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The Car Sharing Trend

February 8, 2013

By Steve Wright 

Urban Dwellers Seek Inexpensive Alternative to the High Price of Vehicle Ownership


A young couple in the city uses transit to get to work, but needs a car on the weekends. A 30-something lawyer lives downtown without a car, but still needs to pick up clients and travel for cases. Or maybe, a single parent doesn’t have the funds to own a car, but just cannot manage more than two bags of groceries on the bus. Do these scenarios sound familiar? Now, there is a simple solution, of an environmentally-friendly, walkable-neighborhood-enhancing trend, called car sharing.

Car sharing is rapidly growing in the United States as a way of reducing the high cost of buying, insuring, garaging and maintaining a car with the added benefits of meeting smart growth needs.

It’s a service that provides members with access to a fleet of vehicles on an hourly basis. Members reserve a car online or by phone, walk to the nearest parking space, open the doors with an electronic key card and drive off.

Members are billed by the hour or by a combination of an hourly rate plus mileage. Car sharing can substitute for car ownership, especially for those who can commute to work and shopping by taking transit, walking or bicycling. At the workplace, it provides access to a vehicle for business use and personal errands during the day, allowing employees to avoid driving to work — which in turn reduces traffic congestion.

Zipcar is by far the nation’s largest for-profit car sharing service. Since 2004, Zipcar has experienced 100-per-cent-plus growth annually in its membership base. In a difficult economy, car sharing is on the rise; more than 10,000 new members join Zipcar’s service each month.

Unlike rental cars that come with lots of extra charges, car sharing is all-inclusive. Zipcar’s rates start at $6 per hour and include gas, parking, insurance and maintenance. Zipcar offers more than 30 makes and models of self‐service vehicles by the hour or day to its 350,000members. It has 6,000 cars located in urban areas and college campuses throughout 28 North American states and provinces.

Car sharing has become so popular that auto giants Hertz, Enterprise, U-Haul and Daimler have jumped into the business alongside other successful nonprofit car sharing organizations in several major cities. 

With rates starting at $4.45 per hour plus 25 cents per mile and a fleet of 250 vehicles ranging from super fuel-efficient hybrids to trucks for hauling large items. 

PhillyCarShare is one of the most successful nonprofit car sharing organizations in the United States.

In addition to individual consumers, PhillyCarShare has developed a substantial business clientele, with more than 1,200 businesses using the pay-by-the-hour service.

“Several large REALTORS® in the Philadelphia area use PhillyCarShare,” PhillyCarShare Executive Director Gerald A. Furgione said. “They use them for picking up clients, for doing business. They also show people newly moving to the city that they can have access to a car without making car payments, insurance, paying for garaging, maintenance, gas and parking.”

Like most car sharing firms, PhillyCarShare has worked with the city of Philadelphia to get reserved on-street and garage spaces for their vehicles at a nominal price. The various vehicles are near transit stations and areas of high urban density.

“People can park our cars closer to their house [in reserved car sharing spaces] than they could find a spot for their own car,” Furgione said. “They save money and find they can buy more house. They also cut down on emissions — which is very important to many city residents and all of us.”

PhillyCarShare also has worked with more than 100 local merchants to provide its members with discounts at everything from comedy clubs and restaurants to hair salons, lawyers and accountants. Furgione said well-marked spaces and logos on cars are just a part of the marketing for the growing trend.

“We partnered with the city of Philadelphia with a major program that helped them reduce their feet cars by giving city employees access to PhillyCarShare cars,’’ Furgione said. “The city reduced its municipal feet by 330 cars and saved more than $6 million over a four-year period. Now several cities are following that lead.” 

As managing director of Brandon Green Companies Commercial Real Estate and Investment Group, Washington, D.C.-based REALTOR® Ken Rub can certainly afford to own a luxury automobile. In fact, he had a beloved convertible and owned a parking space in his apartment building — but he gave them both up and traded them in for a Vespa scooter, public transit, healthful walking and a Zipcar membership.

