The Evolution of Car Sharing
Car sharing has changed dramatically since Clean Fleet Report first reported on it a decade ago. While it was picking up steam at that point, in the years since it has morphed and been influenced by changing technology, both in vehicles and in the software that enables the service. Some big players have jumped in and then retreated. Some small players were gobbled up by bigger companies. Where car sharing once resembled a rent-by-the-hour system that was a more decentralized version of the traditional car rental, it has now become a ubiquitous system that includes shared use and even cars that drive themselves. The changes keep coming as illustrated in this recent update. We recently took a look at a brand-new local iteration run by the local auto club, but using software developed and being used by many others.
Car sharing allows households to own only one car, instead of two or three, or for some to forgo car ownership completely, using the variations of car sharing and services to pick a vehicle or ride for a given task and location. For some Americans it gives a chance to drive and experience a different car, maybe an electric car they might be thinking of purchasing.
Like they say about real estate, with car sharing it is location, location, location. The best program for you is a function of where you live and your mobility requirements. But take a look at the variety of program available. One of the gurus of car sharing, Dr. Susan Shaheen of UC Berkeley, says we are in the age of shared mobility where new modes of alternative transportation services are making great changes. “Pushed primarily by demographic shifts, societal attitudes toward ownership, and advances in mobile technology, these modes are growing rapidly and becoming more numerous,” she commented recently. She outlines the variety of choices available in a white paper. For her car sharing had subcategories of:
- Personal Vehicle Sharing (which can include fractional ownership models)
Then there’s scooter sharing and bike sharing (also with subcategories of public, closed campus and peer-to-peer [P2P]). Autonomous technology can overlay much of this as well.
Competing with car sharing are alternative transit services (shuttles or microtransit), ride sharing (carpooling or vanpooling), on-demand ride services (ridesourcing, ridesplitting or e-hail services) and courier network services (P2P delivery services and paired on-demand passenger ride and courier services).
The choices can be almost overwhelming, so services like Yelp can help you sort out the consumer-facing side of the choices. Where it used to be Hertz or Avis–or the taxi–the choices now are much more complex.
According to Navigant Research, it’s not going to change soon. Their take on car sharing and related services was just published. They found: “Mobility as a service (MaaS) solutions such as carsharing, ride-hailing, and micro transit provide much more flexibility while also enabling the replacement of 5-20 individually owned vehicles depending on the use cases. According to Navigant Research, global revenue generated by ride-hailing services is expected to grow to almost $1.2 trillion in 2026.”
Although the carshare service model has been well established over the past 15 years, there have been some significant innovations in the market recently. The success of one-way car sharing services is prompting more companies to consider offering this service model. Such services can increase utilization since members can use one-way car sharing for shorter, spur of the moment trips. Automakers have entered this market with good results, building substantial membership levels in only a few years. Meanwhile, the adoption of plug-in electric vehicles (PEVs) in car sharing services is expected to increase as automakers promote this technology.
Car companies are aware of these shifts, as you can see below, and are doing their best to try to keep up. This is a subject we’ll keep checking in on as it evolves.
If there was any question about the changing landscape, General Motors’ $500 million investment in the ride sharing company Lyft. The stated goal is to experiment in autonomous on-demand vehicles, hedging the reduction in vehicle sales caused by ride sharing by making GM the preferred vehicle provider for Lyft drivers and integrating connectivity tools like OnStar. Lyft claims it is the fastest-growing ride share service and is available in 190 cities worldwide. Lyft also has rolled out multiple-rider sharing that creates an on-demand carpool.
Uber is the Hertz to Lyft’s Avis. It’s available in more than 300 cities around the world and offers a variety of vehicles to fit the needs of your trip, whether its an eco-friendly model or the full black limo experience. Uber’s value proposition is that it is cheaper than using a taxi and much cheaper than using a personal car.
