50 DOT Fleet Vehicles Replaced By 25 Zipcars

Mayor Bloomberg announces the city's car-sharing program, along with Zipcar president Mark Norman, Deputy Mayor Stephen Goldsmith, and DOT Commissioner Janette Sadik-Khan. Photo: Noah Kazis.
Mayor Bloomberg announces the city's car-sharing program, along with Zipcar president Mark Norman, Deputy Mayor Stephen Goldsmith, and DOT Commissioner Janette Sadik-Khan. Photo: Noah Kazis

The Department of Transportation will soon be using Zipcars instead of city-owned vehicles, Mayor Bloomberg, Deputy Mayor Stephen Goldsmith and Transportation Commissioner Janette Sadik-Khan announced at a press conference yesterday. The initiative is intended to reduce unnecessary driving by DOT employees and could yield significant savings if expanded to the city’s entire passenger vehicle fleet. Symbolically, the city is also sending a message that owning a car might not be a wise financial decision.

Three hundred DOT employees will share 25 Zipcars during the workweek, which they’ll reserve online. Those 25 vehicles will replace 50 that had been owned by the department. At night and on the weekends, regular Zipcar members will have access to the vehicles, which will be stored in private garages in Lower Manhattan.

The car-sharing idea has been in the works for a while now. DOT put it out for competitive bidding a year ago and the plan made it into Goldsmith’s cost-cutting program in July. Now it’s ready to go.

At yesterday’s announcement, a lot of attention went to the savings and efficiency gains that car-sharing could bring. The city’s fleet is currently “a patchwork of standard operating procedures and tracking mechanisms, some of which are still paper-based,” said Bloomberg. This DOT pilot, he said, would save the City $500,000 over four years, and could be scaled up to the entire passenger vehicle portion of the city’s 26,000 vehicles.

Cities like Washington, D.C. and Philadelphia have reaped big savings by contracting with car-sharing companies for their fleets.

Bloomberg also promised that switching to car-sharing will “reduce the congestion on our streets and the pollution in our air.” That may be the case with consumer car-sharing, which leads people to weigh the price of each car trip against other options, but it’s not quite clear whether switching to Zipcar will help DOT reduce the amount employees drive, since the agency is paying a fixed amount already.

Bloomberg said the main effect would be to discourage employees from commuting with agency vehicles — an improper use of city cars. Restrictions on when city workers can use the shared cars will keep most of them off the streets during peak commute hours. The mayor also hypothesized that having to walk to a public garage might be a disincentive to take unnecessary trips.

We’ll know the effect soon enough. Sadik-Khan said that GPS would be installed in the city’s Zipcars and used to measure whether the program is actually reducing driving. Bloomberg suggested that DOT also use the GPS data to find driving trips that could be done on transit. “If it turns out the subway is better, or the new M15 bus,” he argued, “maybe that’s the way to go.”

  • TKO

    Why privatize? So private corporations can take te public money? Seems short sighted. Not surprising when people think that a business man knows more then others on how to run things. Just look at charter schools.

    A sad state of affairs.

  • 25 cars down, 1,900,000 to go. Way to go, Mr. Mayor.

  • TKO, I don’t know the net figures so I can’t be sure you’re wrong, but the city wasn’t exactly manufacturing its own cars before this; it was buying them from Toyota and other automakers. Now the money’s going to Zipcar instead of Toyota. At a glance, to me this doesn’t seem much worse.

    I also like that this is starting with one of the agencies whose boss the haters like to portray as a co-conspirator with an authoritarian mayor. That this change is being “imposed upon” this particular agency takes some ammo away from those haters. And also because of that perceived closeness of the two bosses, this is leading by example.

  • fdr

    ddartley: wouldn’t “the haters” describe how most people on this blog felt about Iris Weinshall? Of course that was justified because you didn’t like her policies.

  • Fair, fdr; it was hasty, blog comment speak. (Just like your use of the word “you.”) Feel free to replace “haters” with “people.”

  • J:Lai

    If only this could be implemented for NYPD!
    Also, it would be better if it was pay for actual usage by the hour, as opposed to fixed fee, but still a good start.

  • Scottilla

    Thank you TKO. Can I be your fan? For public services like roads, airports, transport, parking meters, medical costs, education, postal service, pensions, I agree with you 100% and have been saying the same thing for years. How do these companies make money? By raising prices of course. If the services are priced too low, then of course they should be raised. That does not mean that we should have a layer of profit added when we can keep it ourselves. However, I think this Zipcar idea is worth a try, because the city owned cars in question are not used full time, so maybe the layer of profit is less than the cost of keeping the cars idle half the time, and the city and the private company can share the savings. A 50 car experiment couldn’t hurt, too much.

