Tel Aviv Gears Up for Hourly Car Rental

City council votes to allocate 100 million shekels to the project; service would cost 30-40 percent less than a taxi.

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The private hourly car rental service Car2Go.
The private hourly car rental service Car2Go.Credit: Omer Levi
Oren Dori
Omri Zerachovitz

Tel Aviv is moving ahead with plans for its own car- sharing service, city officials said this week.

On Monday the city council voted to allocate 100 million shekels ($26 million).

The city is working in partnership with the private hourly car rental service Car2Go, although they have not yet signed a contract.

The plan is to launch the service by the second half of 2017, with 260 small cars.

Car2Go has 200 vehicles in Tel Aviv, scattered around the city. Members pay an annual fee for the smart card that opens the vehicle, in addition to the hourly or daily rate and mileage.

Reservations can be made at any time online, for a vehicle that may be closer to their home than the nearest available street parking. After use, the member returns the car to its parking space.

The municipal fleet would improve upon Car2Go’s service by offering around 520 reserved parking spots around the city. In addition, vehicles could be parked in and picked up from any legal onstreet parking space in the city.

The reserved spots are likely to be created at the expense of current parking spaces. City officials said that placing the program’s cars in parking lots was a less convenient option for many potential user of the service.

While the price of the service will be set closer to its launch date, the idea is for the rentals cost 30% to 40% less than taking a taxi for the same purpose.

The hope is that many city residents will opt to forgo car ownership in favor of the sharing program.

Initially, it seeks to appeal to residents who get around by taxi. The shared cars can be used for trips outside the city, and in the future the program might be expanded to include more of the greater Tel Aviv metropolitan area.

Car2Go already has an agreement with Tel Aviv suburb Ramat Gan, and it is in negotiations with the northern city of Haifa.

Car2Go, which is part of the Shagrir Group, published details of its operations two weeks ago, ahead of a planned IPO by the Shagrir Group, which owns 61% of the rental company. Car2Go had 8,000 members as of the end of 2015, and its 200 cars were rented some 84,000 times that year, a 8.5% increase versus 2014.

The company’s revenues were 15 million shekels, up 11% from 2014, as a result of increased usage.

The company reported an operating loss of 100,000 shekels, down from an operating loss of 3.6 million shekels in the parallel.

Most Car2Go users are between the ages of 24 and 45.

“Israel’s public transportation needs urgent, immediate improvement. We are continuing to work via the means at our disposal to advance the project, which the state should seek to lead on a national level,” Tel Aviv Mayor Ron Huldai said.

Huldai added that he hoped the program would contribute to the reduction of the use of private cars.

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