2008-26957 Resolution RESOLUTION NO. 2008-26957
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE CITY MANAGER,
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 42-07/089 FOR A
CONCESSION AGREEMENT OF A SHARED-CAR PROGRAM FOR RESIDENTS AND
VISITORS OF THE CITY OF MIAMI BEACH; AUTHORIZING THE ADMINISTRATION TO
ENTER INTO NEGOTIATIONS WITH HERTZ; AND FURTHER REQUIRING THAT, ONCE
NEGOTIATED, THE PROPOSED AGREEMENT BE REFERRED TO THE FINANCE AND
CITYWIDE PROJECTS COMMITTEE, FOLLOWING WHICH, THE AGREEMENT SHALL
BE BROUGHT BACK TO THE CITY COMMISSION FOR ITS CONSIDERATION.
WHEREAS, on September 10, 2008, the Mayor and City Commission approved the
issuance of Request for Proposals (RFP) No. 42-07/08, for a concession agreement of a
shared-car program for residents and visitors of the City of Miami Beach, (the "RFP"); and
WHEREAS, the goal of the Miami Beach Shared-Car Concept Program is to combine
Transportation Demand Management (TDM) strategies and measures, which aim to reduce
automobile travel demand, with support from a menu of alternative transportation
arrangements; and
WHEREAS, on September 11, 2008, the RFP was issued with an opening date of
October 14, 2008; and
WHEREAS, a pre-proposal meeting to provide information to prospective proposing
companies was held on September 25, 2008; and
WHEREAS, BidNet issued to 48 prospective proposers and BidSync issued bid
notices to 342 prospective proposers. Furthermore, the Procurement Office contacted
"Carsharing.net", a non-profit educational and promotional site supporting the car-sharing
industry in North America (Canada and the U.S.), which offered to post the information
pertaining to this RFP on their website. The outreach resulted in the receipt of a proposal
from Hertz; and
WHEREAS, on October 22, 2008, the City Manager, via a Letter to Commission
j (LTC) No. 271-2008, appointed the Evaluation Committee (the "Committee"), consisting of
the following individuals:
• Jeff Bechdel, New Business Specialist, Miami Dade County Transit Department;
• Christine Leduc, Transportation Coordinator, MB Transportation Division;
• Rachel Ovadia, Miami Beach Resident, Leadership Academy Member;
• Josephine Pampanas, Leadership Academy Graduate, Transportation and Parking
Committee Member;
• Judy Robertson, Member of Alliance for Reliable Transportation, Flamingo Park
Neighborhood Association;
• Elizabeth Wheaton, Environmental Specialist, MB Public Works Department; and
WHEREAS, on November 17, 2008, the Committee convened and after reviewing
and discussing their individual perceptions of Hertz' proposal, as well as their qualifications
and experience, unanimously agreed through a motion made by Committee Chair Christine
Leduc, to recommend Hertz; and
WHEREAS, the City Manager has reviewed and concurs with the Evaluation
Committee's recommendation.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby
accept the recommendation of the City Manager, pursuant to Request for Qualifications
(RFP) No. 42-07/08, for A Concession Agreement of a Shared-Car Program for Residents
and Visitors of the City of Miami Beach; and authorize the Administration to enter into
negotiations with Hertz; and further requiring that, once negotiated, the proposed Agreement
be referred to the Finance and Citywide projects committee, following which, the Agreement
shall be brought back to the City Commission for its consideration.
PASSED AND ADOPTED THIS /0 DAY OF becen412008.
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Of The Mayor And City Commission Accepting The Recommendation Of The City Manager;
Pursuant To Request For Proposals(RFP)No.42-07/08, For A Concession Agreement Of A Shared Car
Program For Residents And Visitors Of The City Of Miami Beach;Authorizing the Administration To Enter
Into Negotiations With Hertz.
Key Intended Outcome Supported:
Maintain or Improve Traffic Flow.
Supporting Data(Surveys,Environmental Scan,etc.):
Residents in the 2007 Community Satisfaction Survey cited traffic congestion as the second most important
factor affecting their quality of life in the City.
Issue:
Shall the City Commission adopt the Resolution?
Item Summa /Recommendation:
On September 10,2008,the Mayor and City Commission approved the issuance of Request for Proposals
(RFP)No.42-07/08,for a concession agreement of a shared-car program for residents and visitors of the
City of Miami Beach,(the"RFP").
While formal carsharing organizations have operated for more than 20 years in Europe,the first U.S.service
was introduced in 1998, in Portland, Oregon. A total of 19 nonprofit and for-profit operators have since
launched programs in 30 states,serving more than 20 major metropolitan markets and dozens of college
campuses.
The Shared-Car Program will be a component in the City's overall effort to promote multimodal
transportation options, which will help to facilitate mobility throughout the City. In order to nurture the
program along as a public benefit, the City may have to provide partially subsidized parking through its
parking inventory.
On September 11,2008,the RFP was issued with an opening date of October 14,2008. A pre-proposal
meeting to provide information to prospective proposing companies was held on September 25,2008. Bid
Net issued to 48 prospective proposers and BidSync issued bid notices to 342 prospective proposers.
Furthermore,the Procurement Office contacted"Carsha ring.net",a non-profit educational and promotional
site supporting the car-sharing industry in North America(Canada and the U.S.),which offered to post the
information pertaining to this RFP on their website. The outreach resulted in the receipt of a proposal from
Hertz.
After the receipt of one(1)proposal,the Procurement Office made an effort to contact all the organizations
that responded to the RFP process. The Procurement Office received letters from two Carsharing
organizations,ZipCar and Uhaul stating their reasons for not proposing.
On October 22, 2008,the City Manager, via a Letter to Commission(LTC) No. 271-2008, appointed the
Evaluation Committee.
The Committee, after reviewing and discussing their individual perceptions of Hertz' proposal,as well as
their qualifications and experience, unanimously agreed through a motion made by Committee Chair
Christine Leduc,to recommend Hertz.
ACCEPT THE CITY MANAGER'S RECOMMENDATION
Advisory Board Recommendation:
N/A
Financial Information:
Source of Amount. Acctttnt
Funds: >'1:. : ..
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Financial Impact Summary:
CitV Cl k's Office Legislative Tracking:
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TAAGEN 120081September 10XConsent\Shared,4arPrograrn RFP Issuance Summary.doc
MIA AGENDA ITEM
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MIAMI BEACH
City®f Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: December 10, 2008
SUBJECT: A RESOLUTION OF THE MAYOR ND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE CITY MANAGER, PURSUANT TO REQUEST FOR PROPOSALS (RFP)
NO. 42-07/08, FOR A CONCESSION AGREEMENT OF A SHARED-CAR
PROGRAM FOR RESIDENTS AND VISITORS OF THE CITY OF MIAMI
BEACH; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH HERTZ; AND FURTHER AUTHORIZING THE
MAYOR AND CITY CLERK TO EXECUTE AN AGREEMENT UPON
COMPLETION OF SUCCESSFUL NEGOTIATIONS BY THE
ADMINISTRATION.
ADMINISTRATION RECOMMENDATION
Adopt the resolution.
KEY INTENDED OUTCOMES SUPPORTED
Improve or maintain traffic flow.
ANALYSIS
On September 10, 2008, the Mayor and City Commission approved the issuance of
Request for Proposals (RFP) No. 42-07/08, for a concession agreement of a shared-car
program for residents and visitors of the City of Miami Beach, (the "RFP").
The goal of the Miami Beach Shared-Car Concept Program is to combine Transportation
Demand Management (TDM) strategies and measures, which aim to reduce automobile
travel demand, with support from a menu of alternative and multimodal transportation
arrangements. TDM strategies include bicycling, walking, electronic substitutes for
travel such as telecommuting, and a variety of shared and public transportation
strategies.
