Greenwheels was founded in the Netherlands 25 years ago. The car sharing company is now the market leader there and is also operating profitably in Germany. But what are the reasons for this success in the highly competitive car sharing market? An overview.
Students have a lot of time – that's common knowledge. At least if we believe the conventional wisdom. But a lot of time is often a useful breeding ground for the best ideas. The fact that the two founders of Greenwheels, Gijs van Lookeren Campagne and Jan Borghuis, made fruitful use of their student days in the early 1990s is evident to this day. They asked themselves the following question: what if not everyone owned a car, but instead people shared its use and therefore its costs too? Because one thing was clear enough even back then: cars take up a lot of space and their fixed costs are high, especially in cramped cities. Although the climate debate was not as prevalent then as it is today and the level of individual private transport was lower, the founders had a feel for future forms of mobility. On 21 June 1995, i.e. around 25 years ago, the time had come and the first Greenwheels vehicle was ready for rental on the streets of Rotterdam. Today, the company is the largest car sharing provider in the Netherlands with a fleet totaling 2,700 vehicles. In Germany the company maintains a fleet of 750 vehicles. And in the meantime, what was then a small niche business has since grown into a worldwide industry.
Dr. Phillip Gronstedt has been Managing Director at Greenwheels since July 2020. For him, what distinguishes his new employer is "that the company has remained true to itself over the past years and has always striven for continuous and organic growth". Indeed, since Greenwheels has been run as a joint venture by Volkswagen Financial Services and Pon, the Dutch Volkswagen Group importer, it has developed over the years into a financially solid midsized company with a positive operating result in a market that is characterized in many areas by loss-making operations and fierce dog-eat-dog competition. Under the leadership of Andrew Berkhout and Gronstedt's predecessor Alexander Hinz, for example, revenues and the number of customers have doubled in the last five years.
Clever business model meets good cooperation partners
In addition to the user culture that prevails nowadays, especially in the Netherlands, the sustained growth of Greenwheels also rests on its consistent focus on customer needs and effective integration within the transport policy concepts of the cities. As far as the latter is concerned, there are three essential criteria that play a role in every success. Firstly, there has to be an urban environment with as high a population density as possible. Secondly, the local public transport provider must be open to cooperation and have a well-developed route network. And thirdly, the basic principle of "car sharing" should already be familiar to the inhabitants. As Gronstedt points out, "It is particularly essential that people accept the idea of car sharing and know how it works. We aren't selling milk, but a product that still has to be explained."
Greenwheels differs from other automaker-affiliated providers in that the cars are location-based and reserved digitally. The available cars are scattered throughout the city in reserved parking spaces. That is where the cars are picked up and later re-parked after a trip. Users have to sign up for a subscription beforehand. A deposit is paid, and a fee is charged for the actual use of the car. The customer reserves a car at a specific pick-up location for a selected period via app or the website.
Car sharing on a free-floating basis and a station-based car sharing system only have the name in common. Essentially, they are two completely different approaches.
Greenwheels basically sees itself as a complement to the bus and train and not as their competitor. The station-based model (whereby cars are picked up and dropped off at specific car sharing stations) shows its strengths as a solution for precisely this purpose and can be optimally integrated into the local public transport system. This is because its users are not spontaneous one-way drivers who need to get quickly from A to B. Accordingly, the tariffs are geared towards round trips that can be planned in advance and with which longer family visits, for example, can also be arranged. First by bike, then public transport, then car sharing, and back again – that is how an ideal type of car use might look like. Free-floating setups, which allow the car to be dropped off again at any place within a defined urban area, hardly appeal to Greenwheels customers. Gronstedt explains: "Car sharing on a free-floating basis and a station-based car sharing system only have the name in common. Essentially, they are two completely different approaches." The general goal of Greenwheels, he adds, is to make cities more livable and to reduce the number of vehicles in the cities to that end. This was also confirmed by a survey among 800 users, according to which a station-based car-sharing vehicle replaces on average eleven owned vehicles. But that's not all. The space problem in the cities can also be solved with such a mobility solution: for example, Greenwheels users apparently saved 224,000 m2 of urban parking space – an area equivalent to around 51 soccer fields.
A look to the future
Greenwheels will remain faithful to its growth strategy in the future too. In the Netherlands, the company intends to expand its strong market position and profitably increase the proportion of its electric vehicles at the same time. And further progress is to be made in its fleet business with commercial customers. As things stand at the moment, Greenwheels operates the largest corporate car sharing fleet in the Netherlands with 900 vehicles, 20 customers and 150 locations. Gronstedt notes: "We are seeing that many companies want to improve the utilization of their pool of vehicles and at the same time open them up for private use by their employees. There is still a lot of potential here." In Germany, on the other hand, the focus is on selected cities in order to increase regional visibility and thus optimize the utilization of the fleet. To this end, the company plans to further expand its presence in Berlin. Greenwheels is already the largest stationary car sharing provider in the capital. "In Germany, we want to work even more closely with like-minded players such as transport companies, housing associations or mobility providers like Volkswagen WeShare and become their chosen partner," Gronstedt reveals. The goal is the integration into so-called Mobility-as-a-Service (MaaS) offers. Within such a framework, customers are provided with a seamless, multimodal journey experience by choosing the best mobility mix for their needs from a variety of interlinked modes of transport. One thing is certain: there is no shortage of ideas for the future.