Zipcar bills itself as the world’s largest car sharing and car bluc service. It views itself as the logical alternative to car ownership (own the trip, not the car) and traditional car rentals. The company was purchased by Avis in 2013 and operates as a subsidiary of the traditional car rental company. Zipcar has more than one million members worldwide who can reserve and use 10,000 cars in 500 cities in nine countries. In the U.S. Zipcars can be found in Atlanta, Austin, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, Minneapolis, Milwaukee, New York, Philadelphia, Providence, Sacramento, San Diego,
San Francisco, Seattle and Washington, D.C. as well as universities throughout the country. Zipcar offers more than 50 makes and models of vehicles, including Audis, BMWs, Mini Coopers, pickup trucks, Prius hybrids and more. Each vehicle has a home location: a reserved parking space located on a street, driveway, or neighborhood parking lot in the member’s area, to which it must be returned at the end of the reservation.
Enterprise Car Share
Although Enterprise is known as a car rental giant, they have expanded into cars sharing 10 years ago, featuring a program rich in hybrids, plug-in hybrids, and electric cars. Just as UPS has gone beyond delivery to offer large customers complex logistic services, Zipcar offers fleets a growing range of services. For example, the City of Houston better manages vehicle use by adding 50 existing city-owned fleet vehicles, including 25 Nissan LEAFs, with Zipcar’s FastFleet® proprietary fleet sharing technology. Enterprise acquired Philly-Car Share and its 13,000 users, then Mint Cars On-Demand, a car-sharing company serving more than 8,000 members in New York City and Boston. It later added Chicago’s 15,000 IGO car sharing service members and now operates on 130 college campuses, 40 government programs and has 300 business accounts in 35 states, Canada and the U.K.
Hertz on Demand–A Cautionary Tale
Hertz tried to leverage its huge presence to expand into car sharing. Hertz has 8,500 locations in 150 countries. A growing number of hybrid and electric cars are offered in the Hertz Green Travel Collection. Its car share program, Hertz on Demand, launched in December 2008 and grew to more than 1,000 vehicles, 85,000 members and more than 500 locations worldwide, including corporate fleets, airports, hotels, utilities, government, and universities. However, the company pulled the plug on U.S. operations citing a “low return on investment” after a half-dozen years of operation.
Car2go, owned by auto giant Daimler, is the world leader in one-way car sharing. Car2go is in 15 North American cities. Car2go is a point-to-point car sharing service. You pay 41 cents a minute. And all without running fixed costs or deposits, parking charges, fuel costs, or recurring annual fees. No surprise fees are charged for being early or late, like some other car sharing services. You can take any of the car2go vehicles you find distributed around you, or you can reserve an available vehicle 30 minutes before you want to drive. That way, you can get to your destination faster. Once you reach your destination, you can either end your trip in accordance with your city’s Parking Rules, or you can keep it if you want to drive further.
General Motors has got into car-sharing in a big way with Maven, which is now operating in 17 cities. Beyond basic car sharing, Maven has moved into more of a hybrid operation with Maven Gig, where cars, led by the new Chevrolet Bolt EV, are available for all-inclusive weekly rentals for folks working for other car sharing or delivery services. We just interviewed Maven’s chief growth officer and found she’s got bold plans for expansion in this new gig economy.
German executives see an increased global interest in using cars as a service, with consumers and fleet managers paying by the minute, hour, and day. BMW ran a successful pilot program of EV car sharing in SF, based on its European model, but went on hiatus because of a lack of progress in securing parking permit regulatory change. ReachNow is starting to ramp up in Portland, Seattle, Brooklyn and other cities. It is big in major German cities where the program also includes the bike sharing that inspired one-way car sharing. They’ve also explored using an app that gives the user alternative transportation options, calculating time and cost for each variable. In addition, it offers options of driving yourself or being picked up and driven to your destination–a blending of car sharing and ride sharing. ReachNow uses the Ridecell technology platform for its service. ReachNow has a fleet of 700 vehicles in Seattle, 360 in Portland and 260 in Brooklyn. Models include the BMW 328xi and 330xi sedans, the electric i3, the BMW X1 SUV, the Mini Cooper (in both 2-door and 4-door configurations) and the Mini Clubman.
Like GM, Daimler and BMW (and other car companies), Ford is taking a big picture view of the car sharing business and has dipped into it by buying the microtransit company Chariot, which is is rapidly expanding around the world. Chariot seeks to supplement mass transit services by providing first/last mile transportation along regular routes based on consumer demand. Ford’s paired this and augmented it with a bike-sharing service. We covered the start-up here.
