Different by Design: Car Sharing vs. Car Rental

By 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.

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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