4 jan 17

Mobility solutions fail to move forward

Start-up car pooling and car sharing companies are failing to make profits in Turkey, but ZipcarÂ’s launch in Istanbul might start to make a difference.

Corporate mobility solutions are barely a twinkle in the eye of Turkey’s fledgling fleet market. With full service leasing still considered a novel concept, the prospect of car sharing, car pooling, and even integrated transport alternatives to the company car are few and far between.
The question facing suppliers is whether corporate clients will make the leap directly to mobility solutions, rather than follow the chronology of western European countries. In mature fleet markets, the outright purchase of vehicles was gradually overtaken by leasing, which in turn evolved into today’s different concepts of mobility. Do fleet customers need years of experience of leasing in order to overcome the established philosophy of owning vehicles, or can they leapfrog straight from outright purchase to mobility solutions?
Turkey may be a relatively new fleet market, but the country is facing many of the same difficulties as other European countries in terms of the rapid growth of road traffic.
“Mega-urbanization, intensive traffic jam, increasing travel needs are now pushing the operational leasing companies to act as the mobility partner of their customers,” said Tolga ÖZGÜL, General Coordinator at Tokkder, the Vehicle Rental and Leasing Association of Turkey.
The country’s largest operational leasing company, DRD Fleet Leasing, which runs 30,000 vehicles, suspects that demand is not yet sufficient to support alternative transport solutions to the traditional company car.
“In Turkey, mobility solutions for the fleet market are not asked for in the same way as the European market,” said Levent Gençağa, Marketing & Corporate Communications Manager at DRD Fleet Leasing. “Although many start-ups achieve short-term success with car sharing solutions, they fail to survive.”

As a result, a handful of these start-up companies have established partnerships with larger leasing companies, or been acquired by them. And until innovative mobility providers start to be profitable, larger fleet suppliers are unlikely to invest in this type of product and service.
Ayça Albayrak Sezgin, Corporate Brand Management Supervisor  at Garanti Fleet, which runs a leasing fleet of 15,825 vehicles, said, “New mobility solutions like car sharing have not proven themselves in terms of profitability.”
She added, quite reasonably, that these types of solution are still only really in their test phase in mature, developed markets.
“That’s the reason why we are not focusing on different mobility solutions in the short term,” she said.

But some suppliers are starting to lay the foundations for an alternative mobility future.
Turkay Oktay, Managing Director at LeasePlan Turkey said, “We are in discussions with some transport providers to bundle our services with theirs, but nothing has been concluded yet, [and] we do not see any mobility services demand from customers.”
The first Turkish company to make a significant move into mobility solutions is Otokoç Otomotiv, which runs 33 car dealerships, as well as 84 Avis and 47 Budget offices. Its experience in the rental sector has led it to become a licensee of Zipcar, one of the world's leading car sharing networks, in Istanbul.
Inan Ekici, Deputy General Manager, Otokoç, said: “Zipcar in Istanbul represents an exciting opportunity for us to meet the needs of the city dweller by providing a convenient and flexible mobility solution that saves money, reduces hassle and improves urban living. As a destination for both tourism and business, Istanbul is increasingly popular, and we look forward to providing Zipcar’s existing member base with access to Zipcars when they travel to the city.”

Authored by: Jonathan Manning