The Shared-Car Program will be a component in the City's overall effort to promote
multimodal transportation options, which will help to facilitate mobility throughout the
City. In order to nurture the program along as a public benefit, the City may have to
provide partially subsidized parking through its parking inventory.
The shared-car model is a membership based program which operates with a distributed
fleet of private motor vehicles parked at varying reserved locations (referred to as
"pods"). Shared-Cars are made available to members primarily for hourly or other short
term use through a self-service, fully automated system not requiring a separate contract
for each use. The concept of operation generally is to take pods of cars and place them
in different locations around the city so the user can walk from their home, condominium,
or business to get the car, use it and bring it back.
Commission Memorandum—RFP-42-07108,
December 10, 2008
Page 2 of 6
Studies have shown that shared-car programs positively impact the community in the
following ways: Environment: lower emissions, cost savings for development, less
congestion, better urban design, more compact development, less energy/resources for
vehicle manufacturing. Transportation system: lower parking demand, more fuel
efficient vehicles, less vehicle travel, more transit ridership. Individual/Business: cost
savings, greater mobility, and convenience. Neighborhood and transportation
characteristics are more important indicators for car-sharing success than individual
demographics of car-sharing members. The results indicate that higher levels of vehicle
non-ownership, has the strongest, most consistent correlation to the amount of car-
sharing service in a neighborhood.
While formal carsharing organizations have operated for more than 20 years in Europe,
the first U.S. service was introduced in 1998, in Portland, Oregon. A total of 19 nonprofit
and for-profit operators have since launched programs in 30 states, serving more than
20 major metropolitan markets and dozens of college campuses. As of July 2008, more
than 279,174 members were sharing approximately 5,838 vehicles in the U.S. Although,
for-profit carsharing organizations such as ZipCar account for 22 percent of carsharing
programs in the U.S. they account for 77 percent of the industry's membership and
almost 84 percent of the vehicles deployed. Nevertheless, nonprofit organizations in
large cities such as San Francisco, Chicago, and Philadelphia still account for almost 23
percent of the industry's membership and 16 percent of the industry's total fleet size. In
recent years, both for-profit' and nonprofit startups have established more modest
networks in mid-sized and smaller markets including Madison, Cleveland, Minneapolis,
and Austin. The car-sharing industry is mostly local in nature and not-for profit, and
those smaller organizations heavily depend on partnership support, often, government
sources.
The City of Miami Beach fits a model that offers higher chances of Shared-Car success
as there is high density, transit available and pedestrian friendly development.
In issuing the RFP, the City anticipated that car sharing vendors might not only wish to
use, but might need to use City Parking facilities in order to have a successful program.
Each vendor was provided the complete list of parking facilities with the RFP materials.
Vendors were asked to indicate in their proposal what the payment, if any, was
anticipated to be for any City facilities to be used in implementing a program.
The City intends to enter into a concession agreement with a Shared-Car company with
demonstrated experience in this area and with an interest in making their services
available to the City. The term of the Agreement resulting from this RFP shall be for an
initial term of five (5) years, with a five (5) year renewal option, to be exercised at the
City's sole discretion.
RFP PROCESS
On September 11, 2008, the RFP was issued with an opening date of October 14, 2008.
A pre-proposal meeting to provide information to prospective proposing companies was
held on September 25, 2008. Bid Net issued bid notices to 48 prospective proposers
and BidSync, (formerly known as RFP Deport) issued bid notices to 342 prospective
proposers. Furthermore, the Procurement Office contacted "Carsharing.net", a non-
profit educational and promotional site supporting the car-sharing industry in North
America (Canada and the U.S.), which offered to post the information pertaining to this
Commission Memorandum— RFP-42-07108,
December 10, 2008
Page 3 of 6
RFP on their website. The outreach resulted in the receipt of a proposal from Hertz.
After the receipt of one (1) proposal, the Procurement Office made an effort to contact
the organizations that responded to the RFP process by attending the pre-proposal
meeting either in person or in teleconference. The Procurement Office received letters
from two Carsharing organizations, ZipCar and U-Haul stating their reasons for not
proposing:
ZipCar, had a major reason:
1. Their analysis indicated that Miami Beach, being a smaller market, would not be
a viable investment without direct financial support.
U-Haul, had two major reasons:
1. Profit sharing.
2. They are currently working on building up other markets and decided to focus on
those.
On October 22, 2008, the City Manager, via a Letter to Commission (LTC) No. 271-
2008, appointed the Evaluation Committee (the "Committee"), consisting of the following
individuals:
• Jeff Bechdel, New Business Specialist, Miami Dade County Transit
Department
• Christine Leduc, Transportation Coordinator, MB Transportation Division
• Rachel Ovadia, Miami Beach Resident, Leadership Academy Member
• Josephine Pampanas, Leadership Academy Graduate, Transportation and
Parking Committee Member
• Judy Robertson, Member of Alliance for Reliable Transportation, Flamingo
Park Neighborhood Association
• Elizabeth Wheaton, Environmental Specialist, MB Public Works Department
EVALUATION PROCESS
On November 17, 2008, the Committee convened and discussed the qualifications of the
sole proposer, reviewing in detail the following criteria for this RFP:
1. Proposers' experience and qualifications in providing a Shared-Car Program
and sustainability of business plan
25 points
2. Proposed revenue to the City 25 points
3. Strength and sustainability of operating plan 25 points
4. The Plan impact on community mobility 15 points
5. Past performance evaluation surveys 10 points
Total 100 points
Jeff Bechdel recused himself prior to the meeting due to work matters; however a
quorum was attained. The committee unanimously nominated Christine Leduc as Chair
of the Committee.
Commission Memorandum— RFP-42-07108,
December 10, 2008
Page 4 of 6
EVALUATION COMMITTEE DISCUSSION/MOTION
In the Hertz proposal, no payment was proposed for use of City Parking spaces. Hertz
proposed a share of gross revenues to the City in order to compensate for use of the
City spaces. For valuation purposes, an average return to the City for a parking space is
approximately $1,500 annually. This revenue varies quite widely in the City depending
upon the location of the space. For the Hertz proposal the revenue loss would be
approximately $150,000 on an annual basis. The off setting revenue share in year 5 of
the agreement would reach its maximum of approximately $65,000. While the
Evaluation Committee and the Administration recognize that the numbers in the proposal
can be improved through negotiations, it is very likely that the City would not be able to
recover all of its potential revenues and be in a position to discount the facility rental
value for this program.
The policy question for the City Commission and one that was discussed by the
Evaluation Committee is if the shared car program offers enough value to advancing a
reduction of car ownership in the community and the environmental benefit of that
reduction to offset the use of parking spaces and some loss of revenue.
The Evaluation Committee discussed the added Parking facilities that were coming on
line in the next few years (City Hall Multi purpose garage, 5th and Alton garage, NWS
garage) and believed that the environmental and congestion reduction benefits were
greater than the concern of revenue loss and what they viewed as a temporary
tightening of available parking. The Committee believed that with new facilities coming
on line and the potential to reduce car ownership and therefore parking demand, the
program was worth pursuing.
The Committee was also satisfied that parking impacts could be mitigated by the City in
that the City would need to approve all space use and that the shared car pods are
dispersed throughout the City.
The Committee, after reviewing and discussing their individual perceptions of Hertz'
proposal, as well as their qualifications and experience, unanimously agreed through a
motion made by Committee Chair Christine Leduc, to recommend Hertz.
HERTZ PROPOSAL
Hertz has 90 years of experience in the car rental business and has been successfully
operating since 1918.
