BMW Gets Into the Car Share Game

Phil LeBeau | @Lebeaucarnews

Published 3:41 PM ET Thu, 5 July 2012 CNBC.com

Quietly, BMW has pulled into fast growing car share game.

CNBC.com

The luxury automaker has brought its DriveNow program to San Francisco, California with the service opening up for business at the end of June. While there have been programs around the country where you could rent a luxury car for a few hours or a day (and yes, Zipcar has luxury cars), BMW is the first luxury automaker to run its own car sharing operation here in the U.S.

Here’s how DriveNow works:

70 ActiveE electric cars are available for hourly rental
Parked at 9 garages in the San Francisco area
Licensed drivers over 21 may rent the cars
$12/half-hour with each additional driving minute costing $.32
$90 for an entire day up to 180 miles

The fact that BMW chose San Francisco and the ActiveE for daily rental is a smart strategic move. The city has proven to be one of the most enthusiastic markets for car sharing. It’s also an area that embraces electric cars, so offering the ActiveE for daily rental is a smart way to get exposure for the car. Remember, the ActiveE is only available for lease here in the United States.

How successful will the DriveNow program be in San Francisco? Could we see it expanded to other markets? I think it will do well in the city bay area. And over time I can see DriveNow in other cities like Los Angeles, San Diego or Miami. More importantly, there is a clear opening in the car sharing industry for luxury models.

I’m not sure Zipcar or other car share operators like Hertz have a lot to worry about with the DriveNow program. Sure, they may lose some business to BMW in San Francisco, but Zipcar is primarily targeting the mass market. Zipcar does offer luxury models (including BMWs), but it also requires a membership fee, which BMW does not.