There’s a mantra posted at Hourcar’s St. Paul headquarters: “We live here. We know when it’s snowing.”
That intensely local focus has helped Hourcar emerge as a dominant force in the Twin Cities’ car-sharing market. Now, the nonprofit organization is embracing a future fleet of all-electric vehicles and a network of metro-area charging stations in a partnership with utility company Xcel Energy.
“This is a game changer for Hourcar and for the Twin Cities,” said Paul Schroeder, Hourcar’s executive director. By reducing vehicle emissions and congestion, “this is a real win for our community.”
The push toward electricity, pending a decision on a federal grant, comes as residents of Minneapolis and St. Paul have seen their mobility options rapidly evolve to include dockless bikes and scooters in addition to car sharing, ride sharing and public transportation.
“There’s definitely a shift away from car ownership,” Schroeder said.
Unlike ride-sharing firms Uber and Lyft, where customers are driven to their destinations, car-sharing involves patrons driving themselves to wherever they need to go. Hourcar’s model — for now — involves customers picking up a vehicle at one of its 50 hubs in Minneapolis and St. Paul and returning it to the same place.
“It’s super convenient,” said Nathan Bakken, a North Loop resident who doesn’t have or want a car. A few times a month, Bakken will rent an Hourcar at a hub three blocks from his apartment and drive to places like a Hy-Vee grocery store in the suburbs or Ikea in Bloomington.
Bakken was a fan of Car2Go, a division of German auto giant Daimler North America, where users locate a car on a smartphone app and then drop it off wherever they end up. But Car2Go pulled up stakes here in 2016, saying taxes were too high. Beyond Hourcar, the remaining car-sharing firm in the Twin Cities is Zipcar, which is owned by car-rental firm Avis Budget Group Inc.
Long popular in Europe, car-sharing’s market is expected to top $11 billion by 2024, according to Global Market Insights, a Delaware-based research firm. This is largely due to high costs of car ownership, rising traffic congestion and widespread smartphone technology that provides access to car-sharing services.
Hourcar, which relaunched recently as an independent nonprofit, now serves only the Minneapolis and St. Paul markets — and not the metro’s sprawling suburbs.
Frank Douma, director of the State and Local Policy Program at the University of Minnesota’s Humphrey School of Public Affairs, said car-sharing “only works in certain places. We don’t have the density of Boston or [Washington, D.C.] or San Francisco.”
Beyond serving its existing 2,200 members, Hourcar is adding hubs and has introduced a new service that permits customers to take a car home overnight.
“So if you work late, you have options to get home,” Schroeder said.
Push for all-electric
And, there’s the ambitious electrification plan. Earlier this year, the city of St. Paul partnered with Hourcar and Xcel Energy to apply for a $6.7 million federal grant to launch a fleet of 150 battery-powered electric vehicles, supported by 70 charging hubs. The service, to which Xcel would contribute $4 million, is intended for both one-way and two-way trips throughout the metro.
If the grant is approved, the electric vehicle service could be available as early as 2020.
In a recent filing with the Minnesota Public Utilities Commission, Xcel pitched a variety of programs worth $25 million intended to support the growth of electric vehicles in Minnesota. Part of the plan calls for Hourcar to serve as the anchor tenant for the 70 community charging stations in Minneapolis and St. Paul. (The stations could also charge scooters and electric bikes.)
“It’s really important to provide the electrical infrastructure that our communities need, and to make sure it benefits everybody,” said Xcel’s Electric Vehicle Program Lead Kevin Schwain.
Having that infrastructure is critical to wider acceptance of electric vehicles, said Douma, who also serves as a research scholar at the U’s Center for Transportation Studies.
“Hourcar’s opportunity for partnering with Xcel means they can create a network or infrastructure so users will feel comfortable that they can get to where they want to go,” he said.