The common goal among carsharing is to significantly transform mass transit systems
throughout major cities, such as Miami Beach. Hertz carsharing will carry out that task
by providing Miami Beach with a state of the art technology, environmentally friendly
vehicles, with the highest in-house customer satisfaction featuring Hertz Member Care
Center (MCC) which operates 24 hours a day, 7 days a week, 365 days a year. With
one dedicated number, the Hertz MCC provides round-the-clock service to carsharing
members while keeping Hertz's value model of having the lowest prices for the highest
quality.
Hertz' launch strategy of"Connect by Hertz" will be divided in 3 phases:
Commission Memorandum— RFP-42-07108,
December 10, 2008
Page 5 of 6
• Phase I, will include a marketing plan with the City, the hiring of local operations
team, establishing membership goals and utilization, and the initial deploying of
30 vehicles.
• Phase II, will include press announcement, expand marketing campaigns,
evaluate goals/utilization, and deploy 30 additional vehicles.
• Phase III, will expand on all the goals and further marketing campaigns, as well
as deploy an additional fleet of 40 vehicles.
Hertz' vehicles will meet or exceed a set of aggressive standards established in the
categories of manufacturing/maintenance, and environmental sustainability:
• All vehicles will be SmartWay Certified
• 4 Star Safety Rating or better
• JD market appeal rating of 855 or higher
• Highway MPG of 24 or better
Hertz proposed Revenue Sharing:
• Year 1 —0% of gross revenue
• Year 2 —2% of gross revenue
• Year 3 —2% of gross revenue
• Year 4 —2% of gross revenue
• Year 5—3% of gross revenue
The Member Care Center (MCC) will provide around the clock service to Car Share
Members leveraging the existing infrastructure, answering incoming respond to e-mail
inquiries, including: Enrollment, Reservations, Billing, DMV checks, Road side
assistance, Dispatching enrollment, Extensions.
On December 1, 2008, Hertz announced the first ever trans-Atlantic carsharing launch.
Hertz carsharing will allow individuals and businesses access to a decentralized fleet of
vehicles throughout an automated, self-service vehicle access system for short-term
use. This global program has been in the making for over two years with more than 70
team members from across the globe working to develop and deliver a superior product
that offers a user experience never before seen in the carsharing industry.
Hertz created NeverLost, Hertz's customized in-car navigation system. The NeverLost
unit identifies exactly where you are at any time, and shows and tells you how to get
wherever you want to go, which it's included in Hertz's carsharing vehicles at no
additional charge. Hertz technological additions include Simply Wheelz by Hertz, which
is a discount car rental brand of The Hertz Corporation. Simply Wheelz speeds up the
car rental process by utilizing online reservations and automatic rental machines or
kiosks to give customers, access to their rental car without spending time in line at the
counter. Hertz has a diversified fleet such as the Green Collection which reflects their
model of "Reserve, Conserve, and Preserve." With the Hertz Green Collection,
customers can reserve fuel efficient, environmentally friendly cars.
With the introduction to the Net Promoter Score (NPS) system in 2007, Hertz is able to
track customer satisfaction in real time, and take immediate corrective action if service
issues arise. Hertz gives customers a toll free number to call, or website to visit, at the
end of their rental. Based on customer responses (more than 30,000 every month) and
Commission Memorandum—RFP-42-07108,
December 10, 2008
Page 6 of 6
additional feedback, Hertz_ implement local and systematic process, service
improvements, and share best practices at all locations. Hertz also implements
aggressive improvement plans at locations with lower NPS scores. As a result, levels
improved consistently throughout the latter half of 2007.
In preparation for this global carsharing initiative, Hertz launched "Hertz Hourly Rentals"
in New York City in 2007 and, later that year, in Boston. In less than 6 months both
revenue and usage have seen triple digit growth. Hertz has significant experience in
renting cars to the public on an hourly basis and through the use of self-service
technology.
POINTS FOR NEGOTIATIONS
The Committee recommended the following negotiation points:
1 For this program to be effective and successful, the proposed hourly and daily
rates should be more affordable and competitive than a car rental agency's
rates. Better insurance benefits, including no deductible, should be provided.
This would also make it more competitive when compared to a regular car rental
agency. Miles should be free Citywide. Shared-car vehicles should be parked
within walking distance to high demand areas and in residential neighborhoods,
in parking surface lots, garages, and on-street parking spots. Vehicles should
be available Citywide.
2 Shorter term contract, a three (3) year with a three (3) year option.
3 Since the City will be a partner in this venture, there should be a committee
formed to help launch this project. It should be marketed in a way so that the
City gets credit, not just Hertz.
4 Fleet vehicles offered should have low emission technology.
CONCLUSION
The Administration recommends approval of the attached Resolution accepting the
recommendation of the City Manager pursuant to Request for Proposals (RFP) No. 42-
07/08, for a Concession Agreement of a Shared-Car Program for Residents and Visitors
of the City of Miami Beach; and authorizing the Administration to enter into negotiations
with Hertz; and further authorizing the Mayor and City Clerk to execute an agreement
upon completion of successful negotiations by the Administration.
T:WGENDA\2008\December 10\Consent\RFP 42-07-08-For A Shared-Car Program-MEMO.doc
1.6.Funding sources for development
Funding for Hertz's carsharing initiative will come from The Hertz Corporation. The Hertz
Corporation, a subsidiary of Hertz Global Holdings, Inc., is the world's largest general use car rental
brand, operating from approximately 8,100 locations in 147 countries worldwide. Hertz is the
number one airport car rental brand in the U.S. and at 69 major airports in Europe, operating both
corporate and licensee locations in cities and airports in North America, Europe, Latin America,
Australia and New Zealand. In our business operating system our strategic initiatives such as
customer satisfaction, employee satisfaction and cash management demonstrates a balanced
approach to achieve sustainable, long term success. In 2007, Hertz generated more than $550
million in leveraged cash flow,working capital improved by$238.6 million, liquidity, including cash
and equivalents, exceeded $5 billion at December 31St, 2007 and the corporate EBITDA of$1.54
billion increased $162.8 million, or 11.8% in 2007. Hertz's dynamic cash flow can support its
carsharing initiative. Research shows that customers look for a company that they recognize to
ensure acceptable quality and reliability. Hertz's carsharing program allows The Hertz Corporation to
effectively tap into the carsharing market as we change the future of Rent A Car and pave the way
for cars on demand with an online reservation process, self-service rentals and 24/7 roadside
assistance with gas, insurance and maintenance all included. At a competitive price, customers all
over the globe will chose Hertz because it's a valued brand equated with the highest quality of
product and service.
1.7.Fleet Size
We believe we are one of the largest private sector purchasers of new cars in the world. In 2007,we
operated a peak rental fleet in the United States of approximately 338,800 cars. Our purchasing
power provides a competitive advantage in the acquisition and maintenance of our fleet. Purchases
of cars are financed through cash from operations and by active and ongoing global borrowing
programs. We maintain automobile maintenance centers at certain airports and in certain urban
and off-airport areas (including the Miami area), providing maintenance facilities for our car rental
fleet. Many of these facilities, which include sophisticated car diagnostic and repair equipment, are
accepted by automobile manufacturers as eligible to perform and receive reimbursement for
warranty work.
1.8.Impact of Carsharing)
The impact of carsharing on parking- Carsharing spaces create less stress on the urban parking
infrastructure. As a result, cities, businesses and governments save money. Benefits of carsharing
spaces mean improved availability of parking, reduced need to construct new parking and reduced
parking ratios for new development. The advantage of carsharing vehicles having their own spaces
creates a domino effect, in which members decide to sell their cars, resulting in a reduction in
overall driving, pollution and congestion in cities. When carsharing is in a community people tend to
drive less and start to use other transportation such as biking, walking, public transportation or cabs.
