Effectiveness of different incentive models in free-floating carsharing systems: A case study in Milan

Abstract

In recent years, carsharing and especially free-floating carsharing (FFCS) concepts have gained popularity, especially in urban areas. In FFCS systems, customers can pick up and drop off vehicles anywhere in a defined business area. While these systems offer a maximum level of flexibility for the customer, the operator is confronted with spatiotemporal demand asymmetries. In order to offer a reliable mobility product, the operator has to assure a certain level of availability by relocating vehicles. As relocations are associated with costs, the FFCS operator has introduced a special incentive system in Milan. The operating area is two-stage, i.e. it consists of a central business area and a peripheral business area. As the peripheral area is less attractive, the operator offers a bonus minute incentive for cars picked up in the peripheral area and returned in the central area. The second incentive (reduced rates) has no restrictions on where to return the vehicle. The goal of this study is to evaluate and compare the effectiveness of the two different incentives regarding the potential to substitute operator-based transfers. To this end, we analyzed more than 600,000 app calls and more than 80,000 rentals. First, we partitioned the operating area into zones to evaluate their attractiveness. In a second step, the success of the different offer types was assessed by analyzing the influence of incentives on the idle times and comparing the vehicle distribution before and after the rental. As a result, we can confirm that the vehicle distribution is improved which means that customers can be influenced to return a car in a predefined area. The idle time after an incentive is placed is significantly lower than the average idle time in the peripheral area. A definite price sensitivity of the customers cannot be stated with the examined data.