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ZipCar is one of several car-sharing services available in Toronto. (MIKE SEGAR/REUTERS)
ZipCar is one of several car-sharing services available in Toronto. (MIKE SEGAR/REUTERS)

The Green Highway

Why buy when you can car share? Add to ...

Car-sharing services are growing like weeds. There are a number operating in Toronto now with more on the way. In Europe, they’re exploding, according to market research company Frost and Sullivan. In a new report, the company says there were about 21,000 vehicles in various car-sharing schemes in Europe last year, but by 2020, it is expected that there will be more than 10 times that many.

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The car-sharing idea is certainly catching on in big cities; why go to the expense of buying, maintaining, insuring and parking a car when you can probably get one on a moment’s notice and use it for a few minutes or a few days? However, within this growing space there are a number of different business models. It will be interesting to see which ones do best.

In Toronto, both ZipCar and AutoShare are membership-based car-sharing services. ZipCar is the big American company listed on NASDAQ and AutoShare is a Toronto-based independent. Zipcar has nearly 500 cars spread across about 200 Toronto locations while AutoShare has about 300 cars across 150 Toronto locations. Members can book online or by phone to reserve cars billable by the hour or day. You pay a fee to join and are given an access card. When you find the car, you flash the card, the car’s technology unlocks the door and inside you will find the keys. Start it up and away you go.

The traditional car rental companies are also getting into the game of no-hassle short-term rentals with programs including Connect by Hertz, Enterprise’s WeCar and UHaul’s U Car Share. And ZipCar is now offering moving vans in some cities.

The new arrival in Toronto is Daimler-owned Car2Go, which has placed 250 Smart fortwo cars across 200 city-owned Green P parking lots. You can locate and reserve a Car2Go on your smart phone, drive it away and return it to any Green P lot, not necessarily the one where you found it. Members pay by the minute ($0.35), by the hour ($12.99) or by the day ($65.99). The wrinkle here is one-way rentals, pay by the minute and only one type of car. Daimler wants to be big in this business and is rolling tens of thousands of Car2Go smarts into cities around the world.

With Daimler in the rent-by-the-minute business you knew BMW wouldn’t be far behind. This summer, BMW launched its DriveNow car-sharing service in San Francisco with 70 BMW ActiveE all-electric vehicles spread across eight locations. BMW’s wrinkle is to emphasize its parking spots.

According to BMW, San Francisco has 505,000 vehicles but only 448,000 parking spaces. On weekdays, the vehicle population jumps by another 35,000 and an estimated one-third of all downtown weekday traffic is caused by drivers circling while searching for parking. ParkNow, a BMW joint venture, is an online and mobile service that allows searching and paying for parking in advance. The mobile app can be used to direct the driver to a parking spot via turn-by-turn directions. BMW has also invested in ParkAtMyHouse, which allows home and business owners to earn money by renting out parking spaces to drivers.

But let’s get back to the Frost and Sullivan report that predicts 10 times growth in the car-sharing fleet over the next eight years in Europe. It expects there will be more than 200 traditional car sharing organizations and another 24 peer-to-peer (P2P) companies. That’s a really new wrinkle.

For example, there’s RelayRides, a peer-to-peer car sharing service that allows car owners to rent out their personal vehicles by the hour or day and set their own rates. The service first launched in Boston and is going nationwide.

Someone who needs a car goes online and searches listings in their local area. A journalist in New York City found 56 cars available within five miles, some for as little as $8 an hour. Even though RelayRides takes a 40 per cent cut of the rental price, it is still a way for car owners to make some money.

Before potential car renters can hit the road, their driving records must be screened and approved. RelayRides also insures every transaction with a $1-million liability insurance policy that covers any physical damage up to the actual cash value of the vehicle.

The company has partnered with General Motors and OnStar to allow users to unlock registered OnStar vehicles via smartphone. Nick Pudar, a vice-president at OnStar, was quoted, “We’re really leveraging the technology that OnStar’s been using for many years, now in a very unique way.” RelayRides takes car sharing out of the hands of the rental companies and even the manufacturers by enabling one-on-one P2P transactions.

Who knows which car sharing business model will dominate? But alternatives to car ownership are flourishing.

mvaughan@globeandmail.com

Follow us on Twitter: @Globe_Drive

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