With each carsharing vehicle replacing more than 14 privately owned vehicles, carsharing can
change the quality of life in urban communities around the world. Older vehicles are being replaced
by new ones that are environmentally friendly. Lower fuel utilization means fewer greenhouse gas
emissions and less traffic on the roads. Hertz Carsharing will be a critical element in establishing a
transportation network in Miami Beach because it will enable residents to get rid of their vehicles
while being able to serve their transportation needs.
The impact of carsharing on miles traveled-Carsharing can have a major impact on the length of
trips and miles traveled. Once members give up their vehicles, the automobile will no longer be
1 TRCP report 108 Carsharing: Where and How.to Succeed Charter 4 Impacts of Carsharing.
14
their only means of transportation and they will practice a more resourceful form of mobility.
Reduced vehicle travel translates into major cost savings. Carsharing members make fewer trips
after becoming an active member and their total mileage driven decreases.These changes have
positive environmental impacts such as increased transit use, and can lead to increased reliability on
riding bikes or walking which have long term health benefits.
The impact on air pollution—Growing concern about the environment such as air pollution and
climate change has increased the attractiveness of carsharing. A fear of destroying the air quality in
our cities has prompted people to consider modes of transportation other than private car
ownership-.such as carsharing. A typical fleet consists of new vehicle types, including hybrids,
which helps to improve air quality and reduce greenhouse gases.All our vehicles are EPA SmartWay
certified and let out extremely low emission. Less driving plus newer vehicles are huge
environmental benefits in trying to reduce pollution.
The impact on transit, biking and walking-Younger generations are more environmentally
conscious than ever; and with their growing concern to reduce pollution and improve air quality in
their cities, carsharing has become their new transit choice. Members are selling their vehicles and
becoming increasingly interested in bicycling and motor scooters.Since carsharing creates less
congestion there has been an influx of transit use,walking and biking by carsharing members.
1.9.Scope of Work
Hertz's goals and objectives for this proposal are to provide Miami Beach with a multifaceted
carsharing program that will bridge the gap between car ownership and public transportation by
promoting a more livable city, reducing the number of cars on the road, and changing the way the
city expands.This means more fuel efficient vehicles, less pollution and traffic congestion and more
available parking. Hertz Carsharing services will provide individuals and businesses access to an
automated, decentralized self service fleet of vehicles spread throughout Miami Beach. Members
reserve the vehicles on the web or via a touchtone phone for as little as an hour up to a few days. A
simple hourly fee includes,gas, insurance, maintenance, cleaning, a reserved parking spot as well as
24/7 roadside assistance.The components that make up carsharing include:
• Membership-To join carsharing, all drivers must register and become approved to drive a
vehicle. Signing up is as easy as going online and filling out a quick application. If approved, a
Hertz Carsharing member can reserve a car in any city that is served by Hertz.
• Self-service vehicle accessing-Carsharing allows members to reserve a car on the web or via
telephone. Approved members are assigned a member number, a PIN and a "Smartcard" that
utilizes RFID technology, all of which are required for the self-service reservation and rental.
With the Smartcard, a member can open the doors and return the car without ever dealing with
a rental center.This allows carsharing to provide service more efficiently, as the time-consuming
hassle of the check-in process is eliminated.
• Hourly Rates-Car sharing charges by the hour, making short trips cost effective.
• Neighborhood-Based, Decentralized Locations- Hertz Carsharing vehicles will be conveniently
located in "pods" or reserved parking spaces throughout an area so that they are within easy
walking distance of as many people as possible. Most pods will have 2-4 vehicles.
• Priced Incrementally- Hertz Carsharing members will only be charged for their reservation time
if a car is returned on time.They can choose to use the vehicles for as little as an hour or as long
as 7 days, but we expect 3-4 hour reservations to be typical. Billing is automatic and includes an
itemized invoice,with a'discrete line item describing every transaction in detail.
15
• All-inclusive - Hertz Carsharing's simple hourly fee includes gas, insurance, a reserved parking
spot, maintenance, cleaning, and 24/7 roadside assistance.
• Member Care Center-The MCC will provide round-the-clock service to carshare members
leveraging Hertz's existing infrastructure, answering incoming calls via a toll free number (1-877-
654-4400) and responding to e-mail inquiries directed to the Carshare Member Care Center
mailbox (carsharemembercarecenter @hertz.com). Unlike our competitors, Hertz is the only
company to have a 24/7 in-house Member Care Center.
2. SCOPE OF SERVICES '
2.1.Carsharing Process
Click, book, drive, the process is that simple! Residents of Miami Beach will access the web at
connectbyhertz.com to learn about our services and join. Once accepted for membership, a
Smartcard will be shipped to the member. Residents of Miami Beach will have access to the entire
carsharing fleet in Miami Beach and across the globe. To book a reservation members access the
web or use our interactive phone system to select the location, type of car and length of
reservation. A confirmation email and text message is then sent to the user with additional
information on how to pick-up the car and any specific information related to using the vehicle. The
member then arrives at the vehicle and swipes their Smartcard across the card reader to access the
vehicle. The keys are located in the vehicle; the member starts the car and is on their way.
Once the member's trip is complete they return their car back to the same location, swipe their
Smartcard over the reader to lock the doors and finish the reservation. An electronic invoice is
automatically sent to the member via email.
2.2.Technology
utilizes state-of-the-art technology from Eileo to deliver a superior user experience. The Eileo
Hertz uti zes state t to 0 ogy p p
system is an end-to-end solution that combines hardware, software and services that enable the
end-to-end operation of carsharing. The system provides the necessary features to enable Hertz to
operate a large and disseminated fleet of vehicles through secure access control of these vehicles to
registered users. It also provides the necessary tools and services to operate efficiently. These key
processes include the customer relationship management(including registration and customer
care), the pricing, booking and billing engine,the fleet supervision and management, and the
statistics and indicators required for proper business supervision and planning. The Eileo system is
divided in 3 parts,the in-car system,-backoffice software and the end-user Interface.
The In-Car System: Every vehicle of the shared fleet is equipped with an in-car system that includes
an Onboard Computer System, to which are connected interfaces components:
■ An RFID Card Reader for user identification
■ A Smart,Control Screen Pad plus vocal instructions for user interaction
® A Smartcard Holder for parking and fuel card usage monitoring
o A Hands-free Audio Kit for in-car phone assistance via the MCC
A GPS to determine the position of the vehicle when needed and as permitted by law
■ A quad-band automotive GSM/GPRS modem,for real time and wireless communication
between the vehicle and the back office infrastructure or the call center,
A vocal and bluetooth module to provide vocal instructions.and connectivity to the end-user
■ Two CAN Bus controllers that enable CAN connectivity (through.OBD 11 connector)
® Eileo Patented Immobilizer system that enables a non invasive control of the vehicle ignition
■ A GPS/GSM antenna to provide proper signal to the GPS and GSM modules
The back office software is hosted on a clustered infrastructure for a secure and efficient operation
of the information system. Thanks to a collection of web services, the operator can design and
16
customize its website and manage the user experience. The infrastructure is based on a J2EE
architecture that includes:
• A relational database
• A J2EE application server(JBoss)
• A web server for web pages and services (Tomcat)
• A reverse proxy server for security matters (Apache)
• Customer registration and management
• Booking and billing
• Fleet management
• Parameters and statistics
• Operational flow management
Aside from the website where the consumer can access the booking engine or his or her personal
information (bookings, invoices history, personal info, etc.), the solution uses a large spectrum of
communication channels and means to provide a smooth user experience. Email is used to confirm
bookings or modifications, as well as notification of invoices. SMS alerts are sent to remind a
member of a booking and provide practical information like the car license plate and location. Vocal
instructions and the Smart Control Screen Pad are used inside the car to interact and help the driver.