“I had a convertible that I loved, but I had a $600 per month payment, $200 per month insurance — with maintenance, it was costing $900 a month at least— and I was using it just once or twice a week,” Rub said. “For Zipcar, I pay about 11 bucks an hour and my monthly usage costs maybe $200 a month total — with gas, insurance and everything included.”

Rub lives within a mile of his office and has good access to Metro train stations for community traveling. He uses car sharing almost exclusively for business — driving clients to look at commercial properties, foreclosures and other real estate investment opportunities.

“I definitely bring up car sharing as an asset to a property, when there’s a good Zipcar spot nearby,” he said. “Right now, I have an 8,000-square-foot space that has been used as a charter school and day care. But it has very tight parking. So I sell the availability of transit and Zipcar right across the street. That way, workers can take transit, save the $200 a month they’d be spending for a parking space, and have Zipcar to use if an emergency comes up and they need access to a car.”

Cassandra Allen, U-Haul U Car Share program manager, said studies show the average cost to develop one new parking space can be upwards of $50,000. Car sharing can reduce that spiraling urban cost while adding greater value to public transportation — “so that the idea of having fewer cars on the streets can become a reality.”

“With the number of residents increasing each year, cities are faced with limited resources to make room for additional cars on city streets. It makes sense for cities to be creative and innovative in their attempts to meet the needs of residents and be sensitive to the community and environment around them,” Allen said. “This need has spurred new forms of transportation and greater sustainability in the way people go about their daily commute. Car sharing meets both needs for new transportation and greater sustainability.” 

Allen said U-Haul U Car Share is actively pursuing contracts with universities. She said some car sharing companies do not accept members under 21 years of age, or require drivers 18 to 20 to use their own insurance, while all members 21 and over are covered by the free inclusive insurance.

U Car Share covers younger drivers and doesn’t charge a yearly membership fee, making its service very attractive to university students. “Universities are the best place to plant the seed for car sharing as a part of lifestyle choice,” Allen observed.

“Car sharing is a great savings mechanism for cities and universities,” she said. “Institutions can save money through car sharing by reducing the need for additional parking structures. Car sharing reduces parking congestion by taking vehicles off the road — one car share vehicle can take 15-20 personally owned vehicles off the road, thus redirecting those funds to more revenue-generating projects.”

Salt Lake City entered into a two-year agreement with U Car Share and agreed to provide on-street parking spaces at no cost. The city also modified its laws to permit the car sharing vehicles to be parked in the same parking stalls for periods longer than 48 hours. The Utah Transit Authority and the University of Utah also entered into separate two-year agreements with U Car Share to provide car sharing services on their properties.

“Car sharing is beneficial to Salt Lake City for the following reasons: it supports the long-term economic, environmental and social sustainability of the region through balanced transportation that encourages wise land use and increases public transportation connections and mobility across the Wasatch Front,” said Salt Lake City Mayor Ralph Becker. The Wasatch Front includes Salt Lake City, Provo and Ogden, where about three-quarters of Utah’s population lives.

“Car sharing helps improve air quality by reducing the number of vehicle miles traveled; provides an alternative to the high costs of owning a personal vehicle; encourages more transit-oriented development and multi-modal travel; eases road traffic congestion and demand for new   parking; and longer term — may possibly replace some dedicated fleet vehicles with shared cars.” 

Jim Sebastian, transportation planner for the District of Columbia Department of Transportation, said the District wanted to promote car sharing so much, that it granted 86 valuable on-street spaces for free to Zipcar and Flexcar in 2005. The District also provided large orange poles to identify the reserved spaces and prepared car sharing brochures. Car sharing has grown so much in the last 5 years — Zipcar merged with Flexcar and has hundreds of private spaces for cars in D.C. — that now the District is looking at charging a fee for the on-street spaces.

The District of Columbia requires that car sharing companies place cars in each of its eight wards — ensuring that the benefits of car sharing can be accessed by low-, medium- and high-income neighborhoods.

