Carsharing: An Economical Alternative to Renting a Car

Gas prices are astronomical, car insurance is crazy expensive, parking is scarce and stories of mechanics and car salesman gouging their customers are a dime-a-dozen. Sometimes, car owners probably wonder why they have a car at all. There has to be a better way and, these days, there just might be.

It's called 'car sharing' and it's a model for car rental that has existed in Europe in various forms for decades and has just recently started becoming popular in North America. It's becoming a more economical option for businesses that need cars to visit clients and individuals who want aCcess to their own car, but drive less than 10,000 kilometers per year.

Basically, the customer pays either an annual or monthly fee, depending on the plan, plus a one-time application fee and an hourly or daily rate that is more expensive on weekends compared to weekdays and only applies when you're driving.

For example, ZipCar is a car sharing company available across the U.S., and in Toronto and Vancouver in Canada, and the Toronto location offers both an annual and monthly plan that breaks down as follows:


All it takes to open a ZipCar is a single swipe from a plastic card and there are many locations within the community where you can park the car once you are finished with your drive.

But how does such a thing compare to car ownership or renting a car the traditional way? The following table from a car sharing research paper presented by the Victoria Transport Policy Institute in Victoria, B.C.



The research paper also showed that only 25% of expenses associated with private vehicle ownership are variable expenses, so car owners tend to drive as much as they can in order to get their money's worth. Car sharing on the other hand, allows drivers to pay as they go, which increases the variable costs to five times that of the private car at 60¢ per mile, which encourages people to use their car less, lessen their impact on the environment and explore other transportation options, like public transit.Stunningly, households that could have access to a private car, but join car sharing, typically reduce their vehicle usage by 40% - 60%. Those who couldn't afford a car, but join car sharing, typically increase their vehicle usage, but the two groups offset each other, so there's usually a significant reduction in vehicle usage overall.

About a fifth of vehicles in North America are driven less than 10,000 kilometers, particularly in cities and large metropolitan areas, where car sharing seems to make the most sense, while vehicle owners who drive longer distances may be motivated by car sharing to reduce their driving, which will make driving a vehicle that much more cost effective.

Other benefits include the following:

Increased Mobility
Car sharing provides those who can't afford to own their own car the ability to use a vehicle occasionally, which opens up their mobility, since it's usually so constrained. With access to a car on an occasional-basis, users tend to take trips that are more important to them and of higher value, while they relegate their more frivolous trips to public transit or walking.

Employment Benefits
Those who can't afford their own personal vehicle could use car sharing to go to job interviews and employment. Small businesses in niche markets can substitute an entire fleet of company vehicles inexpensively with car sharing.

Option Value
Even those who don't use car sharing, still benefit from it because of the option value -- as in, just the fact that it's out there as an option in case of emergency or a change in your circumstances.

Access Equity
Giving those with low incomes opportunities to drive a car, levels the playing field as far as access to opportunity goes because it eliminates the disadvantage of not being able to get to where you need to go.

Savings
Vehicle ownership can be a huge expense for those in moderate to low income houses. According to research, car sharing can save you between $500 and $1,500 per year, as well as parking costs and additional vehicle expenses. The avoid vehicle caretaking and unexpected repair bills all together.

Vehicle Choice
Customers can choose the vehicle that can meet their needs for the moment. From Vans and trucks to sedans and minis -- most dealerships have it all. In addition, customers may avoid choosing heavier gas guzzlers when a smaller car is available and more adequate for their situation.

Environmental Benefits
Like carpooling, car sharing can reduce congestion, road repair and parking expenses. Urban freeway congestion costs are estimated to average 6-9¢ under moderate congestion (50 mph), and 37¢ when congestion is heavy (traffic flows at less than 40 mph). An average vehicle receives $414 to $1,232 per year in parking subsidies.One study found that local governments spend about $275 per vehicle on local roads and Traffic services that are funded by general taxes. Then there's the issue of general air pollution, which is of course reduced by car sharing.