Simple actions like booking modification or cancellation can alternatively be done by phone, through
the automatic IVR service or through the call center. The In-Car Screen Pad can also be used for
indicating some changes (booking extension) while the user is in the vehicle. All these actions and
information are handled in a multilingual, contextual and customized mode for a unique and fine-
tuned user experience.
How it works: The vehicles may be reserved by drivers either over the phone or on the Hertz
website for time slots ranging from one hour up to several days.The reservation is communicated
from our centralized server via GSM technology to the computer inside the vehicle.Then the driver
swipes their Hertz Smartcard over the card reader on the windshield during their time slot.The
computer recognizes the reservation for that particular driver, opens the doors, and at that point
the driver retrieves the ignition key from the glove box and drives the vehicle. During the journey,
the trip distance and duration data is collected by the on-board computer and reported on the
driver's monthly billing statement. At the end of the trip, the driver returns the vehicle to its specific
location, replaces the key in the glove box key holder,gets out, and swipes their card again to lock
the doors. All vehicles can be tracked through GPS if needed and as permitted by law.
Members join via the web. If accepted for membership the member will receive a personal
Smartcard (RFID) and user ID. Members are then able to book a vehicle in the fleet following a
number of parameters: availability, location, type of vehicle, etc. and will receive and electronic
confirmation of their booking with an estimated cost.
.Fifteen minutes before their booking,.the subscriber will receive an email or a SMS message on their
mobile, confirming the booking, as well as providing information on the booked vehicle (license
plate, location, fuel card code, etc.). The member goes to the indicated vehicle at the reserved time
and swipes their Smartcard in front of the RFID Card Reader installed behind the windshield.The
"identified user ID" is compared with the "authorized user ID"that has been sent through the
wireless (GSM/GPRS) modem to the vehicle On Board Computer when the booking has been
activated. If these IDs match, the doors are unlocked. The member can then take the car key
accessible inside the car, start the vehicle, and start driving.
During the booking, if necessary, the member can take the fuel card from the Smartcard Holder for
refueling the vehicle. Simple actions like booking modification or cancellation can alternatively be
done by phone. The user can also stop the car at any time, lock and re-unlock the doors with his or
her personal card, start again the car and go on using it.
17
At the end of the booking, the user returns the car to the parking lot, and confirms the end of the
booking. The member exits the car and locks it by swiping their card one last time. At that time, the
vehicle sends to the server all the information related to this booking: user, start/end time,
duration, mileage driven...that will generate billing information for an immediate payment via the
user's credit or debit card.
On top of this straight-forward scenario, multiple cases are controlled by the system. For instance, if
during a booking,the user realizes that he needs more time than initially expected, he may be able
to extend his initial booking through a manual call to the call center using the in car communication
module.
2.3.Services Provided
2.3.1. Reservation Process
First, a member decides to reserve a car. Members can reserve the vehicles on the web or via
touchtone phone, 24/7, 365 days a year,through an automated process. A member can reserve
a car for as little as an hour up to a few days. Visiting the website is the easiest and quickest way
to make a reservation.There may be a charge to reserve a car by phone.
To access a reservation a member would go to website and click "book now" on the top right
corner and a page would pop up called "create a booking."The reservation page will have
prompts for you to.answer such as: What time do you want to use the car? How long will you
need the car?Where would you like to pick up the car and what type of car-do you prefer?A
member will indicate their pick up date,time of reservation and return time.Then the member
will click on find a car and select a model type.You can view the results on a map powered by
Google or in list form.After selecting the previous information,you will receive a detailed
breakdown of the car as well as estimated charge. A screen will pop up asking you to "book
now" and confirm the reservation. We will send you an email confirmation of the rental as well
as confirmation to your mobile phone. You must review this confirmation for important details
of where to find the car and the fuel which it takes,with any other special instructions.
Reservations can be made minutes before the desired rental period or as far as 6 months in
advance. The maximum number of reservations you can make at once is 4.The earlier you book
your reservation, the more likely you'll get the car you want. We would have several locations
listed in Miami Beach,which would be presented to the user based on distance to the user's
address. If the first a car is not available,then look at the next closest location. If you cancel
within less than 4 hrs of your reservation,you will be charged the full cost of your reservation up
to one day. You can extend your reservation by booking online or by phoning the MCC and if
there is not another member already booked, the reservation may be extended.
2.3.2. Member Care Center(MCC)
One of the distinguishing features of Hertz is the 24 hour, 7 day a week 365 days a year in house
Member Care Center. The Hertz MCC provides around the clock service to members by calling
one number(1-877-654-4400). MCC representatives can respond to e-mail inquiries directed to
the Car Share Member Care Center mailbox (carsharemembercarecenter @hertz.com). In
addition to provided support and assistances our trained MCC representatives are responsible
for facilitating the enrollment process, completing DMV checks, assigning RFID cards, and
dispatching enrollment packets to new members. The MCC is also responsible for:
• Handling roadside assistance calls
• Contacting members during their first reservation
• Verifying drivers license for new candidates
• Setting up customer profiles from on line enrollments
18
Assigning and mailing Smartcards and welcome kits
• Verify if customer has rented 15 days after enrollment
• Contacting customers for feedback via email
• Contacting customers to verify if welcome kit was received
• Contacting renters when car is not at location via outcalls
• Mailing replacement Smartcards when original is lost/stolen
• Billing inquires
2.3.3. Customer Satisfaction
All customer service issues will be handled through the MCC. Hertz objective is to handle each
member on an individual basis to ensure complete satisfaction. Our employees are empowered
to resolve issues and make adjustments on the spot. All customer interaction will be tracked so
we can constantly monitor service and make improvements.
2.3.4. Billing
Billing will take place through the Eilieo system. Once a member's journey is complete an
invoice will be automatically generated for the time they used the vehicle. Members will
receive an email to let them know that a new invoice has been posted and they can view they
invoice on the website. If an additional fee needs to be added to the members invoice that will
also be posted. The members credit or debit card will be charged for the expenses they
incurred.
2.3.5. GPS turn by turn navigation
Each Hertz carsharing vehicle is equipped with its very own Neverlost In-Car Navigation Satellite
System. If you've ever been lost, or worried about finding your way town unfamiliar destination,
let the remarkable Hertz NeverLost, powered by the Magellan GPS system, be your guide.The
NeverLost unit identifies exactly where you are, and shows and tells you how to get wherever
you want to go. Hertz delivers this extraordinary technology throughout the U.S.to bring new
ease and assurance to your driving. The best part it's included in at no additional charge.
Benefits of Neverlost:
• Turn-by-turn Directions, Voice &Visual: Guides you to your destination.
• Miss a Turn? Neverlost quickly recalculates a new route.
• Route Method: Helps you to select the route that is right for you.
• Intelligent Transportation: Neverlost includes an intuitive user interface allowing faster
access to thousands of pre-programmed destinations.
• QuickSpelITM: Allows you to select any city or street with just a few touches of the keypad.
• Instant Locate: Determines your precise location at the push of a button.
• Yellow Pages: Select from a list of pre-programmed points of interest and local attractions.
• Choose Your Language: Dutch, English, French, German, Italian,Japanese, Spanish, Brazilian,
Portuguese, Chinese, or Korean.
