Memed Erdener interviews Berkman Çavuşoğlu, a cofounder of YOYO Car Share, a new car-sharing company in Turkey, about the changing lifestyles in the city.
What do you think the future of transportation looks like?
I think the future of transportation will be a blend of public transportation, private car ownership, and car sharing. Instead of physically changing our cities, we will be changing our lifestyles because it is not easy to enlarge existing roads or to continue making new roads, especially in the dense metropolitan areas. At the same time, new users, like generation X and Z, have a tendency to share things like houses, apartments, and cars. It is much more economical to do so. These tendencies will be reflected in our transportation systems as well.
Car sharing is more economical than private car ownership. If we look at the numbers in other cities, we see that each shared car eliminates fifteen to twenty cars on the road. Shared cars also help reduce public transportation loads. With a reduced number of cars in traffic, there is also the obvious environmental gain of significantly less carbon emissions. When all these advantages are taken into account, I believe private car ownership will be replaced by car sharing. And I think the change will be faster than what people imagine. In the United States, car sharing has been available for twelve years, and it is growing much more rapidly in the last six years.
Are there many different companies offering car-share services in the United States?
Actually, there are two business models for car sharing in the United States. First, it is business to consumer; private companies offering car-share service to consumers. In the second model, it is nonprofit organizations, like municipalities, that are offering this service to consumers. Similarly, European governments have started promoting car share in order to decrease traffic density in urban regions. Additionally, there is the potential to combine car sharing with electric vehicles. And combine the decrease in transportation density with zero-emission vehicles. This will be a great achievement. Today, electric cars are not cost effective. Once the prices of electric cars are more competitive, they will be very popular.
How did you adapt your business model to Istanbul?
Accessibility is the most important parameter to the success of car sharing. It has to be convenient for the consumer, because everyone wants their cars right in front of their houses or offices. It is not easily achievable in Istanbul, where cars are expensive and the city is very big. You have to be everywhere. With five thousand cars you could set up a very convenient car-share system. Of course, this is a big investment, and it would need some time.
What are the biggest challenges you face in setting up YOYO?
Car sharing is not a car renting business, though many people think it is. It has many components. First, you have to have the technology, and you have to have the e-commerce and m-commerce knowledge, because the whole operation runs on the Internet and on mobile phones. At the same time, it’s a membership club; it’s not just renting a car to somebody and saying “good bye!” You need to have a big customer-relations management with backup and loyalty programs underneath it. And, of course, you have to have a fleet, and operate it. You have to combine all these parts to make it work.
Compared to other places in the world, is there anything specific to Istanbul in terms of attracting customers or alternative models?
In all cities where car sharing is possible, you have to drop the car to the same location you pick it up. Otherwise, the company has to chase the cars, all day long. But I think we found a way to do something different. And we will be implementing it. We will have a system where you can have your car whenever you want. We will bring the car to you, and we will take the car from wherever you leave it. So it is going to be a different value proposition. That’s a difference we will be bringing. This is possible now in Turkey because of the competitive labor market.
In the future, driverless cars will actually provide those services. Do you agree?
This is exactly true. They already started testing driverless cars in small islands in Italy and other parts of Europe. Most likely in the future, we will be using car sharing without the drivers.
Do you have competitors in Istanbul?
Actually, we are the third company setting up in Istanbul. We would like to have competition actually, because then there would be bigger awareness in the market for car sharing. We are fighting against the windmills… car selling companies have been saying to the consumer you have to have the car for prestige and style. Today, what we are saying is: You do not have to have the car; cars are everywhere.
Mr. Çavuşoğlu, thank you for the interesting talk!