What Is Car Sharing, and How Does It Work?

  • Brian Leon is a freelance automotive journalist and former Associate Editor of the New York Daily News Autos. He is currently a master student at Uppsala University in Sweden studying marketing and completing a thesis in the area of trust in autonomous vehicles.

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If you live in or around a major city, there’s a chance you’ve already sworn off traditional car ownership. In fact, independent studies show that by as soon as 2030, a sizeable percentage of the U.S. population will not own a personal car.

RethinkX, a transportation think tank in California, expects private car ownership in the U.S. to drop 80% by 2030, and the number of passenger vehicles on American roads to drop from 247 million in 2020 to 44 million in 2030. Those numbers might be wishful thinking, but the signs that car ownership is changing are all around us.

So how will we all get around with a fraction as many cars as there are Americans? As it turns out, most of the vehicles we already own spend up to 95% of their time unused. What if we could turn all of that downtime into a ride for someone else who needs or wants one? That’s the general idea behind car sharing, a broad term used to define subscription-based access to a shared fleet of vehicles.

You may be more familiar with the concept through services like Zipcar, Car2Go, and Turo. Using a mobile app or website, users can book a vehicle located near them at any time, 24 hours a day, for however long it is needed. In exchange, you’ll pay an hourly use rate and a nominal monthly service fee. Think of it as an on-demand rental car service but without those pesky lines at the airport.

Car sharing is certainly not for everyone, nor is it able to meet every American driver’s demands for vehicle use, but in the coming years, you may want to consider swapping your monthly vehicle payment for a car-sharing access fee. There are many reasons to switch to car sharing, especially if you reside in an urban area with public transportation options, but there are still some drawbacks to this relatively new alternative to traditional car ownership.

What Are the Reasons For Switching From Traditional Car Ownership to Car Sharing? Are There Drawbacks?

Honda Civic Sedan from ZipCar
Zipcar alone claims that for every one of the 12,000-plus vehicles it operates, 13 personal vehicles are taken off the road, reducing traffic congestion and air pollution in cities. (Zipcar)

If you live and work in a major U.S. city, chances are you have access to some form of public transportation. Sure, it may be crowded at peak rush hour in the morning or afternoon, but it can often get you from point A to point B without ever having to get behind the wheel of a car.

Whether it’s a bi-annual visit to Ikea or a day trip out to the country to visit family, chances are you’re probably going to need a car at some point, or at least want access to one. That’s where car sharing comes in.

As a result, many Americans in urban areas have ditched their personal vehicles in favor of a combination of public transit, rideables, and car and ridesharing. Chief among the reasons for switching is the cost of owning a car, which can be prohibitively expensive for some urban residents.

According to a AAA study, the average annual cost of owning and operating a new vehicle was $8,849, with small sedans costing $6,777 per year and pickup trucks averaging $10,215 annually. That’s a significant chunk of change and doesn’t include the cost of city parking, increased insurance rates for urban drivers, more expensive fuel in cities, and even unforeseen expenses like parking tickets. Adding all of that to the equation can make an already expensive vehicle even more costly.

With membership plans as low as $7 per month and hourly fees only when you use a vehicle – not to mention the elimination of monthly parking fees and more – car sharing is an extremely cost-effective alternative to car ownership in a city. Zipcar alone claims that it saves members up to $600 a month on vehicle expenses, as the service includes insurance, maintenance, fuel, and parking when you reserve a vehicle.

Car sharing also has an impact on problems that plague cities, including traffic congestion from more vehicles on the road as well as pollution. With fewer urban residents owning cars, fewer cars are on the road. According to Zipcar, each one of its vehicles removes 13 personally-owned cars from the road and the company’s entire fleet saves 32 million gallons of gas per year.

Of course, if you don’t live in or around a major urban area and need a vehicle to commute, car sharing is likely not the best solution for you. Shared vehicles are kept in central parking locations, so you would need a way to access one without having a car already.

Additionally, the increased popularity of car sharing can make rides hard to come by in some areas. If you need a car for a specific time, or a particular type of vehicle for moving apartments or other uncommon tasks, there’s a chance one may not be available that suits your needs, as it’s already in use or reserved by someone else.

What Are Your Options for Car-sharing Services?

Maven smartphone app photo
General Motors operates its own car-sharing service called Maven, which lets users book available vehicles from a fleet or even rent their own vehicle when not in use. (Maven)

With car sharing now more popular than ever, in many U.S. cities, there is no shortage of options. Independent companies like Zipcar, which is now owned by Avis and operates a fleet of over 12,000 vehicles globally, are popular, while some automakers operate their own services.

Zipcar alone costs $7 per month to start or $70 annually with a $25 down payment at the beginning of your service. Each time you reserve a vehicle, the hourly rate is as low as $7.75 per hour for a basic set of wheels and up to $15 per hour or more for a luxury model like a Mercedes-Benz C-Class. Fuel is included with a gas card that’s stowed in the vehicle, and while you can opt for additional insurance Zipcar covers damage up to a certain amount with a deductible that you are liable for.

Many automakers operate their own services, too, including ReachNow from the BMW Group (which includes BMW and Mini), Car2Go from Daimler (which primarily uses Smart cars), and Maven from General Motors, which also allows users to rent their own vehicles when they’re not being used.

Finally, peer-to-peer (P2P) car sharing services like Getaround and Turo allow owners of personal vehicles to rent them out to other users at an hourly or daily rate depending on the age, condition, and even desirability of a vehicle. Through these services, you can rent a 10-year-old Toyota Corolla if you just need something to drive, or you can reserve a brand-new Porsche or Tesla if you want something flashy for a night out.

As car sharing becomes more popular, new services will pop up and existing apps will expand their reach, so if you’re considering ditching your personal vehicle, it’s worthwhile to explore the car sharing options in your area.

About the Author

  • Brian Leon is a freelance automotive journalist and former Associate Editor of the New York Daily News Autos. He is currently a master student at Uppsala University in Sweden studying marketing and completing a thesis in the area of trust in autonomous vehicles.

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