2.3.6. Electronic Tolls
To make carsharing even more convenient for its members Hertz has partner with American
Traffic Solutions to offer PlatePass, an electronic toll payment system that allows members to
utilize electronic toll collection lanes, in all vehicles. PlatePass is provided and administered by
American Traffic Solutions, and American Traffic Solutions will directly bill Carclub members for
the toll charges that they incur. For additional information,visit PlatePass's website at
www.platepass.com or contact American Traffic.Solutions at 1-877-411-4300.
2.3.7. Services for the physically challenged
Hertz carsharing will provide reasonable accommodations to accept reservations with at least
twenty-four(24) hours notice for Cars equipped with hand controls. Members are not
permitted to install hand controls themselves. Since hand controls do not fit every car, not all
19
types of Cars may be reserved for use with hand controls. Carclub reserves the right to
substitute a Car that may be equipped with hand controls for a Car reserved by a member
requesting hand controls. For hand control reservations, members must call the Member Care
Center at 877-654-4400.
2.3.8. Bi-lingual website
Hertz is currently developing Spanish version of our carsharing website. We expect to have this
up and running during the first quarter of 2008.
2.4.Membership
2.4.1. Membership characteristics and usage patterns
Current statistics for Hertz' hourly rental program indicate that vehicle member's usage is on
average approximately 3.5 hours per day and three trips per month. The average miles drive
per trip is 59 miles. Member patterns indicate that the majority of usage occurs on weekends
and during the evening. Members use for leisure purposes is 81%. Business trips during the
make up 19%.
2.4.2. Member screening and criteria
Potential members will be disqualified based on the following:
• License currently suspended, revoked, expired or surrendered
• Conviction for reckless driving
• Conviction for driving under the influence, driving while intoxicated or driving while alcohol
impaired
• 2 or more moving violations incurred in the previous 24 months
• Failure to report accident or leaving the scene of an accident
• Conviction for possession of stolen vehicle, or use of a stolen vehicle in a crime.
2.4.3. Deposit requirements
There are no deposit requirements.
2.4.4. Fee requirements
The only fee requirements are the one time application fee and an annual membership fee for
certain plans. When an application is submitted we charge the applicant's credit or debit card.
The application fee,which covers the cost of your driving record check and insurance approval,
will be visible on your first bill. Within 3-7 days of mailing your Smartcard, we charge your credit
card the applicable annual fee and/or monthly commitment, depending on the rate plan you
selected when you applied. If your plan has an annual fee,your'credit card will automatically be
charged.
2.4.5. Minimum age requirements
The minimum age requirement to join is 18. For members 18-20 with no business or university
affiliation there is a underage surcharge of$7 per hour and $51 per day. Standard rates apply to
members 18-20 with a business or university afflation.
2.4.6. Usage polices for members
To maintain a carsharing membership one must uphold good standing with the required
carsharing service. Failure to follow carsharing rules will result in additional fees,which include:
• $25 for returning vehicle with %tank or less at the end of the reservation
• $200 for losing or taking an ignition key. Keys can cost,upward of$200 to replace.
• $50 if a member takes or loses a fuel card
• Car Documents Replacement-Actual replacement cost plus an administrative fee
• $50 charge if a member returns a vehicle late
• $20 fee will be charged for tickets and violations that have not been resolved on time
20
• $45 fee if the vehicle is not parked in its home parking location at the end of the reservation
• $45 additional fee can be incurred for cleaning services. Examples of what might lead to this
charge range from pet hair to cigarette smoke odor
2.4.7. Billing/Accounting requirements
Major credit and debit cards are accepted. Debit card requires a visa or master card logo. Other
acceptable forms of payment include American Express, Visa, MasterCard and Discover.
2.5. Pricing
2.5.1. Rates
Hertz offers three pricing programs with rates as low as$9.35/hour and $65.45/day. Standard
rates with no monthly fee start at$11.00/hour and $77/day. Pricing and price structure may
change from time to time. When you apply for a Hertz Carsharing membership there is a
onetime, non-refundable application fee of$25 and once you are approved you can choose
from 3 types of plans.These programs are Connect, Connect 50, and Connect 100. The
occasional driving plan is known as Connect.This is for members who do not want a monthly
commitment and prefer to pay as they go. Connect 50 and Connect 100 are two pre-pay
programs with $50 and $100 month commitment with discounts of 10% and 15% respectively.
These plans are for members who will be driving a lot and like the idea of saving money each
month. The hourly fee includes gas, insurance, maintenance, cleaning and 24/7 hour roadside
assistance. Pricing also includes a free parking spot, free GPS, free gas up to 180 miles and an
iPod adaptor.
^f Connect on�ect50 onnect 100
Prod�uGt/Service A
NolMon.thly Fee :$50/month $100%mon:th
_�
Discount None 10%. 15%
GPS Free Free -Free
,Electronic Toll`s l Cost.of to.l;l� Cost of toll Cost dftoll
iPod Adaptor Free Free Free
Annual Membership $SO Free. ;� Free
Application Fee $25 $25 $25
Damage' aiver _ Included F_�Included '' Included J
Deductable $250 -.$250 $250
;Liability Protection at.state mandated T 'i - ! - T �� -
E.
Included:' �, Included Included
min,in imum ievels
w_ 3 � --. ---X-- ---- - � --- --
Free miles after($0.45/mile) 180/day - 180/day .. 180/day
LFuel - --- --- - - - - -- - Free _- j� . Free. _ _ Free ---
y r
Hourly Rates Starting at: $11.00 $9.90 $9.35
;Daily Rates Starting $?i7`00 _ $_69 30-
24-hr Roadside Assistance Included Included Included
2.5.2. Insurance
The Hertz carsharing membership includes Liability Protection at the level mandated by the
automobile financial responsibility law of the jurisdiction in which the accident occurs and
protection for damage to or loss of the Car for the full value of the Car. The protection provided
with membership will conform to the basic requirements of any applicable mandatory "no
fault" law, but does not include "uninsured motorist," "underinsured motorist," "supplementary
no fault," or any other optional coverage. To the extent permitted by law, Carsharing and you
hereby waive and reject the inclusion of uninsured motorist, underinsured motorist,
supplementary no fault,or any other optional coverage. If such protection is imposed by
21
operation of law, then the limits of such protection will be the minimum required for primary
liability protection by the law of the jurisdiction in which the accident occurs. The protection is
primary with respect to any insurance coverage that you or an Authorized Operator may have.
The Liability Protection included with membership has a $250 deductible for damage to a Car.
This means that members are responsible for the first$250 of damages to the Car.
Hertz intends to offer third party provided supplemental liability insurance, personal articles
insurance, and personal effects coverage in the jurisdictions where it operates carsharing upon
obtaining approval for the offering of such products from the appropriate regulators.
2.6. Fleet
2.6.1. Vehicle types
Hertz is proposing to implement the Carsharing program in Miami Beach with 100 vehicles.The
vehicle makes and models would be selected in coordination with the city to meet the needs of
its residents. Hertz would work with Miami Beach to place vehicles in designated parking lots
around the city.Vehicles placed around Miami Beach would be identified by the Hertz
Carsharing logo. Additional vehicles would be added as utilization reaches mutually agreed
upon targets.
Hertz Carsharing prides itself on using green, clean and fuel-efficient vehicles. Our fleet consists
of gas-electric hybrids and other high MPG vehicles.All Vehicles will be SmartWay certified.
