BlueIndy and beyond: The rise and fall of electric car sharing in Indianapolis

It was touted as an eco-friendly, first-of-its-kind way for Indianapolis residents to get around the city. 

But after four years, BlueIndy announced in December it would shut down on May 21, gradually removing cars from its nearly 90 stations until then. The company, owned by French transport company Bolloré Logistics, said in a statement to users that it "did not reach the level of activity required to be economically viable." 

"Indianapolis drivers have been slow to adopt alternative transportation options and car ownership remains extremely high," read a news release sent out at the time of the announcement. 

BlueIndy did not respond to multiple additional requests for comment. 

Indianapolis is indeed heavily car dependent. According to the U.S. Census Bureau,  91.3% of Indianapolis workers commuted by car to work in 2018.

But some BlueIndy users pointed to other issues with the service. 

Mary Beatty, who lives near 40th and Meridian streets, said she and her husband signed up for a membership special a couple years ago. The first time they tried to take a BlueIndy car to the airport, they had trouble opening the rear hatch. She said customer service was unreachable despite calling many times. 

BlueIndy folds:Indianapolis electric car-sharing program to shut down

"There was a pretty big learning curve, even for someone who was motivated," she said. "It just wasn't convenient. You have to want to go to their end point. As someone who was not going to a place on their grid, it just didn't serve me." 

After a handful of trips, Beatty said they just let their membership expire. 

This is what transportation experts across the country say may have gone wrong with electric car-sharing in Indianapolis and beyond. 

The rise and fall of the car share

Car-sharing programs started popping up in North America in 1994, said Susan Shaheen, co-director of the Transportation Sustainability Research Center at the University of California, Berkeley. Shaheen said that by Octob 2016, there were 1.8 million car-sharing members using nearly 27,000 vehicles.

Car-sharing is a short-term car rental system where users pay by the minute, by the hour or both. Some companies offer longer term membership programs. Car-sharing models either require cars to be picked up and dropped off at the same location, or allow drivers to return vehicles to any designated station. 

"Car-sharing can be a popular option for people in urban areas that only require limited access to a vehicle," Shaheen said. "Car-sharing can also become popular among households that require periodic access to an additional vehicle."

BlueIndy's failure isn't surprising in an overall volatile industry that has taken some big hits in the U.S. in recent years. Share Now (previously Car2Go), one of the largest car-sharing programs, announced in December it will exit the North American market by Feb. 29. Other programs headed by companies including GM, Enterprise, BMW and Hertz have all either folded or exited some major cities. All pointed to lackluster consumer demand as the driving force behind the closures. 

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ZipCar remains the dominant car-sharing company in the U.S. Owned by Avis Budget Group and founded in Cambridge, Mass. in 2000, it still operates in more than 500 cities and towns, and 600 college campuses across the country, including IUPUI, Indiana University, Purdue University and University of Notre Dame. 

BlueLA, a sister operation to BlueIndy, is still running in Los Angeles, and GIG Car Share, run by AAA Northern California that uses electric Chevy Bolt cars, just launched in Sacramento. 

The cost

J.R. DeShazo, director of the University of California, Los Angeles Luskin Center of Innovation, said one problem could have been that "traditional rental car companies have become cost competitive," and it might not have made sense for people to use BlueIndy versus renting a car from Enterprise or Hertz.

BlueIndy's payment structure was based on time instead of mileage, which seemed to encourage shorter trips. Daily use was free to sign up, then $8 for 20 minutes and 40 cents for each additional minute. Weekly and monthly options imposed an additional flat fee, but lowered the per-minute cost. 

So if someone who is car-less lives downtown and wanted to run errands in Castleton, it would take about an hour round-trip with no traffic. Spend an additional hour or two at Trader Joe's or Nordstrom Rack, and it could cost anywhere from $48 to $72. 

