehicle location to maintenance updates and red flags—ensuring drivers remain safe and cared for while using fleet services.

The Road to Successful Scaling

The value of fleets is undeniable. They give drivers all the benefits of cars—convenience, flexibility, and freedom—without the costs and hassles of personal ownership, allowing more people to travel on their own terms. But as companies, rather than individuals, gain authority over storage, servicing, and payments, their opportunity comes with big responsibility. Fleets are in a powerful position to change the tune of car ownership at scale, and those with an eye towards the future are looking to new technologies and services to tackle these challenges head-on.

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