BMWs 'DriveNow' Program Launches in San Francisco

Who says the car share biz is for younger drivers who want a cheap car to drive for a couple hours? Not BMW.


The German automaker has become the first luxury brand to jump into the car share game here in the U.S.

Its DriveNow program has officially launched in San Francisco where board member Ian Robertson believes those living in the city by the bay will embrace having a luxury car ready to rent. (Related Link: BMW Gets Into the Car Share Game.)

“We launched the program a few weeks ago and it’s already picking up a lot of interested parties,” said Ian Robertson, a BMW board member.

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 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.

But is BMW embracing car sharing when investors and some on Wall Street see growth for hourly auto rentals to be limited. In the last year, shares of Zipcar are down 56 percent due in part to the company cutting its revenue forecast for the year. In the second quarter Zipcar (which also rents luxury models) grew its revenue by 15 percent.

Unlike Zipcar, which is in numerous cities and college campuses around the country, the BMW DriveNow program is targeting select urban markets. “We expect that here in the United States that the city environment is where we are going to see the growth. And this of course is not something we are in for the next few months, this is something we believe is a long term strategy for mobility solutions,” Said Robertson.

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 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. (Related Link: Most Collectible BMWs.)


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-By CNBC's Phil LeBeau
Questions? Comments? BehindTheWheel@cnbc.comand Follow me on Twitter @LeBeauCarNews