Hertz recommends a mix of vehicle types consisting of Toyota Camrys, Ford Escapes, Mazda 3s,
Toyota Priuses and Mini Coopers.We insist on having a fleet with small to mid size vehicles so
its easy to navigate in city traffic, easy to park and seat 4 people comfortably while having
extremely low emissions. All of these vehicles have a 4 Star Safety Ratings or better,JD market
appeal ratings of 840 or higher and Highway MPG of 24 or better. Example of Fleet:
City Highway Safety NHTSA Air Pollution Greenhouse
Models Volume MPG MPG Certification Ratings Score Gas Score
Mazda 3 15 23 31 Smartway 4 9.5 7.7
Certified 08
Toyota Smartway
Prius 15 48 45 Certified 08 4 9.5 4
Toyota 5 21 31 Smartway 5 . 9 7.3
Camry Certified 08
Mini 0 26 34 Smartway 4 7 6.3
Cooper Certified 08
Ford Pending
5 18 24 Smartway 4 7 9.6
Escape Certified 09
Tota 1 40 31.50 35.38 above 4 stars 9.13 .6.50
Fleet
2.6.2. Maintenance/vehicle servicing
Vehicles will be serviced and maintained through Miami Hertz Rent A Car operations. Oil
changes and other routine maintenance are performed in accordance with the manufacturer's
recommendations. Other maintenance such as tire rotations and replacements, tune-ups and oil
22
changes are performed either per manufacturer's specifications or more often, if necessary.
Since we typically only keep vehicles for three years,the amount of non-routine maintenance
work required is minimal.
Hertz complies with inspection and emissions laws in the jurisdictions that we serve. Also, Hertz
will have representatives who conduct Bi-weekly Quality Control Checks and go through a 19
P oint checklist to review vehicle cleanliness operations and equipment.
If drivers notice a maintenance concern,they should call the Member Care Center to report it.
In situations that compromise driver safety, vehicles will immediately be taken out of service
until they are repaired.
Hertz will clean its carsharing vehicles at least once every two weeks.The exterior will be
washed either at a conventional car wash or a Hertz Rent A Car location.The interior of each
vehicle will be vacuumed, the floor mats shaken out, the windows washed, the dashboard and
the tires polished, high usage areas will receive special attention, and litter will be removed.
Vehicles that require attention will also be cleaned outside of the regular cleaning schedule.
In addition to Hertz's scheduled cleaning efforts, members sometimes choose to take our
vehicles through a car wash. In such cases,the member is reimbursed for costs and also receives
a driving credit for helping us to keep the vehicle in top form
2.6.3. Vehicle life
Vehicles will typically be decommissioned as follows:
v 36,000 miles
e 3 years
• Damage over$5,000
2.6.4. Parking arrangements
Hertz will work with the city to select the best possible locations outlined in the RFP. City will
provide parking for vehicles at no cost to Hertz. Each parking spot will be branded with the Hertz
Carsharing logo. Highly visible signposts with information on carsharing will be placed at each of
the parking spaces to designate it as an official carshare parking space.Stencils on the pavement
will be added as well to help members remember where to find and return the cars. Parking
garage will need to accessible 24.7.365.
2.6.5. Location of vehicles
The City of Miami Beach operates 64 surface parking lots; however,the best fit for Carsharing
vehicles is in parking garages. For Phase 1, the Hertz fleet will be placed in 4 parking garages in
Miami Beach that are accessible 24/7, locations to be determined.
The following criteria will be utilized to select locations:
• Security
• High residential area
• Accessibility 24/7/365
• Egress and ingress
• Visibility
• Partnership opportunities with apartments/condos
• Signage potential for marketing opportunities
• Remember parking= advertising
23
2.6.6. Mobility Partners
Hertz has partnerships with over a hundred organizations across the globe. Partnerships include
Amtrak, Rail Europe, Marriot,AAA,visitflorida.com, National Parks Foundation. For more details
on service partners, please visit our website at www.hertz.com and click on partners.
3. IMPLEMENTATION AND OPERATING PLAN
3.1. Operations and implementation team
Griff Long(Senior Director-Global Carsharing)
Leading the global Carsharing initiative is Hertz veteran and former Flexcar, Vice President of
Operations, Griff Long. Mr. Long previously worked at Hertz for 15 years where he had
responsibility for over 60 locations, 7,500 vehicles and approximately 600 employees producing over
$120 million in revenue. After leaving Hertz, Mr. Long became the Vice President of Operations at
Flexcar(now the present day Zipcar)where he provided them with strategic,fiscal, and day-to-day
leadership over all aspects of operations, sales, business development, and account acquisition/
negotiations/management. Mr. Long now leads Hertz's carsharing operations. His role at Hertz has
been to expand the Hertz vision while overseeing every aspect of daily operations globally. Mr. Long
holds a BS in Management Science from Bridgewater State College.
Jackie Vander Ploeg(Market Development Manager)
Ms.Vader Ploeg is responsible for new market development including sales, marketing and
promotions. Prior to joining Hertz Ms.Vander Ploeg served as the Marketing Manager for NY
Waterway Ferry Corp from January 2007-August 2008. She joined Palisades Financial as a
Marketing Manager in February of 2005. Mr.Vander Ploeg holds a Bachelors degree in Business
from Delaware Valley College.
Laura Poznanski (Quality Assurance Specialist)
Ms. Poznanski is responsible for fleet implementation and quality assurance for all new market
launches. Working closely with IT and other cross function department Ms. Poznanski tests user
experience including website,vehicle technology and phones systems. Prior to joining the
carsharing team Ms. Poznanski worked in the national sales department of Hertz Equipment Rental
Corp.for five years. She holds a Bachelor of Science in Business Administration with ten years of
working experience.
Jaclyn Raineri (Market Development Specialist)
Ms. Raineri is responsible for new market development including coordinating marketing
promotions and developing partnerships with local businesses, universities and community
organizations to promote carsharing. In addition, Ms. Raineri is responsible for all training and
coordinating new market launches. Prior to joining Hertz, Ms. Raineri worked at Dan Klores
Communications, a public relations agency, where she worked as a publicist on several accounts and
specialized in media relations, event planning and crisis management. She holds a Bachelor of Art
in Public Relations with an emphasis on Marketing from Quinnipiac University
3.2. Local Operation Team
Prior to launch, Hertz will hire three team members to head up the local operations. This will in
include a General Manager, and 2 Market Development Specialist. The General Manger will be
responsible for all day-to-day operation including P & L, membership acquisition,fleet management
and other functions that typically included with the General Manager title. Market Development
specialist will be assigned target neighborhoods with the objectives of developing membership,
monitoring vehicle utilization and training and hiring part-time marketing professional to assist with
member events and guerrilla marketing efforts.
24
3.3. Launch strategy
Hertz Carsharing is proposing to launch a three-phase role out plan in the city of Miami Beach in
January 2009.
Phase I -30 vehicles would be placed in the City of Miami Beach at mutual agreed upon locations.
Vehicles would be placed in a tight cluster all within a one-mile radius and less than a 5-minute walk
between vehicles. All 30 vehicles would be-placed and operational within 30 days of signing an
agreement.
Phase II (30-60 days)—30 additional vehicles would be added to fleet and deployed,in additional
clusters around phase I locations. Vehicle usage patterns would be reviewed from phase I to help
determine best locations. Additional vehicles will be added to area that are achieving highest
utilization.
Phase III (60—90 days)—40 more cars would be placed reaching critical mass in the City of Miami
Beach. Again, utilizing usage patterns from phase I and II and additional vehicles would be deployed
in areas that are reaching highest utilization.
With 100 vehicles deployed in less than 90 days,The City of Miami Beach would have a fully
deployed carsharing program that is sustainable and achieving the city goals of combining
Transportation Demand Management strategies and measures, which aim to reduce automobile
travel demand, with support from a menu of alternative transportation arrangements.
