Car Sharing

words by > Neal Learner

Find out how car sharing—renting a car by the week, day, even hour—can save you much more than car payments.

Two years ago, Kerry Humphrey was tooling around the Mojave Desert in her beat up old Dodge Neon. Today, living in the Northern Virginia suburbs of Washington, DC, she selects her ride from a fleet of stylish Mini Coopers, Toyota Priuses, Scion xBs and Honda Elements, among others. Humphrey has joined the growing numbers of urban dwellers who have ditched their old vehicles—along with car payments, insurance premiums, repair bills and parking headaches— in favor of “car sharing.”

“I wasn’t sure what to expect at first, but I liked the idea,” recalls Humphrey. “And it’s worked even better than I thought it would. It has kept me, most importantly, from having to buy a car, which I didn’t want to do.”

Providing a cool set of wheels without the hassle and expense of car ownership is the driving force behind car sharing. Unlike traditional rental cars, car-sharing vehicles are located in designated spots throughout city neighborhoods, much like private cars. And instead of renting by the day or week, car-sharing members generally rent by the hour, reserving their cars online sometimes only minutes before climbing in. Rates range from about $8 to $11 per hour, which includes gas and insurance.

THE CONCEPT HAS SHIFTED INTO HIGH GEAR.

Zipcar, the largest of the car-sharing companies, doubled in size last year. It now operates in Boston, Chicago, New York, San Francisco and Washington, DC, and is moving rapidly into new markets, including college towns, says president and CEO Scott Griffith. Membership is growing by word-of-mouth and as city residents begin to realize that having one’s own car can quickly begin to look like an extravagant expense that can be easily avoided.

The American Automobile Association estimates that owning a car in a major city can cost well over $600 a month. “You compare that to the cost of using a Zipcar a few times a month for a fraction of that ownership cost—and you can get a car any time you want, anywhere in the city—the value proposition from an economic perspective is very strong,” Griffith says.

Car sharing works best in cities with large populations, good public transportation and where too many cars vie for too few parking spaces. In DC’s Dupont Circle neighborhood, for example, parking can be a nightmare. More than 10% of the neighborhood’s residents over the age of 21 now use Zipcars, Griffith says.

ENVIRONMENTAL BENEFITS

A 2005 study by the Transportation Research Board, found that each car-sharing vehicle is estimated to take
14.9 private cars off the road, in part because people turn in their private cars and actually start to drive less.

Mark Norman, CEO of the country’s second largest car-sharing company, Flexcar, says new technology has allowed the concept to become a reality. Flexcar members log into the website and pick a time they need a car, whether it’s a minute or a year in advance. Next, they pick a vehicle located close to where they live or work. When they arrive at the car, they swipe a Flexcard and the doors unlock automatically. “The keys are in the glove box, and the engine immobilizer is then disengaged because your reservation is wirelessly confirmed. You just start up the car like it’s your own.

“In an environment where people are accustomed to buying pizza by the slice or music by the song, surely paying for a car by the hour fits within that value set and lifestyle,” he says.

It certainly does for Ahnna Smith, who recently moved to Washington, DC and uses Zipcar vehicles for business. Smith looked into parking rates in locations near her Adams Morgan neighborhood. “Most go for $150 to $200 a month to rent a space,” she says. The other option would have been to drive around for 15 minutes or so trying to find a convenient spot. “I can’t put a price on not having to deal with that,” she says.

PARTNERING WITH CITIES

Sold on the benefits of car sharing, many cities are partnering with Zipcar, Flexcar and other smaller operations to reserve on-street parking for the shared vehicles.

The expansion may frustrate car owners, as more precious curbside parking spaces are devoted to car sharing vehicles. However, with time, they are sure to realize that with each shared car, many private cars are likely to come off the road.

POTENTIAL MARKET

Griffith says the car-sharing market has plenty of room to grow. “The potential market for North America is north of 2 million,” he says. Zipcar currently has more than 2,500 cars and 80,000 members nationwide.

Norman also is bullish about the growth potential. Flexcar roughly doubled in size last year, and now has some 1,000 cars in eight metropolitan areas.

The variety of cars is attracting new members. “Customers choose a car depending on the occasion that they’re driving for,” Griffith says. “They love the idea of having a fuel-efficient Prius for a trip on Saturday to do errands and still want to get a BMW for a business trip or date.”

Humphrey notes that members are just as passionate about their cars. “You get a little territorial about your car,” she quips. “You see someone driving it, and they’re your Zipcar buddy. You wave at them, and you don’t even know them.”

“In an environment where people are accustomed to buying pizza by the slice or music by the song, surely paying for a car by the hour fits within that value set and lifestyle.”— Mark Norman, CEO of Flexcar