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New Bottom Line Volume 5.25 – Doing more with less: What your next car will learn from a luggage cart

December 3, 1996

One of today’s trendy ecobusiness buzzwords is “Products of Service”– an element in Michael Braungart and Justus Englefried’s “intelligent product system” (see NBL 3.4, “Price and Cost: The Next Environmental Frontier”). As Paul Hawken explained in The Ecology of Commerce, “What we want from these products is not ownership per se, but the service the product provides: transportation from our car, cold beer from the refrigerator, news or entertainment from our television.” Braungart and Englefried propose that Products of Service be leased, not sold, with the manufacturer maintaining responsibility for end of life demanufacturing and recycling.

Whether driven by the threat of product “take back” legislation or internal assessment of strategic opportunity, companies in industries ranging from electronics to floor covering are grappling with the challenge of “negastuff” — products and business models that profit by selling use instead of artifacts.

Yet one of the most impressive, if unheralded, experiments in designing a business to do more with less took place in Amsterdam more than 20 years ago–in, of all things, the transportation business.

Think about cities. Some estimates put 25% of urban land area devoted to servicing the automobile–roads, parking, etc. Other estimates put a similar percentage of personal incomes in the same category. In fact in a provocative thought experiment in _Energy and Equity_ decades ago, Ivan Illich compared typical automobile speeds in cities–25 mph–with the amount of time people spent earning “car support” money–5 hours work for every hour of car time –and concluded the our effective driving speed is only about 5 mph…not much faster than a healthy person can walk! Except the things you want in many cities are too far away to walk, because the city has become dependent on the automobile.

It’s a massively inefficient system in many ways (without even considering environmental impact). Buckminster Fuller once likened the two million automobiles idling at US stop lights at any average moment to “200 million horses jumping up and down, going nowhere”; the figure is doubtless higher today. From a business perspective this is rotten capacity utilization; we’ve got alot of capital tied up in unproductive patterns of use–massive traffic jams getting into cities during rush hour, and then thousands of those 2 ton chunks of steel sit idly all day taking up space, producing no value.

I’ve considered the experiment in personal terms: what would it take to give up my car? When I weigh the cost of renting a car for weekend jaunts, for mid-week, mid-range business trips, etc., compared with the costs of owning my own, it’s hard to justify ownership from a financial point of view. Now convenience…there’s the rub.

But what could be more convenient for in-city travel than a personal electric vehicle, available where and when you need it for rental by the hour–or even by the minute? That service existed in Amsterdam some 25 years ago, and strikes me as a viable business waiting to happen today.

The Witkar electric car “utility” –heir to the anticommercial Provo’s free “white bicycles” program in the 1960s (hence the name white car)–enabled subscribers to rent cars by the minute, picking them up and returning them to strategically located automated charging stations like airport luggage cart racks. As I wrote in “The End of Ownership?” (NBL 3.11, June 12, 1994): “the subscriber paid for only the amount of transportation he or she needed (and paid nothing for parking), the company got high effective use from its vehicles, and the downtown area benefited from reduced congestion and pollution.”

If anything this service should be easier to provide today, with credit/debit/smart cards and microprocessors commonplace, electric cars coming on to the scene, and hybrid vehicles not far behind. The biggest design challenge will likely be working out the appropriate density and load factors for an untested business model. And then of course there’s the challenge of marketing such a radical change of habit. And no doubt there may be some legal concerns in this most litigious society.

But as soon as someone is able deliver the concept in a customer-convenient and financially viable form, then what’s good for Witkar might be good for the US. (And how much more important in developing countries, where grass-is-greener techlust threatens to overwhelm traditional culture and economies, except in distinctively sensible exceptions like Curatiba, Brazil.)

So if this is such a great idea, why has no one done it since? I don’t know–but I’m game. Call me!

(c) 1996 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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