The competition

Another major factor is the growth in mobility options in recent years, which has led some car-sharing companies to struggle for trips, said DeShazo. Ride-sharing such as Uber and Lyft is generally a more expensive option, but "they pick you up and take you anywhere," DeShazo said. Peer-to-peer car-sharing companies including Turo, as well as bike-share and scooter-share systems, also offer that flexibility. 

DeShazo said that car-sharing has "not expanded rapidly" compared to options that have emerged in the past five years that have "extremely high rates of growth." He added that car-sharing companies need to own and maintain a fleet of vehicles, whereas Uber and Lyft employ independent contractors who drive their own cars. 

James Briggs:RIP BlueIndy, a great concept that was too clunky to work

Steiner said the introduction of a service such as BlueIndy was unfortunate timing, "when the convenience of Uber and Lyft is changing the dynamics of car-less living, or living in an urban environment."

While ride-sharing has hurt a number of car-sharing companies, ZipCar president Tracey Zhen said she doesn't see Uber and Lyft as competition for ZipCar, because they are generally used for "very short trips," such as back and forth from a restaurant or bar for the evening. She said ZipCar's average trip length is 47 miles, used for "purpose-driven trips" such as getaways outside of the city or college students returning home for the weekend. She still sees the personal car as the biggest competition to ZipCar.

Density and distance

Another factor may have been density. According to the 2010 census, Indianapolis' population per square mile is 2,270. Compare that to San Francisco, which has a similar population size but a density of 17,179 people per square mile. 

Ruth Steiner, professor in the urban and regional planning department at the University of Florida, said if overall density is too low, then it's a challenge to "really support functional transit systems except to the nodes of dense activity." 

The first mile/last mile problem could have turned some people off from trying BlueIndy, Steiner explained. If you don't live or work right by a station, you'll need to find a way to get to one or to your final destination. This can be solved by walking, or through a car, ride, bike or scooter-sharing service. 

"People want convenience," she said. "Density is a big factor in walking. Walking is one of the most sensitive of all the modes. If you can’t cross the street, or have to walk a long distance, you're not going to do it."

These are drawbacks for most static transportation options such as bus or light rail. 

In the transportation industry, most experts say that people are willing to walk a quarter to half a mile to their destination, but it really depends on the location, Steiner said.

While BlueIndy positioned most of its cars in dense areas, such as downtown, traveling to other locations in the city could have proven a challenge. 

ZipCar's presence in Indiana is limited to college campuses, which tend to be dense. Zhen said the key is evaluating what the needs are in a city, generally "driven by congestion" and areas with high density.

"Most of our success has been in urban cities, and certain campuses behave like cities," Zhen said. "The cost of owning a car and the hassle of owning a car is very high ... The more options urbanities have for mobility, the better it is for city." 

Where to charge, where to park

Shaheen said electric vehicle car-sharing has faced issues as a whole due to limitations on charging infrastructure and long charging times. Electric vehicles are out of commission while charging; companies using gas-powered vehicles don't have this issue.

ZipCar vehicles are gas-powered, but Zhen said they have been testing electric vehicles in California and have more than 300 being used in London. Still, they are being cautious. 

"We hope the future is electric," she said. "But we need the infrastructure to be ready for our members." 

The rigidity of BlueIndy could also have been a turn off. While BlueIndy users could park legally in any spot, usage fees continued until the vehicle is returned to a station and plugged into a charging port. Steiner said this likely added limitations for some users or could-be users who didn't want to have to park their vehicles in those specific spots.

Users were limited to where BlueIndy's stations in the central core of the city. Stations are situated as far north as Broad Ripple, down to University Heights, west to the airport and east to Warren Park. But the concentration was in the immediate downtown Indianapolis area. 

"There is a lot to get right in this business," Zhen said. "Obviously you have to have a good brand, and know how to manage a fleet ... It's quite difficult to know how to manage a capital intensive investment. Each city is very unique, and being able to scale and do that is not easy." 

Contact IndyStar reporter Kellie Hwang at 317-444-6032 or kellie.hwang@indystar.com. Follow her on Twitter: @KellieHwang.