Many of us previously took great pride in owning and running a car. And for some vehicle ownership remains a necessity, due to home location or work. But an increasing section of the urban population sees car ownership as a burden to be outsourced. Car sharing companies have answered the call, enabled by shifts in technology and attitudes. But is their growth good news? Read on to discover the benefits of car sharing (and some issues too!).
Car ownership is inefficient and costly
For most people, private car use is fundamentally inefficient. It’s an asset that is utilised on average 5% of the time. However, the personal freedom, convenience, and productivity that it facilitates, can make it worth owning a car. And sometimes our work or living arrangements require it. If you wanted the perks of ownership, there wasn’t much of an alternative. Public transport can be slow and indirect, taxis are expensive, and lifts from friends with cars can only get you so far. So many of us accepted the expensive security of car ownership.
But now, in most urban areas, car sharing can replicate the perks of car ownership without the costs. This is possible because of a few things:
- Ideal car sharing services are inherently efficient. Each car sharing vehicle is used much more often than a private vehicle. And the operating costs can be shared between many users, instead of a single owner.
- Companies have developed car sharing technology that enables a reliable, convenient, and affordable user experience.
So car sharing can be successful when deployed in the correct market. Meaning where population density is high, complimentary means of public transportation are available, and where street parking is available. Other factors include a supportive local government, having a young population, prioritising a city lifestyle, environmental awareness, a lack of ride hailing services (Uber, Lyft), and limited taxi service.
Car sharing reduces car ownership
Various organisations and studies show that car sharing services can result in lower car ownership. In Bremen Germany it was claimed that 5,000 fewer private cars were used due to a car sharing fleet of around 350 vehicles. That means 1 car share vehicle can replace about 13 private vehicles. This is similar to previous studies focusing on North America. These studies suggested 1 car share vehicle can replace between 7 and 13 private vehicles.
Reducing the quantity of cars on the road is generally thought of as a good thing. Fewer cars on the road means fewer miles driven. The cars left on the road may actually drive more miles, being better utilised, but overall fewer miles will be driven by the local population.
The benefits of car sharing, for society
- Less traffic and congestion.
You’re going to spend less time stuck in traffic. You’re going to get to where you want to go, with less risk of a delay.
- Lower wear for roads.
Fewer vehicles partially correlates to lower road wear. So we can spend tax money on something else. This might be taking better care of the roads we already have, or improving other public transport services. Or it could be something else entirely.
- Less air pollution.
This is a fundamental environmental benefit of car sharing. Fewer vehicles and more modern vehicles will improve local air quality. Cleaner air means a better time for those with certain health conditions. So less tax money would be spent on those suffering from the effects of air pollution, as well as conditions resulting from air pollution.
- Less need for parking.
If the volume of traffic reduces, current parking will be more easily accessible. We may want to convert urban spaces from car parks into residences or other businesses.
- Development of other transport and mobility infrastructure.
Car share members tend to do walk, cycle and use other modes of transportation more often. This can increase public support for developing infrastructure for these modes of transport. Think bigger pavements and sidewalks, more dedicated cycling paths, more bus lanes.
- More fleets of newer vehicles.
Car share vehicles are used more than private cars, so the car share vehicles are replaced more frequently. Newer cars tend to be more efficient, cleaner, and quieter. So more cars on our roads will be more efficient, cleaner, and quieter, than if we had more private cars.
- New technology is adopted faster.
As explained above, car share vehicles are replaced more frequently than private vehicles. So if there’s been a technological shift, this can be more quickly integrated into society. The adoption of electric vehicles (and retiring of fossil fuel vehicles) could happen much faster with widespread use of car sharing services.
- Better acceptance of mobility as a service.
Car share members feel less need to own vehicles, and are more accepting of mobility services. When automated cars and more efficient transport solutions arrive, car share members are likely to be more accepting.
The benefits of car sharing, for the individual
- Reduced cost.
Car sharing enables you to avoid the fixed overheads of car ownership:
- Monthly payment or capital purchase
- Annual testing and certification
- Roadside assistance
- Owning a car requires upfront costs.
- You may use the car because you’ve already paid some costs – you’re motivated to use your investment. Aside from fuel, or environmental concerns, there is little incentive to limit your use. But with a car share service, there is often zero or a very small overhead, and you pay per journey. So there is a clear additional cost for every trip, which may motivate you to question its necessity.
- Less stressful to manage.
Buying and maintaining a vehicle can be stressful. At best it’s time consuming, and at worst you might get ripped off. You want to get a good deal on your car insurance. And you need to find a trustworthy mechanic. Well, car sharing eliminates all of those risks and hassles.
- Health benefits.
Car share members typically use other modes of transport more, including walking and cycling. This increases the amount of exercise that someone undertakes, which is great for your health.
It’s not always required, but having the choice to sometimes use a private mode is transport is good. Car sharing provides a method of private transport without the inefficient burden owning a car.
- Personal freedom.
