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Date: Wed, 18 Jan 2006 17:47:23 -0500
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From: "R. A. Hettinga"
Subject: [Clips] Key Technology
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http://online.wsj.com/article_print/SB113753529668348891.html
The Wall Street Journal
January 18, 2006
BUSINESS EUROPE
Key Technology
By BRUNO GIUSSANI
January 18, 2006
ZURICH -- Car-sharing used to be mainly an option for environmental
activists who would use a car only for lack of "greener" alternatives.
Today it is increasingly hip to be a car-sharer, particularly among
socially conscious urban types with fast and flexible lifestyles. These
people may not need a car often and don't want the expense of maintenance
and insurance or the inconvenience of circling nearby blocks looking for a
parking spot when they do drive.
As a result, car-sharing is growing all across Europe. The German
CarSharing Association has over 70 member companies operating locally in
250 cities. The Italian government has put $9 million into Iniziativa
CarSharing to promote the model countrywide. Corporations are also
discovering its advantages. But none of this would have been possible had
the leading companies in the industry not used some widely available
wireless technology to solve a (literally) key problem -- how to give the
car keys to the customers.
For all intents and purposes, car-sharing firms are car rental companies
based on a slightly different economic model: One has to sign up as a
member first and pay a basic annual fee. But beyond this step lies the
familiar sequence of reserving, picking up, driving and returning the car,
as well as paying per usage. In the case of car-sharing, however, a member
who needs to go pick up a piece of furniture on a Saturday, for example,
can rent a car for just a couple of hours rather than paying for an entire
day or weekend.
The other main difference is that they are self-service car rental
companies. This is more than just a semantic detail. If you book a car from
a traditional rental company, the contract is enacted when, after having
walked into the agency and filled out the paperwork, you're given the car
key. A self-service car rental, however, doesn't have branches you can walk
into, or agents to hand you the key. For years, this was a problem for
car-sharing companies.
For Mobility, Europe's largest car-sharing firm with 63,000 members and
1,800 vehicles in Switzerland, it came to a head in 1999 when it had 10
cars stolen in a single night.
The company realized it needed to change its key-handout procedure, which
up till then consisted of giving members a universal key that opened any of
hundreds of "key boxes" located next to cars kept in public parking lots or
near train stations nationwide. In these marked boxes were the actual keys
of those cars. The system worked surprisingly well for a while, but nothing
impeded members from opening the box, getting a key and taking a car
without having a reservation, or without paying -- or even from showing up
with friends, taking all the keys, and driving away with all the vehicles.
That's what happened that night in 1999.
By then, cellphone coverage in Switzerland was becoming almost seamless (it
is today). Built into the GSM protocols is a popular feature called SMS
that allows for the sending of short messages between phones and among
other wireless devices.
SMS is one of the technologies that Mobility seized upon to solve the key
problem that was jeopardizing its very survival. Another is RFID, or Radio
Frequency ID, an automatic identification system that relies on cheap
electronic tags and sensors. Mobility combined the two with a custom-made
onboard computer, redesigning the way it works and producing a quite
dramatic impact: None of its cars has been stolen since.
Now Mobility -- like several other car-sharing companies, such as Cambio in
Belgium, CarCityClub in Italy and Denzel in Austria, which use comparable
systems -- manages the car keys quite differently.
Upon sign-up, every customer receives an RFID card that contains their
personal and membership data. When they call the customer desk (currently
only 15% of all bookings and falling) or book a car through the Web (the
rest), Mobility's main computer sends the reservation details to the
onboard computer via SMS. To pick up a car, customers wave their RFID card
in front of a sensor installed under the windshield. The onboard computer
compares the two sets of data: that from the card and that from the SMS. If
they match, it unlocks the car. The keys are in the glove compartment.
Even if a thief smashed the window and took the key, the engine will not
ignite. Without proper RFID identification, the computer will not allow it.
The SMS/RFID system has a couple of disadvantages. First, if a car is
parked in an area without GSM coverage, the booking information cannot be
passed to the onboard computer, which in turn will not unlock the door when
the renter shows up. But as coverage extends, that's very unlikely:
Mobility says it has never had such a case. More significantly, the whole
scheme has added about $1,500 to the cost of each car, which discourages
the rapid rotation of the fleet. However, that cost is already decreasing.
And the system, on top of allowing down-to-the-minute usage monitoring and
reporting, offers a huge upside: By optimizing management, new fleets can
be rolled out with little effort.
Enter Business CarSharing, the corporate fleet outsourcing service launched
only two years ago by Mobility and which accounts already for one-sixth of
its business (total revenues in 2004 were of 43 million Swiss francs, or
$29 million). Companies use a fleet of cars and vans and other vehicles
managed by Mobility, but as part of the deal their traveling personnel can
also book any other Mobility car across the country. They travel to another
city by train or plane, go to the Mobility parking lot, swipe that RFID
card in front of the windshield's sensor and drive to the customer. (Some
of the other companies mentioned above provide similar services.)
What's next? With the card in the pockets of tens of thousands of people,
it's imaginable that the scheme could be developed into a hybrid of
car-sharing and public transportation: The same card would allow people to
purchase a train ticket and book the car to use at destination, with the
two items showing up on the same invoice at the end of the month.
All this is enabled by the "cloud" of wireless connectivity that
increasingly surrounds us and the objects of our daily lives. By plugging
into it, car-sharing companies have designed systems that give them
flexibility, efficiency and control. As for Mobility, besides transforming
itself from a dwindling entity into an exemplary business, it removed the
memory of that night in 1999.
Mr. Giussani is the author of several books on technology and society. His
blog is at giussani.typepad.com.
--
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R. A. Hettinga
The Internet Bearer Underwriting Corporation http://www.ibuc.com/
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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--
-----------------
R. A. Hettinga
The Internet Bearer Underwriting Corporation http://www.ibuc.com/
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
