How To Start a Car-Sharing Business

With gas prices on the rise, owning a car is more expensive than ever. There’s gas bills, insurance fees, taxes, and maintenance to worry about, not to mention parking costs, interest on the loan, and the price of the car in the first place. As a result, more and more people are turning to public transportation for their primary means of getting around. For those days when you absolutely need a car, however, rental cars are no longer your only option. A growing number of people are turning to car-sharing as an alternative to the expenses of owning, renting, or leasing a car.

How Car-Sharing Works

Car sharing is the auto equivalent of vacation time-sharing, without the pushy sales presentations. Members pay a yearly fee to the car-sharing company, and in exchange have access to a fleet of shared vehicles with as little as five minutes’ notice. Most car-sharing companies allow cars to be reserved on an hourly or daily basis, at rates of $5-15 per hour. These rates cover the costs of insurance, maintenance, fuel, and weekly cleaning for the cars.

In addition to saving money for their members, car sharing companies also benefit the environment. An informal study by a Canadian car sharing company found that for every shared vehicle owned by the company, an average of 8 private vehicles were taken off the road. Many car-share members also report increased use of public transportation and alternative means of getting around, such as bicycles, electric scooters, and rollerblades. In addition to reducing the number of cars on the road, many car sharing companies offer primarily hybrid cars and other fuel efficient vehicles.

How To Start a Car-Share Business

Car-sharing companies may be either non-profit, such as the San Francisco Bay Area’s City CarShare program, or for profit.

Car-sharing businesses have relatively high initial costs thanks to the costs of purchasing, insuring, and registering cars. However, with good marketing, car sharing companies can start turning a profit within a year or two.

There are currently three major niches in the car-share market:

  1. Urban dwellers who need a car only infrequently and do not wish to buy or lease one, or who own one car but occasionally need a second
  2. College students
  3. Businesses who wish to avoid the expense of purchasing, insuring, and maintaining a corporate fleet

Three Car-Sharing Companies Helping People Save Money and the Environment

zipcarZipCar is currently the largest and most widespread car-share company in the world. It is found in more than 50 cities in the United states, Canada, and the United Kingdom, as well as more than 100 college campuses. ZipCar also has a successful corporate car-share program, and reduces the environmental impact of its cars even further with its partnership with ZimRide, a ridesharing social network.

connect-by-hertzConnect by Hertz operates car-share programs in Canada, France, Spain, Germany, the United Kingdom, and more than 20 cities and college campuses in the United States, with a fleet of cars including the Toyota Prius, the Toyota Camry, and the BMW Mini.

exotic-car-shareExotic Car Share is a Chicago-based car-share program that targets a unique niche: luxury car sharing! Its fleet includes both modern luxury cars and classics, including the Corvette Z51 Convertible, the Ferrari 355 F1 Spider, and the Dodge Viper GTS Coupe.

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  1. Lee says:

    Hi enjoyed reading your post.
    We have set something up near us quite similar. The big advantage we have here. If you call it an advantage in the recent climate with Fukushima. Our main local employer is a nuclear plant. So most people would be coming to and leaving work at the same time. It just took a bit of time working out the different shifts and times but once we got that sorted it took off quite well. One shift is even thinking about investing in a 15 sweater. Still waiting to see how that goes. Might just be talk watch this space.

    Thanks again


  1. […] including ZipCar and even the traditional car rental service Hertz, have started successful car sharing services in urban areas with a fractional ownership model, allowing members to pay an annual fee and in […]

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