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Different by Design: Car Sharing vs. Car Rental

Shareable
Shareable | Wednesday February 13th, 2013 | 13 Comments

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3PCarSharingBy Cat Johnson

Car rental giant Avis’s recent acquisition of car sharing company Zipcar ignited much speculation about the future of car sharing. Some wondered if the move marked the beginning of the end for Zipcar while others argued that Zipcar, while one of the most visible players in the car sharing game, doesn’t represent peer-to-peer, nonprofit, or transit-based car sharing platforms.

Lee Broughton, head of corporate sustainability for Enterprise Holdings, recently wrote that the acquisition is not the watershed event that it is being made out to be. His angle is that car rental companies have offered local, convenient access to mobility for years and that they offer a scale and level of oversight that peer-to-peer car sharing companies cannot.

He cites a study of Boston-area Zipcar users that challenges the altruistic motivations for car sharing with claims that program members are unconcerned with the cars and the Zipcar community, and that they participate in the program only to save money and for their own convenience.

But the study was criticized as being flawed and the idea that its findings reflect all car sharing participants is inaccurate. Researchers only looked at 40 Zipcar users in Boston. That’s a very small, geographically- and demographically-limited sample. The findings are not even a good reflection of all Zipcar users, let alone all car sharers.

Convenience and savings are drivers of car sharing, but they are not the only ones. An independent study of over 1,000 adults, commissioned in 2011 by Zipcar, found that over half of the Millennials (18-34 year olds) made an active effort to drive less, stating, “protecting the environment” as a key reason for doing so. A national consumer study found that in addition to financial reasons, respondents listed the environment, community and generosity as reasons for sharing.

There’s also a failure to recognize key differences between renting, fleet-based car sharing such as Zipcar, and peer-to-peer car sharing. The first two offer company-owned cars to consumers. Peer-to-peer car sharing platforms connect private car owners with would-be car renters. This offers some advantages to traditional car rental and car sharing.

Convenience

Peer-to-peer car sharing can be more convenient than renting through traditional channels. You can find a car nearby, book it, pay for it, and, in some cases, open it, with your phone. It’s a seamless transaction that is easy and fun. Compare this with a car rental scenario where you stand in line, fill out paperwork, do an inspection and endure a sales pitch for extras like insurance. It’s not quick, convenient or fun.

While rentals and fleet-based car sharing services are found predominantly in major metro areas, peer-to-peer sharing is without geographic restrictions. Peer-to-peer car sharing giant, Relay Rides, lists cars in urban, suburban and rural locales, listing vehicles from New York City to Spokane, Washington to Enid, Oklahoma.

Variety

At its broadest, peer-to-peer car sharing offers a virtually unlimited pool of vehicles to choose from. This is something that no rental or car sharing company can compete with. The pool of shared cars grows daily. It includes a dazzling variety of cars from exotic sports cars to pedestrian commuters. Peer-to-peer platform Getaround has, among its massive inventory, Toyota Prius’, pick-up trucks, Minis, Jeeps, BMWs, Subarus, Honda Civics and Tesla Roadsters.

Accountability

Through user ratings and reviews, car sharing platforms offer a greater level of accountability than car rental. The reputation system of peer-to-peer rentals rewards good behavior on both sides of the transaction. That can lead to better experiences for everyone. Even with fleet-based car sharing services, you can be held accountable for leaving a messy car or not filling up the gas tank. Rentals offer less accountability since there are no rental company, car or driver reviews. This leaves rental companies freer to offer poor service, and drivers to abuse cars.

Different by design

While car rental companies experiment with product extensions such as Enterprise CarShare, Hertz On Demand and U-Haul’s U Car Share, peer-to-peer car sharing and car renting, at their core, are not the same. Car sharing is, by design, something different from the traditional rental model and the steady growth of the car sharing market demonstrates that a growing number of people find it very appealing.

***

Cat Johnson is a freelance writer whose work focuses on community, culture, the sharing economy and music. Publications include Shareable, GOOD, Yes! Magazine, Instant Magazine and the Santa Cruz Weekly.
Follow CatJohnson on Twitter.

Creative Commons photo by Unsighted Listings


▼▼▼      13 Comments     ▼▼▼

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  • saffer

    I have been very impressed with the Pace Car Rental model in South Africa. They are pioneering the car rental market in South Africa. have a look http://www.pacecarrental.co.za

  • http://www.facebook.com/jacob.wadsworth.961 Jacob Wadsworth

    Car sharing has better benefits because it allows for use of a variety of cars in an hourly basis compared to car renting. It also is less cheaper. Car sharing can also be a form of advertising for the company where the car has been rented. – http://www.miamiexoticautoracing.com/

  • G.

    Please sign my petition and help us save Zipcar!

    http://www.change.org/petitions/zipcar-don-t-sell-out-to-avis

  • Rose winslet

    Huge. We are dealing with a massive market and could potentially revolutionist the car rental industry. We aim to one day be a global
    service and brand known world wide. As we grow we can only be helping
    more renters and car hire companies which is great.

