Monday, February 13, 2017

I'm Disappointed in You, Car2Go and ReachNow

Please permit this short, but long overdue, rant about what I consider to be a poor decision by one of my favorite carshare companies - Car2Go. (Updated now to direct this rant also at ReachNow, as well.)

It's the "Driver Protection Fee" charged all Car2Go customers in North America.  The "protection" it provides is reducing the insurance deductible from $1,000 to $250, providing a "benefit" to customers whether they want it reduced or not.

The Driver Protection Fee works like this: Your first 90 trips each year have an extra $1 tacked on to the final amount.  After 90 trips the fee goes away until next year.  90 trips is an average of 7 trips per month - 2 trips per week (the kind of customer that any carsharing company would be smart to reward).

But for the rest of us, the vast majority of its customers, it effectively raises the per minute cost.  For example: an 11 minute trip billed at the advertised rate of 41¢ per minute would cost $4.51.  But with the Driver Protection Fee that 41¢ per minute trip actually costs 50¢ per minute.  A 25 minute trip doesn't cost $10.25, it costs $12.50 - 45¢ not 41¢ per minute.

Even worse as far as I'm concerned, on the web site page showing the prices, the Driver Protection Fee isn't even an asterisk next to the rates, but shown on a separate page.

To be fair (thanks to a reminder from Car2Go) ReachNow has something similar - the "Shared Asset Fee".  According to their FAQ the $1 per trip Shared Asset Fee is to cover cleaning of vehicles - something we expect to happen anyway.  At least with Car2Go you get the insurance deductible lowered.  It doesn't go away after even 90 trips as with Car2Go.  Worse, the ReachNow Shared Asset fee is levied only in Seattle and Portland but not Brooklyn.  (Seems hard to believe we're messier than Brooklyn-ites!)

Look, if you want to charge me 50¢ per minute, fine, please do.  I can tell you that 5¢ per minute isn't going to change my decision to use Car2Go if it's a trip I want to take and there's a vehicle close by.  And if you want to give me a discount after my 90th trip, I'll take it.

One of the fundamental principles I tell start ups I'm working with is to keep pricing simple and transparent.  This avoids confusion about what a trip is going to cost and sends a message to customers that your company is being fair and open with them.  Please Car2Go and ReachNow, you can do better.