PARIS -- PSA Group will be a partner in a ride-sharing service set to begin in April at airports in San Francisco and Los Angeles, taking the first steps toward re-entering the North American market.
TravelCar, a French company that offers peer-to-peer ride-sharing at airports and train stations in Europe, is launching the service after securing an investment of 15 million euros ($15.8 million) from PSA and MAIF, a French insurance company.
Under TravelCar's business model, car owners can receive free parking in return for allowing their vehicle to be rented by travelers, at rates the company says are 50 percent lower than traditional car rentals. It also acts as a broker for reserved parking spaces.
The company, which started in 2012, says it has over 200 agencies in 10 European countries, with 300,000 users. MAIF provides insurance services for TravelCar's owners and renters.
"We announced our progressive entry to North America by launching mobility services with our partners," Gregoire Olivier, PSA's head of mobility services, said in a statement on Wednesday. "With TravelCar today, we are writing the beginning of this new step overseas."
PSA's five-year strategic plan, "Push to Pass," announced last year, outlines a 10-year strategy for re-entering the North American market. Peugeot last sold cars in the United States market in the early 1990s.
"PSA will not become a global company if it doesn't come back to North America," CEO Carlos Tavares said last April in announcing the plan.
Automakers are moving rapidly to diversify their portfolios with car-sharing and other mobility businesses, with companies including Daimler, BMW and Volvo offering an array of options like "free float" sharing in major cities and business-to-business fleet services.
2nd core business
"We have clearly stated that mobility services is a second core business to the company, along with manufacturing, which is a very strong statement," Christian Sere Annichini, PSA's head of global car sharing and connect fleet business unit, said in a joint interview in Paris on Wednesday with Guy Bulaty, the chief operating officer of TravelCar.
Bulaty said the United States market was crucial for TravelCar's global ambitions. "We are going to the U.S. to stay; this is a long-term movement from TravelCar in association with PSA."
He acknowledged that other peer-to-peer car sharing services had failed to live up to their billing, but he said that TravelCar's lean operations model and local partnerships with garages and other service providers would enable it to succeed.
"We analyzed them and we realized the reasons that these services ended up being closed down was not for the market potential," Bulaty said. "Actually, they had a lot of growth, and the reason they didn't work was for internal financial and operating problems."
He said the U.S. market had "solid fundamentals," including the largest car rental market in the world and growth in both air traffic and car rentals.
Lisa Jerram, a principal research analyst for Navigant, based in Washington, said it was not clear that the TravelCar/PSA venture would succeed where others have not.
"The thing about car sharing is that there are so many other models for how you can provide that service that I think have broader appeal," she said. "It's kind of a narrow group that A.) wants to share their car and B.) wants to get access to a car through something that's very ad hoc."
"I still think the preference for consumers is that either they are going to get the cars that are parked around town, like ZipCar and Daimler's Car2Go, and AutoLib, in Paris," she said, or through ride-hailing services like Uber or Lyft.
PSA is already involved in free-float sharing, PSA's Annichini said, citing Moticity, which offers 350 Citroen vehicles in Berlin, and emov, a car-sharing plan in Madrid that was launched in December with 500 vehicles. The company is partners with the French company Bollore in car sharing operations in Lyon and Bordeaux, France, and it has developed an application called Free2Move that lets users gain access to about 20 car sharing services. "Free2Move" will be PSA's mobility brand.
Annichini said he would not reveal any specific metrics for success, but he said PSA was committed to re-entering the North American market. "In the U.S., this is a long term operation, it's not making a quick test of the market," he said. "From the start, it will be a TravelCar venture, and hence branding, but obviously any kind of development is open."
Jerram, the Navigant analyst, said that regardless of its financial success, the partnership with TravelCar could serve PSA's North American ambitions.
Potential customers in the United States "either don't know their name or they possibly have a negative connotation, so I can see the logic in coming in as a cool car-sharing service kind of company," she said. "It's still a little unclear that this particular application does that for you," she said, "but I can see where that would be a way to reintroduce the company in the U.S. in a way that might strike people, particularly a younger demographic that might even know Peugeot at all."