Sometimes you just need to rebel, right? Screw the bus timetable, I’ve got plans! Well car sharing gives the option of personal freedom to go where and when you like, without needing to own a car.
- Improves access for all income levels.
Not everyone can afford to own a vehicle. The monthly payments may be too high, or the lump sum too much. But car sharing services only require small payments in accordance with how much you use it. This enables access to car mobility for all income tiers.
Where the car sharing business model struggles
As discussed above, the car sharing business model requires the correct market conditions. It will likely be unsustainable (in the commercial sense) where market criteria are not met.
The main killer is where there is a low population density, such as small towns and villages, particularly in rural areas. The distances involved are too great, and there’s too few users to make it work. It can also fail where the residents or local government are uninterested in facilitating such developments. There is only a certain amount of time available for issues, and this just isn’t important enough for a lot of people.
Business, institutions, or local government in rural areas may still have a robust case for car sharing. This is especially likely where small fleets of vehicles are already used. These groups are probably already undertaking car sharing of some kind, but may benefit from streamlining the process with additional technology or support.
Successful car sharing business models require adequate amounts of parking. This may choke development even when all other pillars required for success are present. North America doesn’t generally have this problem. But you may associate it with cities in other parts of the world, particularly in Europe, South America, or Asia.
That said, Amsterdam in the Netherlands is a city with limited parking, as well as obstacles like cycle lines and small roads. And electric car sharing thrives there!
Car sharing issues
- Demand at peak times.
The demand for services is rarely constant. People tend to want to use cars at similar times (rush hour, school run, holidays etc.). So demand for cars varies depending on the time of the day/month/year. Ensuring enough vehicles to keep everyone happy can be tricky. But this can be solved by more vehicles, adequate information on availability, and also using other complimentary public transport. Large differences in peak and off-peak demand introduces inefficiency into the system. But it doesn’t change the big picture of car sharing.
- Geographical coverage.
Car share users will always want to be able to use the car in as wide an area as possible. Increasing coverage also increases the user base, but must be balanced by the ability of the company to adequately support the growth. Companies must continue to expand provide access for as many customers as possible.
- Vehicle availability.
A common complaint against the best car sharing services is that vehicles aren’t available when needed. Too many vehicles will result in less utilisation and higher costs for users. Too few vehicles will result in frustrated customers. Companies must find a robust optimal point between commercial and service demands.
- Accuracy of app data.
The car sharing technology enabling the service must be accurate and reliable. People must be able to trust that when they book a car, it will be available. Early users complained of cars being shown on the map and then not being there.
- Access to support.
If a user has an issue, they must be able to contact support staff quickly. If I’m on a journey lasting 15 minutes, I don’t want to spend 10 minutes on the phone waiting to report some car bodywork damage. Companies must ensure sufficient well-trained staff are available.
- Fewer cars manufactured.
One study estimates that 3% of the current car fleet could be sufficient in future. This obviously isn’t conclusive, but does suggest many fewer cars would be sufficient. People who work in the car industry as well as the companies they work for will not want to produce fewer cars. Mechanics garages may see a drop in workload. They may oppose new laws or changes which will negatively affect their business model.
- Not using public transport.
Ideally, all journeys that can be made by public transport should be. However there will be a percentage of trips that could be made by public transport, but aren’t because of the convenience of car sharing. We hope this effect can be minimised by positive messaging around public transport, and ensuring the service is as good as possible.
- Less tax raised from drivers.
Drivers pay a lot of tax through fuel and car related service purchases. A significant reduction in drivers and/or driver miles will likely reduce revenue from these sources.
Car sharing is a force for positive change in our urban areas. It can replicate the benefits of privately owned vehicles, whilst reducing the costs and stress associated with car ownership. Also, it can reduce the quantity of vehicles in our towns and cities and reduce the total miles driven by residents. This will likely benefit our wallets and purses, as well the health of our families and communities. By supporting and growing these services, we will likely see faster implementation of electric vehicles and social infrastructure.
I recommend supporting the car sharing schemes in your area. If you live in Vancouver BC, why don’t you sign up with Evo, Car2Go, Zipcar or Modo? These companies offer schemes that suit both one-way and two-way trips, both around BC or further afield. Read of our complete guide to car sharing in Vancouver to find out the best car sharing company for you. If you don’t have a lot of time, check out our car sharing Vancouver comparison table.
If you sign up with Evo and Car2Go using my discount codes, there are no monthly recurring fees and the sign up costs are zero. You even get some free driving minutes.
- Car2Go promo code Vancouver – ‘JOINC2GVAN_luke@brightaroundthecorner.com’, get to Car2Go here.
- Evo promo code Vancouver – ‘C000137778’, get to EVO here.
Signing up to both gives you access to a massive fleet of 2300 vehicles in Vancouver! Also remember Car2Go is also available in different international locations. So you can use your membership in other urban areas around the world.
There’s also Zipcar as well as Modo who are two-way providers. They offer services closer to classic car rental but with bookings by the hour.
What do you think? Have we missed out something? Let us know your opinion in the comments.