  • Yeah, I do strongly agree with TKO’s overall sentiment; I just had those two cents above to defend this particular policy with.

  • Doug

    Scottilla has good points. The question comes down to two things: scale/utilization of the goods being privatized, and quality of service. The public sector tries to maximize service subject to maximum cost constraints, whereas the private sector minimizes cost subject to minimum service constraints.

    Therefore, if you have an essential service which has attained enough scale to have an economy of scale, privatization should yield no benefits in either cost or service (cost will naturally go up, because they take what you’re doing and tack on a profit margin). If you have something like cars used by a department which have low utilization and high maintenance costs, privatization makes sense because that private operator can give you better scale, which outweighs the profit margin they’re taking.

    Most of the time privatization gets good cost savings because it’s really just a union-busting technique: fire workers who cost $50-100/hour (with their benefits) and hire people at half the cost and less job security and rights.

  • vnm

    This is a fantastic initiative. First, anything that reduces the number of placard-abusing City employees inappropriately taking cars home with them and parking overnight in crosswalks, at hydrants, etc. in my neighborhood is a great thing. That, in and of itself, is reason enough for me to support this. Second, it reduces the amount of land that must be wasted on parking lots and garages dedicated to city fleets. Third, it saves taxpayer money. TKO’s objection seems off the mark to me. A private company is helping the government reduce its expenses, and quite possibly reduce the expenses it specifically pays to other private companies.

  • Theoretically, Zipcar is going to make some money providing this service beyond what it costs them to buy and maintain the vehicles as well as support the required infrastructure. But if DOT had to set up a vehicle sharing service, complete with smartcard access, computerized records, GPS and new vehicles, I think it would take the city a very long time to realize any savings. As I recall, Zipcar didn’t turn a profit for a while because the scale of the enterprise was just too small at first. If the city is going to go with 15,000 vehicles, it might make sense to negotiate with Zipcar or start their own service. Moreover, nobody seems to be alleging that DOT is overpaying for their car share time or that Zipcar is making some kind of unreasonable profit on their service.

    As an aside, even a public car sharing program would inevitably lead to the hiring of consultants or other private sector employees whose knowledge of this type of program vastly exceed the in house resources at DOT. Some of those people might become public employees, but some might not.

  • Pete

    Seems like a great idea! The city doesn’t need these cars on a 24×7 basis, private citizens can rent them in off-hours, and it’s money the city doesn’t need to sink into horrifically depreciating assets that require significant amounts of maintenance to keep running.

    Hopefully this is a big success, and the city can offload more of their own cars in this fashion.

  • MyrtleGuy

    Good news! Great way to get lazy bureaucrats out of vehicles that are under priced. Let’s hope that other City Agencies get on board to quickly follow DOT’s lead.

  • Ian Turner

    MyrtleGuy: Don’t be too quick to blame “lazy bureaucrats”. I knew a guy at DOT that needed a car from time to time, but they told him the only way was to assign him one full-time. So he took the full-time car, which proceeded to sit idle most of the time.

  • JK

    Re: Privatization, keep in mind that NYC, and all US governments, spend a huge share of its operating budget (and all of its capital budget) purchasing things and services from the businesses. DOT doesn’t build bridges, private companies do. DOT doesn’t own the building it’s in, a real estate company does etc. If DOT does a bike share, it will be operated by a private company or possibly a non-profit. So, renting car-time from a private company is very consistent with how DOT and NYC already work. The example of Zipcar is apples and oranges with privatizations like Chicago parking meters or private toll roads.

  • J:Lai

    JK – excellent point, concisely made.

    Privatization is the conversion of a public resource to a private one, such as when state assets are sold to private corporations or individuals.

    Buying goods and services from non-state enterprises is not privatization, it is just the way a capitalist economy functions. If the state provides provides all goods and services, this is a command-control economy of which communism is the most famous example.

  • ObvUsername

    Brilliant move on ZipCar’s part as well. I’m sure this will serve as a pilot program for transitioning public vehicle fleets to car sharing. My guess is that cost of ownership is covered completely by the deal with NYC and the night and weekend public rentals are pure revenue for ZipCar.

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