"The haredi (ultra-Orthodox) sector is familiar with the sharing concept from interest-free loan societies. Now we're educating the market about something new," says City Car cofounder (with Arye Blumenthal) Meir Rotem. City Car is a car sharing company gaining popularity in the haredi sector. Rotem says, "We started in June 2013 with eight vehicles. As of now, we have 350 vehicles and nearly 13,000 subscribers paying NIS 10 a month, which pays for the insurance on the vehicle. Anyone who wants can cancel his subscription the same month; there's no obligation.
"In addition to NIS 10 a month for the subscription, customers pay NIS 5-19 per hour for usage, depending on the time of day. NIS 5 is what a cup of coffee costs. There is also a charge of NIS 1.60 per kilometer. The rate decreases over 50 kilometers, because on a long trip, the car uses less gasoline, and that's significant. Beyond that, if I succeed in getting a large volume of use, I can lower the price. If three tenants in your building use the same car, you can make maintenance cheaper."
"Globes": Where do you operate?
Roten: "In deployment, we're in all the haredi cities: Jerusalem and the surrounding neighborhoods (Tel Zion, Telz-Stone), Beit Shemesh, Beitar Illit, Modi'in Illit, Elad, Bnei Brak, Petah Tikva, Ashdod, and Bat Yam, where there's a concentration of 500 haredi families. Actually, there's no concentration of haredim without our presence, except for Ofakim and Tzfat.
"There is a specific number of cars in each city, depending on demand. They are distributed so that the maximum distance between one car and another is 500 meters. The ideal is a walking distance of two or three minutes; otherwise, it could be better to travel by taxi. In our sector, everyone travels with a lot of children, and walking a minute takes forever. With us, you can take the car at point A and return it at point B."
How long is the average rental?
"It depends on the area. In the Jerusalem area, it's about three hours, and about two hours in Bnei Brak and Modi'in Ilit. Where the length of the journey is concerned, the average in Jerusalem is eight kilometers; in other words, people travel within the city. We were sure that people would travel greater distances, but we discovered that they don't. The average in Elad is 15 kilometers, because everyone travels out of town."
Why do people take your cars?
"In our internal surveys, they say mainly for things like family celebrations and doctors' appointments. In the winter, a great many people take their children to school with our cars, so rain is good for our business. It's much more worthwhile than a taxi."
Is the economic model proving itself? Are you already making a profit?
"It was hard at the beginning, but we're making a profit now. But I'm not concerned about profits; I want to increase the number of usages. Every minute that a car stands still is a loss of money."
What types of cars do you use?
"We have mainly small family cars, because most of the families don't travel with all their children every day. We also have 10 cars with seven seats, but that just a supplementary service we provide."
Do all the cars stop running on the Sabbath?
"Yes. I have no interest in working on the Sabbath. A lot of non-religiously observant people use the service, but our representative tells them on the phone that the car's system doesn't work at all on the Sabbath. When the Sabbath starts, we shut down the communications system with the cars, so people don't pay money for the Sabbath. If someone takes the car an hour before the Sabbath in order to travel to his parents, and they travel again after the Sabbath, they don't pay for the hours of the Sabbath."
What is the market's attitude towards you?
"Our advertising firm calls its work 'educating the market.' We're regarded as a car rental company, but one that works with a different method, and people understand the difference. I have worked in the car rental sector for many years, and I've seen people rent cars who didn't keep them clean and didn't take care of the car. As they say, a rental car gets as badly beaten up as a field vehicle. With us, people feel the sharing. People take care of the cars."
Are there places to park the cars?
In crowded city centers in Bnei Brak and Jerusalem, we rent private parking spaces; in the other cities, we park in the street. We have an agreement with the Bnei Brak municipality, and people who rent our cars don't pay for parking in spaces marked blue and white. The municipality gets payment from us, maybe less than they would get from people paying for parking, but for them, car sharing is like public transportation. It takes cars off the road and educates people to use shared transportation."
There's a technological challenge in haredi society. Many people do not have smartphones.
"70-75% have a kosher phone, but we also have a manned call center. It adds to our costs, and it's hard to keep a high level of service. Our employees are like taxi stand controllers. They have to explain to a person where the car is, whereas if he had a smartphone, he could have seen it on an app in a second. But we respect people here who do things differently. We also have an advantage in the haredi sector, because we're not telling people to give up something they have; we're offering them the use of something they didn't have at all up until now."
Published by Globes [online], Israel Business News - www.globes-online.com - on July 16, 2017
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