RelayRides’ peer-to-peer car sharing is part of an emerging trend of the sharing economy. RelayRides enables personal car sharing with web listings, $1 million liability insurance, and GM OnStar support. Investors in RelayRides include Google Ventures and GM Ventures. RelayRides is a leading example of peer-to-peer that is also embraced by other innovators including Wheelz, Getaround, Whipcar, IGO, non-profits, and even pilots among some auto service giants.
Ridesharing to work carries more people each day than transit. Sharing cars and rides is challenging among strangers. Trust is natural for people who work together. vRide makes it easy for individuals, employers, and transportation managers to facilitate carpooling, vanpooling, and park and ride. Similar organizations that help with facilitating, lunch-and-learns, vehicles, insurance, and ride matching include 511.org and Rideshare by Enterprise.
Getaround is free to join. Choose from 1000s of cool cars shared by great people in your neighborhood is the pitch of this peer-to-peer car sharing operation. Convenient hourly and daily rentals. No monthly or annual fees. All Getaround rentals include insurance coverage and 24/7 roadside assistance.
A number of billion dollar giants, venture backed players, and innovators see a major opportunity in the transition for vehicle sales to transportation services. With Daimler, GM and BMW now in the business, Toyota and others are evaluating whether to have their own car sharing program or strengthen partnerships. Audi just invested in Silvercar, what it calls a “next generation” car rental company. Because cars haring is capital intensive, the business is a natural for banking and financial service giants. Sharing, peer-to-peer, and fractional ownership have risk and liability management challenges. Who better to solve these than insurance giant entering the business? With information technology and social networking being integral to innovative mobility sharing, look for new strategic alliances and partnerships.
Bookmark this site and check back as we continue to update this list.
John Addison: Meeting of the Car Sharing Minds
At a meeting several years ago, I (John Addison, founder of Clean Fleet Report) lunched with Zipcar President Mark Norman gave me a good idea of why members prefer the range of carsharing services to owning a car. A member can try an electric car one day, use a larger van to transport 6 people the next, then take an AWD to the mountains on the next. Zipcar’s potential is enormous. By succeeding at a university such as USC in Los Angeles, Zipcar has a base to expand in Southern California’s over 10 million car drivers and massive fleets. I expect Zipcar to soon have over one million members.
Just as UPS has gone beyond delivery to offer large customers complex logistic services, Zipcar offers fleets a growing range of services. For example, the City of Houston better manages vehicle use by adding 50 existing city-owned fleet vehicles, including 25 Nissan LEAFs, with Zipcar’s FastFleet® proprietary fleet sharing technology. By using Zipcar’s FastFleet technology, the City of Houston configures its fleet footprint in real time for optimal utilization; manages preventive maintenance, fueling, billing, and fleet distribution; and uses Zipcar’s analytics with data automatically captured during every trip. Zipcar’s FastFleet technology is used in Washington DC, Boston, and Chicago where DC officials estimate that they save approximately $1 million per year using FastFleet technology.
I talked with Rick Hutchinson, CEO City CarShare, at Meeting of the Minds. As a non-profit, City CarShare actively works to make urban mobility more effective as people combine walking, bicycling, transit, and carsharing. For 11 years, they have modeled best practices, which others learn from including Zipcar, Enterprise, and independents. City CarShare promotes equity with CommunityShare and AccessMobile. They promote sustainability by taking cars off the road and adding electric vehicles.
Susan Shaheen, Co-Director of Transportation Sustainability Research Center (TSRC), has probably done more research about shared-use mobility than anyone. TSRC studies have determined that each carshare membership has resulted in at least 9 vehicles being sold, removed, or purchase-postponed. The biggest shift is one car households becoming car-free due to cars haring; 2 cars to one is another big segment. Her insights greatly helped with this article.
One million U.S. carsharing members will soon become 2 million as people save thousands per year owning one less car. University students, city dwellers, and fleets have new flexibility in getting the right vehicle when needed including roomy sedans, pickup trucks, and even electric cars. Just as we are transitioning from owning expensive computers and software to mobile use of cloud services, transportation has moved beyond just owning a car to a rich menu of transportation services.
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