“We understand Zipcar has done well in lower-income areas,” Sebastian said. “Car sharing users usually help cut down on traffic congestion because they are paying per trip, they walk and use transit more than driving. Even if you use it every day for an hour a day, car sharing adds up to about $4,000 per year — about half the total price of car ownership, parking and maintenance in an urban area.

“From our experience, car sharing integrates well with an urban transportation system,” he added. “It works especially well for cities with limited space for parking because there may be 20 members sharing one car versus 20 individual cars on the street.”

Connect by Hertz is in many areas including New York, Boston, Chicago, San Francisco, several college campuses and major cities in Europe. Griff Long, senior director of global car sharing, said Connect by Hertz started with 40 cars in 10 locations in New York and quickly grew to more than 350 cars in about 100 locations.

“While operating for a little more than one year, we’ve signed on more than 6,000 members in New York City alone,” Long noted. “We also notice that some members are car owners, but use Connect as a second car, or to simply try out a vehicle they have always wanted to drive, like a Smart Car or Mercedes.”

Connect cars are all equipped with NeverLost®, Hertz’s in-car navigation system, an iPod adapter and an in-car system that provides drivers with the ability to interact with Connect by Hertz representatives.

Long said the average car owner spends at least $700 to $800 on payments, insurance, maintenance, parking, gas, etc. per month per car while often driving for only an hour a day.

“Regardless of the location — urban, suburban or rural — the benefits of car sharing are the same. It is an alternative route to owning a car and simply paying for the usage of the car as opposed to all of the expenses that are generally included [in automobile ownership],”Long said. “For those who are conscious of their ‘carbon footprint’, car sharing is a means to reduce it with eco-friendly cars.”

Daimler’s “car2go” service launched in Austin, Texas, with several features unique to car sharing. Members are not required to commit to a specified time or location to return the vehicle, but rather have the flexibility to use the vehicle as needed in an open-ended fashion. The member is charged for actual usage per minute, with discounted rates for hourly and daily use. Rates include costs for fuel, parking, mileage, maintenance and insurance.

The car2go feet of free-floating, low-emissions, fuel efficient (41 mpg), self-service “Smart for two” cars is distributed all over the city. The Smart for two cars — the most fuel-efficient non-hybrid vehicles in the United States — can be accessed spontaneously, or reserved up to 24 hours in advance. For “on-demand” access, members simply swipe their membership card against the vehicle’s windshield.

More than 200 car2go vehicles are accessible to the13,000 city of Austin employees for both business and individual use, making it one of the largest deployments of fuel efficient vehicles in a car sharing program in a single North American city. Anyone with a car2go membership can easily locate available Smart Cars by using the Internet, a mobile device, or the car2go call center.

Zipcar members report spending, on average, about six percent of income on transportation, compared to the U.S. average of 19 percent, said Zipcar spokesman John Williams.

“For anyone looking to decrease monthly expenses, Zipcar represents a great option,” said Williams, who said many customers write to the company to praise the money it saved them. “A family in Seattle wrote to us to let us know that thanks to Zipcar, the family sold their second car and due to those savings the wife was able to cut back her hours to part time so that she could spend more time with their infant. To be able to directly affect the quality of that family’s life is very powerful.”

Zipcar is most successful working in tandem with other transportation and infrastructure providers, Williams explained, noting the company partners across the “value chain” with bike clubs, ridesharing organizations, government agencies, parking facilities, transit authorities and more.

“We know that Zipcar’s vision is a world where there are more car sharers than car owners in major cities around the world,” he said. “Will that be true in a decade? We hope so!”

 

Steve Wright frequently writes about smart growth and sustainable communities. He recently participated in the prestigious Forum on Land and the Built Environment: The Reinvented City sponsored by the Nieman Foundation for Journalism at Harvard University, Lincoln Institute of Land Policy, and Harvard University Graduate School of Design. Contact him at: stevewright64@yahoo.com.