Ultra-Orthodox Zooming Ahead of Secular Israelis With Car-sharing Service

A 10-shekel-a-month membership enables City Car firm, launched in 2013, to draw some 19,000 users a month in seven Haredi cities.

A station operated by the City Car company for short-term, shared-vehicle rental, aimed particularly at Israel's ultra-Orthodox population.
Courtesy City Car

The Tel Aviv-Jaffa Municipality is preparing to launch an ambitious car-sharing project called Autotel by year's end, but the country's ultra-Orthodox community is one step ahead: It has enjoyed such a service, called City Car, for four years and currently boasts some 10,200 subscribers – a similar amount to what the seaside city is aiming for.

Ultra-Orthodox families in Israel often have many children and no car, so the community is fertile ground for short-term car rentals. City Car operates in seven predominantly Haredi cities: Bnei Brak, Jerusalem, Beit Shemesh, Ashdod, Elad, Betar Ilit and Modi’in Ilit.

The company’s fleet currently numbers 310 vehicles; dozens of cars were added in just the last month to meet the demands of the Haredi community. Still, City Car is unknown to most Israelis.

City Car members pay a monthly fee of 10 shekels (about $2.60) for the service, and can pick up their car from any station around the cities where the company operates. Bnei Brak allows members to park their cars for free in all blue-and-white public parking zones, despite the city’s parking shortage. Jerusalem has no such arrangement, but City Car is due to compete in a tender that will allow it to have designated parking spaces. In other locales, like Betar Ilit and Modi’in Ilit, parking is free for all cars.

City Car usage reached 19,000 a month during the final quarter of 2016 – that is, an average of more than 700 trips a day. Individual rentals cost 5-19 shekels an hour, depending on the time of day, plus 1.60 shekels per kilometer travelled. The price includes gas and insurance; the insurance policy is identical to that used by the major car rental companies.

So far, users have had to return their cars to the same station from which they picked them up, but the company policy will change in the next two months or so to allow a renter to bring the car back to any of the cities in which City Car operates. There are plans for renters in Jerusalem to be able to return their car to any station in the city.

Tel Aviv mayor Ron Huldai unveils the city's new Tel-Auto car rental service on Monday, January 16, 2017.
Ofer Vaknin

City Car says it has developed software over the past three years to make its service more efficient. By April it is due to launch an application that will allow its members to pick up and return cars without any assistance from company representatives – although some 70 to 80 percent of the members own so-called kosher phones designed for Haredim that do not allow apps to be downloaded. In any event, with the new software, drivers will be able to locate the nearest available car and to release it via smartphone. Currently, the rental process must be approved via phone by the staff at service centers.

City Car officials say the company invests mainly in technology development, which is more expensive than acquiring the vehicles and operating those centers.

The owners of the company, Meir Rotem and Arye Blumenthal, who are both Haredim, hope to sell the management software they have developed to other short-term car rental concerns abroad.

“The idea started when I drove a shared car in Europe. I told myself that this is a model that will fly with the Haredi community,” said Rotem. “The first years were very difficult. Members of the community are suspicious and less open to technological innovations. It took time and a lot of explaining until we took off.”

Rotem describes the Tel Aviv car-sharing venture as “amazing,” adding that he ran into many obstacles with municipalities and local authorities.

“It’s good that Tel Aviv Mayor Ron Huldai is pressuring the nearby cities to join the venture,” he explained. “No one can foresee the future, but I believe they will succeed because the public in Tel Aviv is very open to change and innovation. The more such initiatives develop, the more people will understand my product, and they won’t view us as a strange bird.”

Rotem said that City Car's initial investment was enormous – especially due to the software and the vehicles.

“These [initial] years are dedicated to educating the market and instilling the concept of a shared car as an optimal mode of transportation,” he stressed.

“The rate of membership growth indicates that the business potential matches the rate of growth of serious companies in the realm of car-sharing," Rotem noted, "and therefore profitability will prove itself. Substantial investment in the venture is done with an eye to a growing membership.”