Car-Sharing Programs (Short-Term Rentals), AKA Mobility Services, Proliferate, Business and Industry Trends Analysis

Car sharing has become a big business in North America and Europe.  This practice is called car sharing because the organizations providing the cars enable short-term, on-demand use, without the burdens of car ownership. 

The costs of buying, operating, insuring and parking a personal automobile are extremely high.  At the same time, consumer attitudes and behavior regarding transportation are evolving rapidly.  Surveys in mature economies such as Japan show that a relatively large number of young people have no interest in purchasing a car.  The percentage of people in major cities in the U.S. and UK who do not own cars is rising.  The term Mobility Services is widely used to describe car sharing strategies like ZipCar, ride-on-demand systems like Uber and other alternative personal transportation systems.

Autonomous vehicles capable of driving themselves will have very profound effects on automobile manufacturing, usage, sales and ownership patterns.  At least in dense urban environments, the result is very likely to be a large proportion of individuals who opt to use shared vehicles rather than user-owned cars.

A car sharing pioneer called Zipcar (www.zipcar.com) offers drivers inexpensive alternatives to owning their own cars.  Zipcar members are issued smart cards that allow them to unlock Zipcar vehicles with a wave of the card over the windshield.  The cars are equipped with pre-paid cards for use at gas stations and insurance coverage; and drivers are allowed 180 miles of driving per day.  Business boomed during the firm’s early years, as gas prices escalated to dizzying heights and then again at the onset of the global economic crisis.  In March 2013, Avis Budget Group completed its acquisition of Zipcar for $491 million.

Zipcar is utilizing innovative, densely populated locations as pick up spots, such as garages in major hotels and university campuses.  The firm spawned a number of similar offerings from competitors, including rental car firm Hertz Corp.’s Hertz 24/7 (formerly Hertz on Demand and Connect by Hertz) and Enterprise Rent-A-Car’s CarShare (formerly WeCar).  Hertz is taking the car sharing business so seriously that all vehicles in its U.S. fleet are equipped with devices that allow customers to use the internet to reserve and unlock a rental car from Hertz 24/7.  There are no membership or annual fees, and users earn points in the Hertz Gold frequent renter program.

Luxury versions of car sharing are also available in select cities, offering vehicles for manufacturers such as Mercedes-Benz and Porsche.  For example, Turo Go is an app for startup rental company Turo for luxe car shares in Los Angeles, San Francisco and San Diego.  A number of car share companies use automotive subscription service software from Clutch Technologies (www.driveclutch.com ).  Many of these services provide forums in which owners can list their personal vehicles for rent.