The highway lobby is in trouble. People are driving less. Cars are no longer cool with millennials and it’s pretty clear we won’t need as many roads as we used to.
You know the drill: sit back in the bus or train and focus on the screen. Read. Tweet. Email. Driving in crazy traffic is not an attractive option.
Even the car share people are taking note.
According to GoGet, which pioneered the car share phenomenon in Australia, the trend is so clear that the company is looking seriously into driverless cars.
The company last year teamed with the University of NSW to test Ethel, a little Yaris car, to see how the dear thing performed on its own.
Officially known as the Autonomous Vehicle Research and Development program Betsy is busy collecting data right now, and she had better not be distracted.
GoGet co founder Bruce Jeffries at the time said, “Ultimately, the future is one in which everyone will have a chauffeur if they want one, thanks to vehicles that will drive themselves.”
But before that vision materialises into reality, the shift in preferences from consumers is already starting to impact property buyers, tenants and developers.
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Ultimately, the future is one in which everyone will have a chauffeur if they want one, thanks to vehicles that will drive themselves.
Bruce Jeffries, co-founder, GoGet
In Melbourne we’ve covered stories of edgy architect/developers building entire apartment blocks with no parking and providing public transport passes instead. Nightingale for instance.
A few years ago the notion of no parking onsite would have raised hackles from buyers, council and neighbours alike. But the mood is changing. Partly, it seems to do with the desire to live in the inner city and play the screen game and partly, say the property insiders, it’s to do with the rocketing price of property especially in Sydney and Melbourne.
If you don’t provide parking, you can shave $75,000 off the price of an apartment, even $100,000 in some areas, according to David Butt, sales director for Greencliff, which markets the huge Central Park project at Broadway on the edge of Sydney’s CBD.
Central Park is one of the greenest precincts in Australia and in keeping with its raft of sustainability features in March 2014 opened a “Super Pod” for 44 car share spaces in an agreement with GoGet.
The pod launched with 10 vehicles and has already grown to 26 GoGet cars including three and four Rav4 four wheel drives.
Butt say recent sales in the precinct, which will eventually house 2000 apartments, also demonstrate the changing preferences.
“What’s interesting about Central Park is that two bedroom apartments sold from $1.1 million to $1.3 million very quickly without parking. And that’s a first.”
But it was the speed of sale that surprised, he says.
Then there’s the price issue.
“I think some buyers are happy to get good investment property for less,” Butt says.
“You would not have heard of that five years ago. Investors would have baulked at apartments with no parking.
“It’s an emerging acceptance just like it’s a trend that apartments are getting smaller and that people are aiming to live closer to the CBD.”
And not driving.
And that’s what GoGet is just a tad concerned about, not right now, but as an emerging trend that could impact the business longer term, 10 or 15 years from now.
It’s a problem that’s ironically close to home.
Senior business development manager Christopher Vanneste says “half of our staff don’t drive”.
With that message ringing loudly Vanneste says the company has embarked on a range of measures to make sure car share can remain part of consumer preferences.
As well as Ethel, there is a learner program – helpful if car share runs in the family and the parents don’t own their own car – a program for under 25s (excluded by regular car hire businesses) which may force some young people to buy their own car, and a new one-way program that means drivers can leave their car in a place other than where they picked it up.
GoGet ought to know what the market is thinking. This company started with three cars and 15 members in Newtown 12 years ago and now has a membership base of 65,000, and it conducts surveys that tell it a lot about the sentiment. It’s database you can imagine would be very closely guarded.
Vanneste says demand for car share is huge. Membership is currently growing at 40 per cent annually and cars 20 per cent. The growth spurt recently forced the company out of its bursting-at-the-seams Glebe office into new CBD digs on Goulburn Street.
So far Sydney is by far the biggest market with 40,000 customers, with the balance mostly in Melbourne. Sydney has 1400 cars, while Melbourne has 400.
Typical clients or members are, not surprisingly, “young urban professionals” but the base has been growing to families and older people.
Growth has been geographically organic, so spreading along adjoining suburbs and following customers as they move from the inner city places further out.
So in Sydney it’s in Dee Why, Baulkham Hills, Parramatta, Rockdale and Mascot. In Melbourne it’s in places such as St Kilda to Coburg, Footscray, Hawthorn, Mulgrave, Springvale.
Vanneste calls it the “network effect”.
So what can the company say about its members preferences?
First, convenience is king.
Customers don’t want to walk very far to access “their” share car, Vanneste says. In the same way business members like to pick up a car on Friday after work and near their work and return it to the same place on Monday.
Another preference for suburban work meetings might be to take a train to a suburban centre, such as Parramatta, and then pick up a share car to drive to the meeting.
“What we’ve seen from members who don’t own a vehicle at all is that they want a unique range of transport options,” Vanneste says.
But not the responsibilities of ownership.
It’s a preference noticed by David Butt. People like the pool and spa on the roof, he says, but they don’t feel they need to own once. Just as they want to use an Audi on the weekend but not worry about buying the car and the garage.
“This ties in really well with how these apartments are getting built,” Butt says, “smaller spaces but better access to facilities.”
But while developers at Central Park might get the concept, Vanneste says, some developers are “still trying to wrap their minds around it”.
In some areas such as Green Square, where it’s difficult or expensive to excavate, the no parking trend can be a relief, he says. This means you can increase the apartment yield and/or bring down the price of units.
Vanneste recommends one car share space for every 20 units.
So what’s the downside of changing driving preferences? According to Vanneste the big challenge to expansion is to convince residents – and that means the local councils who have the final say – that car share doesn’t remove the number of parking spaces, it adds to them.
He says internal calculations indicate this is at the rate of about 12 spaces for each car share. This estimate is based on member surveys of decisions to defer car ownership.
On a sustainability basis this all adds up to what the company terms “conscious transportation”. Vanneste says that people who have a car share arrangement tend to only drive when they need to while owners of cars might feel compelled to drive further or more often to justify their asset.
And if you drive less, he says, you will tend to support your local village more, by shopping locally and sticking to neighbourhood café and such.
