IoT Blog

Free Floating vs. Stationary vs. P2P: Car-sharing Technology Providers Open the Door to New Options


Benoit Tournier

Benoit Tournier

Director of Marketing, Transportation & IoT Solutions

With new advances in tracking technology, car-sharing providers now have several different business models to choose from. With so many options available, today’s car-share business owners are under pressure to make the perfect choice. This can be a confusing and overwhelming process, especially if you’re unfamiliar with the latest tracking technology. The car-share model that you choose must be reliable, energy-efficient, easy to deploy, and must also fit within your company’s operating budget. Before committing to a new technology, it’s important to consider the pros and cons of free floating, stationary and peer-to-peer (P2P) car-share models at the very start of the process. All three business models will offer you a competitive edge in the modern car-share market, but only one model will be the right choice for your company.

Stationary Models Are Part of the Old Guard

In the past, a stationary model was the only option available to car-sharing technology providers. This is a business model that you’ve likely already used as a customer at least once. In a stationary model, the prospective renter (customer) would pick up the vehicle from a fixed rental station. After signing paperwork or using a mobile application to pay for the rental, the renter is free to drive the car wherever they wish. The lease is terminated only after the car is returned to an established rental station.

As you can imagine, this model isn’t very flexible for car-sharing companies or customers. The renter really only has a choice between a round trip (picking the car up at Station A and returning it to Station A), or a tightly-monitored one-way trip (picking the car up at Station A and returning it to Station B). The benefit of using a stationary model is that this is still one of the most reliable ways to track vehicles in your fleet without the use of complex tracking systems. You don’t have to use the latest car tracking technology to know, for instance, that vehicle A is parked at Station C—you know exactly where unused vehicles are parked. If your fleet consists of electric cars, you can also easily recharge these vehicles in your parking stations, knowing that a recharge station will be readily available.

Although the stationary model is reliable and simple, it can also be more expensive to operate. Parking lots, building infrastructure, vehicles and location management staff can add significantly to your overhead costs. What’s more, if you live in a crowded city, you may not find adequate lot space for all of your vehicles and, as a result, you may have to downsize your fleet.

Stationary systems are also very closed-off and inflexible. Users can’t just drop off the vehicle at a location that’s most convenient for them; they need to find a parking space available at the fixed station. While you can offer your customers the option to book a space 30 minutes in advance to ensure parking availability, this still requires some planning and forethought. Still, you may decide that the reliability of this option is worth the extra cost of operation and loss of flexibility—this is a delicate balance that you’ll need to carefully consider.

Peer-to-Peer Models Offer More Flexibility

If the stationary model doesn’t fit within your budget, or you live in a city where parking is scarce, you may decide to go with a peer-to-peer (P2P) model instead. Unlike a stationary model, in a P2P model, you don’t control a specific drop-off location or station. Your fleet usually consists of private car owners who are willing to rent out their vehicles when they’re not in use. This means that you don’t necessarily have to buy or maintain your own fleet. Today’s car-sharing technology providers can install a tracking device in each car, and this device communicates directly with the platform. To connect any vehicle to the network, all you need is the owner’s permission and a short installation session (which usually takes less than an hour).

Once the car is connected to the network, a user can see which cars are currently available on a mobile app. They can pick the car up from the private owner’s driveway and submit their payment via the app. After the payment is accepted, the renter can use the car for a set period of time, then return it to the owner’s driveway or other specified location. In this model, the car’s owners take a portion of the profits.

P2P models have lower CAPEX and OPEX, as you don’t have to own, build, or operate a car station. Nor do you have to maintain or buy a car fleet of your own. Since you have fewer assets to manage and no infrastructure to setup, you can deploy your system more quickly and see ROI sooner. Additionally, you can help manage the maximum variety of vehicles for a one-way trip (unlike the stationary model where service providers buy a specific model for the whole fleet), under a maximum variety of geographic areas (e.g. private households provide a wide range of pick up points). Finally, by focusing on the tracking technology, you ensure that private owners can trust that their vehicles will be returned safely once the rental timeframe concludes.

While this model offers both flexibility and lower costs, it may not be right for your company if you lack the ability to set up an effective tracking system first. Thankfully, today’s technology is easy to install, and it enables you to connect cars anywhere at any time. Choosing a P2P model does require you to think about building a tracking protocol in advance. In addition, you have to install a black box into the car itself, which means that you need to require a minimum engagement period in order to write off these installation costs. Overall, a P2P model is highly efficient.

Free-Floating Models Give Car-sharing Technology Providers the Most Flexibility

Perhaps the greatest advance in car-sharing technology is the introduction of free-floating models. Like a P2P system, a free-floating model primarily uses the latest tracking technology to provide their customers with more flexibility. However, a free-floating model goes one step further. A renter can see which cars are available on a mobile app and choose the one closest to them. Once the renter is finished using the car, they can drop off the car at any location, not just a public station or the owner’s driveway. Essentially, users can pick up and drop off any car anywhere in the city, saving time and avoiding unnecessary trips.

The free-floating model offers customers the maximum flexibility for a one-way trip—if they pick the car up in the northwest part of the city, they can choose to leave the car in a southeast neighborhood without worrying about returning it.

For your company, a free-floating model will also give you a number of benefits that a stationary model cannot. You don’t have to build any infrastructure or maintain parking spaces, making this model a better choice for companies that are based in dense urban areas. Your company can use whatever existing free spaces the city already has available, at no additional cost. This model is fast and easy to deploy, since you don’t rely on infrastructure construction times. By using the latest tracking technology, including dead reckoning and reliable black boxes, you can locate any car within your designated area, no matter where it’s parked. This ensures that all of your vehicles are accounted for and you minimize chances of theft.

While a free-floating system could be the future of car-sharing models, it’s more complex in its use of technology compared to a stationary system. You have to know exactly where your cars are parked at all times, including in urban canyons, where connections aren’t as reliable. You also need to be able to connect to the car anywhere and at any time. Without a connection, the car won’t receive new booking messages, meaning that the doors won’t open for customers, and the engine could be deactivated. For an effective free-floating model, you need efficient, low-powered trackers that can retain a reliable, unbroken connection and continue to work, even if the car has been parked for a few days without a battery recharge.

The Best Model for Your Company

Generally, if you’re willing to put some effort and thought into a tracking system, a P2P or free-floating model will be better choices for your company than a stationary model. These models offer a competitive edge because they are more convenient for customers and decrease overhead costs.

If you want to get started on your own P2P or free-floating system, Start with Sierra today. Our expert staff can walk you through the complex tracking system process, making it far simpler for your company to deploy your own system quickly. Our goal is to provide only the most reliable tracking systems to the companies we work with, ensuring that their customers are satisfied and, that every vehicle returns to the fleet safely.

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