To use AAA’s newest service–a one-way car-sharing startup in the Bay Area called Gig–you don’t have to own a car. The nonprofit, which is best known for its roadside assistance, is piloting the service as one step toward a future where self-driving cars, and dropping rates of car ownership, mean that the organization’s traditional business model needs to change.
When the 115-year-old nonprofit was founded, it was during another era of disruption, as commuters moved from the horse and buggy to the car.
“We were the first to create road signs and form the DMV, and eventually evolved into roadside assistance and insurance as primary means of continuing to enable mobility for our members,” says Mike Hetke, EVP and chief innovation officer at AAA Northern California, Nevada, and Utah, the branch of the federation of motor clubs launching the new service. “We now find ourselves, over a century later, at the forefront of another potential massive shift in personal mobility as we see changing fundamental shifts in attitudes about individual vehicle ownership, moving to transportation as a service, and a new generation that may be more inclined to collaboratively consume transportation versus owning the vehicle themselves.”
Gig is the first service to come out of AAA’s new innovation lab, called A3 Ventures, which is dedicated to finding new ways to serve the organization’s members as transportation changes. The service aims to fill a gap in local transit options, beginning in Oakland and Berkeley. Unlike other car-sharing services in the area, it’s designed to be one-way; you don’t have to return it in the same place you pick it up. Instead, through an agreement with local government, the cars can be parked in almost any parking space in both cities.
When you want a car, an app helps locate one nearby (you don’t need to be a AAA member to use the app). You unlock the car with your phone or an RFID membership card, and then leave it wherever you’re going inside a designated “home zone”; when you want to head home, you pick up another car.
“Unlike traditional station-based models where you go out shopping for the day and you’re paying for the car while you’re not using it, while it’s sitting there parked, with the one-way model, you can take a car, drive to where you’re going, end your trip, and not have to pay for a vehicle while you’re doing whatever you’re doing,” says Hetke. “And then grab a different car to drive back home.”
The service is also cheaper than ride-sharing with a service like Lyft or Uber, because you’re doing the driving yourself.
It also has social benefits. A study at the University of California-Berkeley of one-way car-sharing in other cities found that each of the car-share vehicles is responsible for removing anywhere from 7 to 11 other cars from the road as people decide to use the service occasionally instead of buying a car. (In this way, the new service can benefit Bay Area AAA members who do own cars, and who currently suffer through the fourth-worst traffic in the world.) The study found that one-way car-sharing cars can also remove four to seven metric tons of climate pollution in a year. The Gig cars are all hybrid-electric Priuses, likely much more efficient than the cars that they will replace.
Those benefits convinced both the cities of Oakland and Berkeley to agree to let Gig park its first 250 cars on city streets, many of which offer only two-hour parking except for residents with permits. The cities are even including some metered parking spots. The challenge of getting cities on board, Hetke says, is why this type of car-sharing hasn’t existed in the Bay Area in the past.
“You can’t do this on your own,” he says. “It requires participation and partnership with the municipalities to create the super permits that enable this model. And so you have to convince municipalities, and there’s a number of competing factors for municipalities to consider. Quite frankly, we just haven’t had it prioritized in the Bay Area yet.”
In Vancouver, another AAA club, the British Columbian Automobile Association, launched the same type of service in 2016 (it quickly grew from 250 vehicles to over 1,000). Car2Go, a company owned by Daimler, operates a similar one-way car-sharing service in European cities, as well as Brooklyn, Seattle, and a few other American cities, using mostly tiny Smart Cars.
AAA’s Oakland-based innovation lab is also developing new potential services, all aimed at helping improve mobility in the current world and a not-so-distant future filled with self-driving cars. The pilot projects, if successful, will potentially spread to other AAA clubs as well.
“By charter, we’re not a for-profit member service organization,” says Hetke. “We exist to create value for members, we don’t exist to create value for shareholders or make a giant profit. So we should be constantly reinvesting our profits back into new sources of value for our members . . . [Gig] is part of a longer vision of how AAA would be positioning itself to be that consumers’ advocate in consumers making the shift to a world where cars drive themselves.”