Car sharing thrives despite torrid new vehicle sales
DETROIT — Maybe car sharing won't threaten the auto industry after all.
Despite forecasts from futurists that millennials aren't that interested in owning cars and trucks, new vehicle sales are running at levels not seen since the housing bubble of a decade ago.
At the same time, 1.3 million Americans belonged to some type of car-sharing network at the end of 2014, a 34 percent increase from 2013, according to the University of California, Berkeley's Transportation Sustainability Research Center.
In fact, a newish segment of car-share industry also is expanding, renting out your personal vehicle to strangers in much the same way Airbnb rents out your residence to travelers, if you're out of town or on your own vacation. A San Francisco-based vehicle-share program, which launched in 2009, is called Getaround and has expanded this year to Washington, Portland, Ore., and Chicago.
The simultaneous upswing for auto sales and car-sharing can be partially explained by rethinking some faulty assumptions.
First, millennials, now the largest demographic block in the U.S., are not abandoning car ownership. Those born after 1980 accounted for 27 percent of new vehicle purchases in the U.S. last year, up from just 18 percent in 2010, according to J.D. Power and Associates.
The second dubious assumption is that Generation Xers and baby boomers will be ensconced forever in suburbia, desperately dependent on their cars.
Last month, Zipcar, which is owned by Avis Budget Group, released a study that more people between 50 and 69 are moving to urban cores. Nearly 15 percent of Zipcar members are older than 50, according to company president Kaye Ceille.
Detroit resident Antonio Agee uses it regularly.
"I like immediacy. I can go straight to my app and say I want this car right now," said Agee, a 44-year old graffiti artist. "I feel like I'm more in charge of what I'm doing."
He's belonged to Zipcar for nearly four years and is satisfied with the experience. He said he occasionally gets a car that been left with a messy interior, but he's never had an accident while using the service.
"I'm not a speedy guy," he said. "I don't even walk fast."
For now, a modest economic recovery is strong enough to spur both new vehicle sales and car sharing, especially in urban areas where residents of all ages are looking for ways to reduce the cost of owning multiple vehicles.
A NEW TYPE OF CAR-SHARE PLAYER
Last week Sylvano Carrasco, vice president for hardware and telematics for Getaround, and Kate Roberts, Zipcar director of global partnerships, spoke at an industry conference outside Detroit.
Unlike Zipcar, which owns its vehicles, Getaround enables members to rent out their vehicles to strangers. Those willing to share their vehicles pay $99 for Getaround to install a device that can unlock the vehicle through a smartphone app. There also is a pouch in which the owner places the key. In addition, owners pay a $20 monthly fee to be connected to the company's network.
They rent their cars for an hourly rate that starts at $5 and can be higher based on Getaround's recommendation. Getaround keeps 40 percent.
"We hear a lot of people say, 'I can't do this. This car is my baby,'" said Carrasco. "But then they see the checks coming in. One Tesla owner grossed $40,000 in the first year."
Getaround guarantees owners $1,000 in the first three months. The vehicles must be 10 years old or newer and have no more than 125,000 miles.
Susan Shaheen, director of Innovative Mobility Research at UC Berkeley, has studied car sharing nearly since its inception 20 years ago.
"There's more choice now," Shaheen said. "Young people can move to cities and use these new options. Or they can settle in suburban or rural areas and buy a car or truck."
Shaheen's research shows that one car-sharing vehicle used regularly throughout a week, eliminates the need for 15 privately owned vehicles.
Rather than resist that, however, several automakers are looking at ways to incorporate the concept into a profitable opportunity.
"We are working on getting automakers to think beyond the one to one retail idea and embrace the one to many model," said Zipcar's Roberts.
Last month Ford launched GoDrive, a one-way car-sharing service in London, much like the car2go program through which Daimler deploys a fleet of Smart cars to urban centers.
Ford regards GoDrive as a "beta" test. The service makes about 50 Fiesta subcompacts and Focus EVs available to about 2,000 people at 20 locations around London.