If you can’t do without your car, and just the idea of sharing a ride with a stranger gives you the shivers, car-sharing is probably not for you. Undeniably, it’s a trend on the rise. In fact, elements of car-sharing have existed for decades already, but it’s only in the recent years that the concept has really come to the fore, underpinned by new technology, growing urbanization and the sharing economy.
Car-sharing exists in two main forms:
- Traditional car-sharing — Where cars belonging to a centrally owned fleet parked on the street can be located, unlocked, used and left behind (Zipcar, for example).
- Taxi-like ride-sharing — When private drivers pick up customers using their privately owned vehicles (Uber, Lyft, BlaBlaCar).
It is estimated by ACEA that the number of car-sharing club members (excluding ride-sharing here) has increased from around 350,000 in 2006 to nearly 5 million in 2014 — an average annual growth rate of nearly 40 percent, with Europe and North America as the largest markets. While this is still a portion (less than 8 percent) of new passenger cars that are registered every year (65 million in 2014), many believe it is just the tip of the iceberg. Navigant Research suggests members could increase to 26 million by 2020.
Keen to reduce carbon emissions and traffic congestion and improve urban mobility, policy makers and local councils have also (mostly) bought into the idea. It’s easy to see why: Sources suggest each shared car replaces 10 to 15 personal cars on average, potentially freeing up to 45 parking spaces at various times of the day (home-work-retail). Municipalities are hopeful that usage will also drive wider behavioral changes. In a recent study of 7,000 respondents in North America, 50 percent either sold a car or didn’t buy one because car sharing was available.
To entice new and existing users, some producers are looking to make the car-sharing service more flexible and aligned to users’ everyday transportation needs. For example, Ford (“GoDrive” in London) and BMW (“Drive Now”) are piloting one-way, “by-the-minute” car-sharing schemes where the car doesn’t need to be returned to the same location as with traditional round-trip models.
Many of these schemes, such as BMW’s “Drive Now,” utilize electric vehicles and give the driver the liberty to park the car anywhere within the business area and not just into designated space — a system known as “free-floating.” With electric vehicles, drivers get a bonus in the form of free drive-time to plug the car into a recharging station when the battery runs low.
The challenge for many urban car-sharing schemes is securing enough parking space to make it work. With electric vehicles, the availability of chargers is also important as this affects effective range. Local governments clearly have a role to play here. The London car-sharing market, for example, has a reputation for being difficult to crack because of the city’s fragmented administrative structure composed of 33 boroughs, making it difficult to create a city-wide parking plan. Car-sharing businesses are cash-intensive, and scale is also essential to sustain operations. Car2Go, Mercedes’ car-sharing arm, officially exited the U.K. market in 2014 due to difficulties in scaling its business.
Ride-sharing is also thriving. While it has recently made the headlines mostly for the controversy around Uber (which is on track to reach a valuation of $50 billion), ride-sharing promises to shake the transportation industry even more. Some ride-sharing services, for example, are increasingly competing with other means of transport (such as trains and planes) for longer, city-to-city journeys and not just urban rides. It’s telling that in a recent interview, the CEO of French national railway company SNCF singled out BlaBlaCar, a French ride-sharing services provider, as one of its biggest competitors.
When you read about the frontiers of the industry, driverless cars invariably tend to pop up often. Many industry players are keeping a close eye or directly investing in this concept: Mcity, a fake town built by University of Michigan researchers to test the driverless cars has just opened, and Google thinks these could be available to consumers as early as 2020, even if a recent U.S. survey highlighted a general skepticism towards the technology, with nearly 50 percent deeming it unsafe. Time will tell how adaptable this significant step in change in behavior is for European, let alone, U.S. markets.
While we wait for driverless cars, carmakers’ growing interest in car-sharing clearly underlines a shift in the way they see themselves in future: increasingly as providers of mobility solutions rather than just car production for sale. Cars are not going away; people will still buy them. But car sales volumes will probably matter less to carmarkers in the future, to the happiness of some.