Car Sharing Services 101

Using Zipcar, Car2Go and Getaround to Get Around

Car Sharing Services 101
July 28, 2014

Until fairly recently, there were three primary ways to obtain access to a car for personal use: buy it, lease it, or rent it. But now there is another option that has become increasingly popular over the past few years — car sharing.

The concept of car sharing goes back to the 1960s and 1970s in Europe. Zipcar, the first car-sharing service in the U.S., was introduced in the early 2000s. Since then, many car-sharing services have been started, including Car2Go and Getaround. Some traditional car rental companies also now offer car-sharing services, like Enterprise CarShare and Avis On Location, as have some car manufacturers, like Daimler’s Car2Go and BMW’s DriveNow.

What Is Car Sharing?

With car sharing, vehicles are rented for short periods — usually by the hour, but sometimes by the minute, depending on the user’s needs. Car sharing is emerging as an alternative to car ownership in many urban areas and on college campuses where people often do not need to drive as much as those who live in rural areas and suburbs.

In the right circumstances, car sharing can result in significantly lower overall transportation costs than owning or leasing a car. Of course, there are no monthly car loan or lease payments, nor are there any maintenance or gasoline costs. Experts say that if you do not need to drive a car every day to commute to work and you drive less than 6,000 miles a year, car sharing could be more cost-effective for you than buying or leasing a car.

It can also be cheaper than hailing a taxi, depending on how often you need to catch a ride and how far you need to go. Taxis usually are not very cost efficient if you have to travel more than a few miles. Moreover, car sharing tends to be more flexible than traditional car rentals if you need the vehicle for less than a full day. For longer-term vehicle needs, a traditional car rental may be more cost efficient.

With most car sharing services, members pay a one-time application fee (which includes a background driving check) and an annual fee. With Zipcar, the application fee is $25 and the annual fee is $60. Zipcar members then pay an hourly rate for vehicle usage starting at just $7.65 an hour that covers gasoline, insurance and mileage up to 180 miles per day.

How Car Sharing Works

Different car sharing services operate in different ways, but in general, the car sharing process works like this:

Members make a vehicle reservation by phone, online, by text message or by using a smart phone app and are told where to pick up their vehicle. They can unlock the vehicle by inserting their membership card into a card reader that is mounted on the outside of the windshield. The keys will be inside the vehicle, either in the glove box or under the dashboard.

The member then drives the car for as long as he or she has it reserved and returns it to a pre-arranged drop-off location, swiping the membership card again to end the rental. If members need the car for longer than they anticipated, they may be able to extend the rental if the vehicle is not immediately scheduled to be picked up by another member.

With most car sharing services, members are expected to return the car in clean condition and with the gas tank at least one-quarter full. With some services, a gas card is stored in the car to use for buying gasoline.

Car Sharing Pros and Cons

So is car sharing a feasible option for you? Here are a few pros and cons to help you decide. First, the pros:

  • Potentially lower overall transportation costs if you do not drive often and live in a large urban area or on a college campus.

  • Potentially less expensive than hailing a taxi if you need to travel more than a few miles.

  • More flexibility than traditional car rentals for short-term needs, such as hourly or even by the minute.

  • A lower age limit (21 or 18) than required by most car rental companies (25).

  • Car sharing can help reduce traffic congestion and pollution.

The most common potential drawbacks of car sharing include the following:

  • Usually not a viable option if you live in a rural area or the suburbs.

  • Will usually be more expensive than traditional car rentals if you need the vehicle for longer than one day, or need to drive a long distance.

  • Depending on where you live and the car-sharing service you use, it can be difficult to reserve a car on short notice.

  • Cars usually are not serviced between uses so you could get a vehicle that is not as clean or neat as you would like.

Carefully consider these and other advantages and disadvantages to help you determine whether car sharing might be a viable option for you.

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