Services such as ZipCar, DriveNow, and Car2Go are in, or planning to expand in, many of the larger cities in the United States. The concept is simple: Find a car, drive to where you need to go, park your car, and move on. Some companies, such as ZipCar, require the car to be returned to the same place where it was rented while other companies allow for the car to be left wherever it was parked.
BMW owns DriveNow and Daimler, which owns Mercedes-Benz, owns Car2Go. Both companies have sizable investments in the short-term car rental business, but how viable is car-sharing when compared to car ownership?
It’s pretty obvious that carmakers are concerned with the car-sharing concept. They wouldn’t have bothered building businesses in the area if they didn’t think car-sharing could keep people from buying a new vehicle.
Automakers know there isn’t a need for people who live in big cities to own a car because they can commute on public transportation, on foot, and with bicycles. Owning a car is too much of an investment considering most big-city residents don’t have a good place to store it and driving can add untold numbers of hours to a commute.
Rather than trying to convince big-city residents to buy a car, automakers are exploring how to get them to pay for car usage on an as-needed basis. ZipCar charges a monthly fee and an hourly rate, DriveNow rents BMW i3 electric cars by the minute, and Cars2Go rents smart fortwos by the minute. Prices for those services range between 31 and 41 cents per minute, with special rates for up to 24 hours at a time.
One of the hiccups in the industry is parking. DriveNow, currently operating only in San Francisco, will suspend operations there because the city won’t allow users of the service to park for free. People love car-sharing because the price includes fuel, insurance, and oftentimes parking.
Automotive News says,
For years, DriveNow had struggled to persuade San Francisco’s government to offer “superpermits” that would allow users of the service to park anywhere in the city. Such permits are key to DriveNow’s business model, which allows drivers to find a car and drive it to their destination, at which point they leave it on the street.
San Francisco’s reluctance to offer such permits is a major reason Car2Go, the rival service owned by Mercedes-Benz parent Daimler AG, hasn’t opened in San Francisco.
Car-sharing is great. It’s a perfect solution for people who only need exceedingly rare access to a vehicle and is an effective way to save a lot of money compared with car ownership. However, I believe that people who use car-sharing services should pay for parking, just like the rest of us.
Could you get by without owning a car?