Innovative new car-sharing businesses are changing the way we think about driving—and owning cars.
By **Sarah Jaffe**
By arrangement with Alternet.Org.
We already know that cars are contributing to global warming, polluting the air, and hellish traffic jams in the world’s biggest cities. We know that since the economy crashed in 2008, more and more people in the U.S. and around the world are struggling to pay bills, and we know that gas prices just keep rising.
Car ownership, it’s becoming clear, simply isn’t a sustainable way of life. But with an ongoing budget and revenue crisis on the federal, state and local levels, with conservative governors rejecting stimulus money for high-speed rail, it may be a while before we see the investment in public transit that it will take to fully break from the automobile.
Into the gap have stepped a number of innovative car-sharing companies and programs, allowing licensed drivers to pay fees less than traditional rental car companies and often access vehicles conveniently parked in their neighborhood. Each shared car, it’s estimated, keeps an average of 15 cars off the road, allowing drivers to access a car only when it’s specifically needed.
ZipCar, which calls itself “the world’s leading car-sharing network,” has over 560,000 members in 60 cities and on 230 college campuses. Founded in 2000, ZipCar has over 8,000 cars, and options of over 30 makes and models.
To rent a Zipcar, you join at the website and receive a “zipcard” in the mail or from its office. That card is all you need to unlock and start the car—sign up to reserve a car online or from a smartphone, and your card will be activated to use the car for that time period. Gas—a gas card is included with the car—and insurance are covered in your fee, which starts at $8.50 for an hour and $66 for the day. When you make your reservation, a map shows you where your car is parked, and you return it to its designated parking space when you’re done.
Zipcar is less hassle than a traditional car rental, though its daily rates rival those of many big rental companies. Convenience is a factor, as is the fact that most car-sharers use the car for short trips on rare occasions—to go to the grocery store, perhaps, or the big box store on the edge of town.
Zipcar is a for-profit company, and turned heads with its initial public stock offering this past April, when it raised $174.3 million. It’s not yet profitable, though, and hasn’t maintained its stock price. (Henry Blodget at BusinessInsider is skeptical of the value of that 50 percent jump in stock price at the IPO.)
Zipcar isn’t the only option. In Philadelphia, PhillyCarShare operates as a nonprofit. “We really see ourselves first and foremost as an environmental organization,” marketing manager Heather Nawoj told me, explaining that by being a nonprofit, PhillyCarShare can focus on its mission of making cars accessible to the entire city, rather than just where they can make the most money. Combining this strategy with a debit-billing system and lower prices than Zipcar, PhillyCarShare encourages its users to drive less, but makes driving accessible to many who otherwise wouldn’t have a car at all.
A study by Econsult, a Philadelphia consulting firm, found not only that PhillyCarShare saved its members about 17 million miles of driving, 770,000 gallons of gasoline, 40,000 barrels of oil, saved the city an estimated 47,000 hours of traffic delay and saved the air 7,000 tons of carbon dioxide and other pollutants; it also saved each member an average of $2850, providing an increase of $13.2 million in purchasing power. If this holds true in other car-sharing cities, car-sharing programs are an economic stimulus all their own.
Its website says:
“Assuming an average marginal tax rate of 25 percent, this is like PhillyCarShare members getting an aggregate $18 million annual increase in their salaries. Those members are then able to spend their savings locally, thus supporting 150 jobs in the city.”
And coming soon, in partnership with the city of Philadelphia, PhillyCarShare is bringing electric cars to its fleet. According to Nawoj, the city has gotten a $140,000 grant to create electric charging stations, and the electric cars are perfectly suited to the type of driving most PhillyCarShare users do: short trips and errands around the city.
A study by the Philadelphia Parking Authority found that some 60 percent of Philly private cars don’t move for at least three days straight, Nawoj said, but for drivers who just don’t want to give up their private car, there’s yet another option.
RelayRides, based in Boston and now in San Francisco, allows car owners to rent out their own vehicles by the hour. The owners set their own rates, starting at $6 an hour (once again, less than Zipcar) and get 65 percent of their take, with 15 percent going to RelayRides and 20 percent going to insurance. The service provides insurance (up to $1 million) and a screening process as well as the technology to track the cars’ use, but it mainly serves as a way to connect people to people. It’s a step in between Craigslist and a company like Zipcar.
[W]hat about a shared pickup truck to hit the summer yard sales or pick up your Craigslist free items?
RelayRides Founder Shelby Clarke told Wired:
“Consumers are increasingly rejecting traditional forms of ownership, preferring to borrow rather than buy,” he said. “RelayRides builds on this changing consumer behavior by enabling neighbors to support each other, both financially and practically.”
In March, RelayRides got some serious funding from Google Ventures and August Capital, and without the overhead cost of buying cars, a lot more of that $5.1 million can go into expanding, possibly to new cities.