    Reference :
    http://www.dan-dooley.ie/

  • James Reynolds

    Peer2peer car rentals is a very interesting concept, but I think that the insurance issues that may arise will be more of a hassle then its worth to deal with. I think its best to rent from an established car lot that has the necessary insurance coverage in place. I get my rental cars in Augusta, GA, at a car lot right down the street from me and I have never had a problem. Has anyone run into insurance issues while sharing a vehicle?

  • fabricio

    Colombia rent a car, I think the main problem is insurance, but just do not despise the company I guess you have identified the problem and have a solution but the shared service is a genius by the cost savings.

  • pier carlo

    Dear Sirs,

    The rationale behind carsharing has been made loud and
    clear.

    We own a private car to use it at maybe 10% of its capacity,
    and the remaining 90% we keep it available “in case of…”.
    We own
    millions of cars which are sitting to rust. Existing fleet is vastly
    oversized.

    A shared fleet could serve car everybody’s mobility needs
    with lower costs and better service than a fleet made of “private-use”
    cars.

    The mantra here should be: REDUCE installed capacity (existing
    car fleet) and SHARE optimum size (reduced fleet).

    Intuitively, car
    mobility needs are being currently served by private cars – as such,
    demand is (over)met, market is saturated. If existing private fleet is
    not reduced, shared fleet would have no “market”.

    On the contrary,
    past and current initiatives chose to:
    – INCREASE installed capacity,
    and SHARE a small part of it (the new car sharing company – car Sharing
    1.0) – who should use this service, if every family has got a car?

    SHARE private installed capacity, AND THE BIGGER THE SHARED PRIVATE
    FLEET THE BETTER (p2p – car sharing 2.0) – who should use this service,
    if every family has got a car?

    I’m particularly puzzled by car
    producing and rental companies entering the arena.
    As the “shared
    fleet” concept appear to be such a better approach, I would expect
    those same companies very pushy in emerging economies (where installed
    private fleet is arguably smaller, cars/hab): THAT should certainly be
    a market with potential.
    But no: China has turned into n.1 producer
    and market for private cars.
    Instead, those same companies are very
    aggressive in saturated markets: high capital expenditures and no
    sales/margins. Well, a bit of math makes car companies motivations
    clear: oversaturate the market, and the occupy the sharedfleet niche
    (the result: car companies have a ten fold increase in their
    historical financial statements).

    In the same way, public entities
    have flooded the field with direct interventions and financial
    resources to create NEW shared fleets.
    This seems a bit odd, given
    widespread disarray of public finances, as the same resources could be
    sitting in our roads (private vehicles). Public-private deals seems to
    clear up a bit on public agents: they’re not there to help their
    citizens’, but to help private companies in having their business.

    It
    appears to me that a missing link/agent is there: the owners of private
    cars, and the unparalleled amount of resources they already own.
    They
    could transform their cars back into cash (selling, even as scrap), and
    become the owners of the shared fleet company. Private/social interests
    would be fully aligned (lower costs/prices for a better service), and
    that should represent a far superior arrangement to other approaches.

    Why is this (Car Sharing 3.0) not being developed, to the advantage of
    other less-promising and obscure initiatives?

    I’m trying to see if
    anything can be done in my town (Milano, Italy) to this effect….would
    you help me in exploring if it is feasible at all…..?

    Looking
    forward to your kind reply, I’m very available for any clarification
    you may need.

    Sincerely,

    Pier Carlo Barioli

  • Alvin Payne

    I can see the pros and cons. Whenever i’ve need one, I always get a truck rental in chicago, works best when I visit my family. Thank you.

  • Norah James

    car hire is the best option when you look for a car in wedding because hiring a car can give a wonderful satisfaction being a user. You can hire a car from http://www.kpcd.ie/ which is best in Meath.I am recommending this because I had taken their car service for my wedding.

  • jem777

    Future of car designs. http://autoglasschip.com/

  • Felix Marsh

    car hire and rental is the best option when you look for a car in wedding because
    hiring a car relieves the stress of the day and allows the porfessionals to take over. If you are in Cork you can
    hire a car from
    http://www.weddingszone.ie/wedding_suppliers/category/wedding-cars-limos-carriages-transport/cork
    which are the best you will find in cork. I am recommending this
    because I had taken their car service for my wedding.

  • Julia Dunne

    car hire is the best option when you look for a car for your debs ball in ireland it give you the hirer wonderful feeling as a being a debutante . You can
    hire a car from http://www.debszone.ie/categories/debs_limousines/dublin/ which has the best choice in Dublin.I am recommending this because I had taken their car service for my irish debs ball.

  • Exeque Car Rental

    Rather stick to Car Hire where you know what you get and you know what you are covered for.
    http://www.exequecarrental.co.za