making the business case for purchasing, administering and incentivising a private liftshare system

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To make the business case for setting up a car share system it is necessary to look at the likely costs and to set these against the likely benefits. If the benefits outweigh the costs then the case is made.

The likely costs are:

• Purchasing the liftshare system
• Staff time spent marketing and monitoring the system (The liftshare system removes the need to do any matching, as this is automated, provides automated monitoring pages to cut the time needed to a minimum and gives marketing advice to help ensure marketing is done efficiently.)
• Providing incentives to encourage people to join the system and to share a car.
• Providing marketing material to help raise awareness of the system.

The likely savings are:

• Reduces the number of parking spaces required
• Reducing the maintenance cost
• Reducing the cost of leasing the spaces
• Providing the opportunity to build on the land
• Widens recruitment opportunities
• Helps more people to access the site
• Provides an affordable way for staff to access the site
• Reduces congestion on and around the site
• Helping staff to be punctual
• Cuts the cost of business travel as more journeys can be shared.

A company with over 40 parking spaces should have a car share system.

Why?

Feedback from liftshare clients has shown that:

• Administrators typically spend 30 minutes/week looking after their system for every 20 parking spaces their organisation has.
• In this time they are usually able to cut the number of spaces by 5% each year for 4 years. (1 in 20 spaces/year).
• The annual cost of each parking space varies widely from typically £500 to £3000 a year.
• The cost of an administrator is typically £10/hour.

The costs for setting up and licensing a private liftshare system start from £500/year.
The costs of incentivising car sharing vary widely but an average would be £200 per 20 spaces per year. (This includes things like offering guaranteed ride home, reserved parking space, monthly prize draw)
The costs of marketing car sharing should relate to the total number of parking spaces. Marketing material should typically cost no more than £200 per 20 parking spaces.

Number of Parking Spaces	20	40	80	400
Typical cost of each space	£600	£600	£600	£600
Annual Admin Time (hours)	25	50	100	500
Annual Admin Cost	£250	£500	£1,000	£5,000
Annual Software Cost	£500	£500	£500	£1,000
Annual Incentive cost	£200	£400	£800	£4,000
Annual marketing material cost	£200	£400	£800	£4,000
Total Annual cost of system	£1,150	£1,800	£3,100	£14,000
Cost over 4 years	£4,600	£7,200	£12,400	£56,600
Year 1 number of spaces saved	1	2	4	20
Car Park cost saving	£600	£1,200	£2,400	£12,000
Year 2 number of spaces saved	2	4	8	40
Car Park cost saving	£1,200	£2,400	£4,800	£24,000
Year 3 number of spaces saved	3	6	12	60
Car Park cost saving	£1,800	£3,600	£7,200	£36,000
Year 4 number of spaces saved	4	8	16	80
Car Park cost saving	£2,400	£4,800	£9,600	£48,000
Car Park Saving over 4 years	£6,000	£12,000	£24,000	£120,000
Total Saving or Cost over 4 years	£1400	£4,800	£11,600	£63,400

NB 1 The table above only looks at the savings from reducing parking spaces. The other savings such as cutting business travel costs, increasing punctuality and reducing local congestion will simply add to the benefits of setting up a system.

NB 2 The parking costs vary significantly depending upon their location. In some cities parking spaces can cost over £3000 a year so the cost savings may be even more significant in such areas.

To calculate more accurately what you organization can save on parking costs by having a liftshare system please try the ' Business case cost benefit calculator'.

Conclusions:

For companies with < 20 parking spaces

Setting up a private liftshare system will be unlikely to be cost effective. Promoting the free system www.liftshare.com to new staff, on a notice board in your reception and on your intranet, if you have one, would be a good solution.

For companies with 20 - 40 parking spaces

Setting up a private liftshare system may be worthwhile if other factors, such as high business mileage or the desire to reduce the car park size to enable office building expansion are prevalent. If not the 2 best options would be to either promote the free system www.liftshare.com to new staff, on a notice board in your reception and on your intranet, or to join forces with other businesses in your area and collectively set up a private system for all your staff.

For companies with > 40 parking spaces

Setting up a private liftshare system is a good use of resources providing a good return on investment. The role of the administrator should be clearly specified and they should be provided with the necessary support and funding to market, monitor and incentivise the system. A budget of £20/parking space/year should be sufficient.

For companies with > 400 parking spaces

Setting up a more tailored liftshare system will further help improve the effectiveness of marketing efforts and therefore it is worth considering setting up a branded community system. The additional cost, typically £2,000 - £5,000 a year will easily be offset by the additional savings made by speeding up the reduction in spaces from 5% a year to typically 10% a year (saving an extra £12,000 a year using the table above.)

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