Scott Kirsner at Boston.com reviewed his RelayRides experience before the company’s official launch, and noted the problems with the private car he borrowed. And yes, unlike Zipcar or PhillyCarShare, your experience will likely vary greatly based on your neighborhood and the owner of the car you choose to borrow. If you live in a relatively pricey neighborhood, the odds of your neighbors owning newer, more expensive cars are probably higher.
And of course, the idea of lending a stranger your car might be unnerving. But with the economy providing a crunch, will the economic incentive push people over the edge? Or is Clarke right that it’s a shift in consumer behavior, perhaps driven by a combination of economic necessity, environmental concerns, and the changing technology that we’re becoming more and more comfortable with these days?
Without the Web, of course, it would be difficult to run most of these organizations and nearly impossible for RelayRides, which is itself a sort of social network. It doesn’t provide cars, after all, just the means by which people—the “neighbor to neighbor” of its tagline—can contact one another to rent their cars out.
The Economist, not exactly known for its share-alike ethos, noted:
“Attitudes to conspicuous consumption are changing. Thorstein Veblen, who coined the term, argued that people like to display their status by owning lots of stuff. But many of today’s conspicuous consumers—particularly the young—achieve the same effect by virtual means. They boast about what they are doing (on Twitter), what they are reading (Shelfari), what they are interested in (Digg) and whom they know (Facebook). Collaborative consumption is an ideal signalling device for an economy based on electronic brands and ever-changing fashions.”
They use the term “collaborative consumption” for more than car-sharing; it’s taken from the title of a book by Rachel Botsman and Roo Rogers, What’s Mine Is Yours: The Rise of Collaborative Consumption. But in addition to noting the way social networking has shifted our status symbols, they make a more interesting point: “Social networks are helping to lower one of the biggest barriers to “collaborative consumption”—trust.”
It takes trust to let a stranger drive your car even if she’s paying you for it. And maybe it took the Internet to help shift our focus from what we own to, in whatever strange way, who we are. It took a while for the Internet to go from the days of pseudonyms and screen names to real names and check-ins at real places. The Internet has gone from being a way we connected with strangers we vaguely thought of as creepy to a way we meet future mates and find out the latest hot night spots. Its community is leaking into the real world.
And as Deanna Zandt points out in her book Share This!, “sharing” is the way we create social capital on the Web. Online, it’s mostly information that we share, but after years of such sharing, is it such a big leap to sharing possessions?
In addition, could lowering the value of car ownership as a status symbol and replacing it with an ethos of sharing actually start to change our consumption-obsessed society? What if social capital was accumulated not just by purchasing a greener car for your personal use, but sharing that greener car with others for a fraction of what it would cost them to buy it?
Author Douglas Rushkoff, in Life, Inc., included the massive shift to car ownership in his chapter “The Ownership Society,” detailing the way cars helped “to accelerate the conversion of place to property.” With car sharing programs, are we seeing a conversion in the other direction? Is sharing a car, whether it’s owned by a company, another person, or your own, a step in the direction back toward place, or toward community?
Rushkoff notes that the car is a suburban phenomenon, having developed hand in hand with white flight and the boom in property ownership. A distant suburban home requires a car to get you back and forth from it; car-sharing services require a city, or at least a dense enough population that scattering shared cars in parking spaces around town will still see plenty of use. Where would you park a ZipCar in a gated community? And a shared car isn’t going to replace your morning bus or subway commute—it’s far too expensive for that. “We really see ourselves as another arm to public transportation,” Nawoj, of Philly CarShare, agreed.
Cars were and are also subsidized by government funded, built and maintained roads and functioned as an alternative to mass transit. They also managed to neatly separate the haves from the have-nots. But as the economic crisis has compressed the middle and working classes while increasingly separating the rich, and as being “green” is becoming not just a political belief but a status symbol itself, cars are becoming less an indicator of class and status.
When considered as a cheaper alternative to car ownership, in a world designed to cater to the needs of car owners (and the car companies that profited off selling cars), car-sharing programs provide outsize benefits to those who could never afford to buy a car, whose credit is bad or nonexistent, or those who bought a car only to find their economic circumstance rapidly changing.
A low-cost shared car, for instance, could carry residents of a food desert to a good—and cheap—grocery store that’s normally impractical for them to access. IKEA in Brooklyn may have taxis and delivery options, but what about a shared pickup truck to hit the summer yard sales or pick up your Craigslist free items? A truly accessible car-share service could be life-changing right now as well as providing the cumulative environmental benefit of taking thousands of cars off the road.
As Philly Car Share’s website declares, “We view decreasing auto use as a social benefit, not as a threat to the bottom line.”
Copyright 2011 Tara Lohan
By arrangement with Alternet.Org.
Sarah Jaffe is an associate editor at AlterNet, a rabblerouser and frequent Twitterer.