Project time line:
December 08 January 09 February 09 March 09
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3.4. Marketing plan
Hertz's marketing efforts and advertising campaigns throughout the years helped to build a solid
foundation for the brand. The Hertz brand is highly recognizable amongst its consumers and that
can be traced back to our strong marketing strategy. Hertz has developed awareness in the
automobile industry, built credibility and a positive disposition toward the Hertz brand, delivered
25
consistent customer service and quality of our products and maintained focus on effective utilization
of time and money.
For the launch of Carsharing in Miami Beach, Hertz proposes a localized marketing strategy. By
penetrating the community with focused local marketing, we will create awareness of the Hertz
Carsharing service.
Along with marketing,there would be a significant amount of publicity needed. Public relations
would be essential in gaining exposure.Through press,TV and radio we would leverage the brand by
creating positive name recognition. Non-profit environmental groups and bicycle and pedestrian
advocacy groups are worthwhile channels to target as well., Most people are not aware of the cost
of owning their own vehicle and do not know the environmental risk of owning a car.
Holding local events in the community such as coffee shops, neighborhood street fairs and
convention centers may be valuable exposure.This is where you can engage people and gain
members. Another alternative is door to door marketing where you would have the opportunity to
explain carsharing to people that live close to where the cars are parked.The goal is to target
neighborhoods where people are only within a 10 minute walk to the pods.
Using indirect marketing, such as cultivating partnerships with transit agencies and local
government agencies could help initiate good will in the community.At Hertz we feel its important
to partner with transit agencies because we can collaborate and create a total mobility plan to
reduce congestion, pollution and parking constraints in Miami Beach. In addition our marketing
plan will include the following:
Pre-Launch marketing- 2 weeks prior to launch,the local operation team will begin marketing
around placement of vehicles. This will include collaborating with The City of Miami Beach to seek
potential partners such as local business, and organizations such as TMA's and Downtown
partnerships._Recruiting members and offering free join promotions through direct mail to include
free one-year memberships.
Launch Event—host a special event geared nearly exclusively for media coverage with key note
speaker to generate coverage among print and broadcast media to increase awareness of and
identification with cost and convenience of carsharing. As well as issuing a news release including
information about the number.of and placement locations of new vehicles, leveraging high cost of
vehicle ownership, high gas prices and environmental impact.
Media - Using transit advertising, both interior and exterior, would target exteriors for bus routes
that travel through highly trafficked neighborhoods and downtown as well as interiors for bus
routes that service neighborhoods with strong Flexcar presence. Target paid media such as
performing arts magazines,gay/lesbian newspapers, and other local outlets.
Member Events- Develop targeted demographic.and geographic zones, defined by zip code and/or
neighborhood jurisdiction, or by the intersection of high transit, low car ownership and multiple
Hertz locations. Integrated and coordinated outreach campaign including, member socials at local
local restaurants and common gather places with the objective of recruiting new members.
Direct Mail -Target dense/high occupancy buildings in zone and send direct mail pieces with
discount promotions,join free, coming soon brochures.
26
Guerilla Marketing-We would position street teams at events to handout fliers and promote the
service.
Retail Partnerships—Partnering with local retailers in the communities such as coffee shops and
other businesses at which the public gathers. Hertz may provide discount promotional
opportunities for customers of retail establishments.
Point of Sales—brochure racks Rack cards @ Metro stops and participating neighborhood partners
could include the following:
• Coffee sleeves
• Pizza boxes
• Posters at residential real estate and other locations
• Postings on neighborhood bulletin board
• Community paper advertisements
• Bus and rail advertising in select and geographically targeted areas.
Public Speaking engagements—Attend Neighborhood Council Meetings and provide education on
carsharing .
Branding—One of the best ways to market carsharing is by having the vehicles seen on the streets.
Carsharing vehicles are one of the simplest ways to gain exposure and advertising. Therefore,to the
extent permitted by Miami Beach and allowed under Florida law, vehicles will be branded with a
subtle Hertz carsharing logo. Additionally, all vehicle parking locations will branded,with the Hertz
logo for identification and advertising. If agreeable, signs will also include a brochure rack for
potential members to obtain information on Hertz carsharing.
4. BUSINESS PLAN
4.1.Revenue sharing
Introducing carsharing to a new market requires a substantial investment, in some cases, over a
million dollars. That said Hertz is willing to participate in a revenue sharing model as follows:
Year 1—0%of gross revenue
Year 2—2%of gross revenue
Year 3—2%of gross revenue
Year 4—2%of gross revenue
Year 5—3%of gross revenue
The objective of this model is to allow Hertz to establish a presence in Miami Beach during the first
year using all revenue to fund future growth and cover start up cost. Hertz projects to reach a
positive gross margin in the 3rd quarter of 2009,which will allow Hertz to begin sharing revenue with
the City of Miami Beach during years 2-4. As the business develops, Hertz will hope to have
recouped all start-up costs and have a positive contribution. As a result in year 5, Hertz will increase
the percent of gross revenue paid to the City of Miami to 3%. Payments will be made on an annual
basis.
4.2.Preliminary capital proforma
This preliminary proforma includes revenue projections for the first 5 years of operations as well as
estimated revenue paid to the city of Miami Beach. These projections are based on assumptions
that we cannot and do not guarantee. We similarly cannot and do not guarantee performance or
results. These projections may not prove to be accurate.
27
City of Miami'Beach Revenue Pr-oforma.
20-09 2010 2011 2012 2013 Totazl
Net Revenue $ 463 000 $1,204,000 $1,750,000 $ 2,007,000 $2,191,000 $7,615,000
Concession % 0% 2% 2% 2% 3%
Concession
Payment $ _$24;080 $_35000 $40,140_ $65,730 $164,950
4.3.Hertz Financials
For 2007, Hertz achieved record worldwide revenues of$8.69 billion, an improvement of 7.8%over
2006; a 210 basis point improvement in adjusted direct operating expenses as a percentage of
revenues; income before taxes and minority interest of$386.8 million, up 92.8%; adjusted pre-tax
income of$660.7 million, up 35.8%. Net income more than doubled to $264.5 million; adjusted net
income of$409.8 million, up 36.7%. Diluted earnings per share of$0.81 versus$0.48 per share in
2006; adjusted diluted earnings per share of$1.26, compared with $0.92 in 2006.
Cash Management of The Hertz Corporation:
• In 2007, Hertz generated over$550 million in leveraged cash flow
• Working capital improved by$238.6 million
• Liquidity, including cash and equivalents, exceeded $5 billion at December 31St, 2007
• Corporate EBITDA of$1.54 billion increase$162.8 million, or 11.8% in 2007
Please see below for proven record of Hertz Rent A Car financials for the past three years.
Historical Segment Income Statement
($ in Millions) CAGR
2005 PF 2006 ACT 2007 ACT 05PF-07
Rent A Car
Revenues: $6,046.80 $6,378.00 $6,920.60 7.0%
%of Growth 9.8% 5.5% 8.5%
Expenses:
Direct Operating and Selling, General, and
Administration $3,908.60 $4,061.60 $4,246.70 4.2%
Depreciation of Revenue Earning Equipment 1,398.50 1,495.00 1,698.60 10.2%
Total Expenses Before Interest $5,307.10 $5,556.60 $5,945.30 5.8%
Interest Expense, Net $337.80 $349.10 $370.30 4.7%
Adjusted Pre-Tax Income $401.00 $472.30 $605.00 22.7%
%of Revenues 6.6% 7.4% 8.7%
Corporate EBITDA $575.00 $653.40 $737.90 1 13.3%
%of Revenues 9.5% 10.2% 10.7%
For more details on Hertz financials please see enclosed 10-K and The Hertz 2007 annual report
included in this binder.
28
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