Each time I walk to a Flexcar in my neighborhood, I pass scores of parked private cars. I sometimes fantasize about strolling up to one of them, swiping my Flexcard over the dash, and driving away. I’d be debited automatically; my neighbor would be credited, less a slice for Flexcar. And I’d have a vastly larger pool of vehicles at my disposal.
This fantasy is less fantastical than it may seem. (UPDATE, 5/25/2010: A UK company and a Boston company are about to launch the types of services described in this article, as TheEconomist reports.)
Advances in information technology and the growth of car-sharing could converge with trends such as high fuel prices, urban densification, and caps on carbon emissions to create a thriving market for private cars’ idle hours—for people to pimp their rides.
The benefits for consumers and society would be colossal, and the obstacles to such a market emerging do not seem insurmountable. But I’m getting ahead of myself.
The starting point for this line of reasoning is the fact that cars and trucks are everywhere. From wherever you’re sitting right now, I bet you can either see or hear at least one. The Pacific Northwest has substantially more motor vehicles than licensed drivers. There are enough cars around that everyone in the region could climb into a vehicle and no one would have to sit in the backseat. In fact, most of us would be alone.
What’s more, most of the time—23 hours a day on average—our vehicles are parked.
The degrading effects of this massive vehicle population on our climate, our communities, and our health are gargantuan, but forget all that for the moment. Just think like an MBA.
More than 12 million motor vehicles, each of them idle 23 hours a day—that’s a mind-boggling stock of underutilized capital, Aside from our homes, most of us Cascadians have more money tied up in our cars than in any other physical assets. And they’re just sitting there in the driveway depreciating, their resale value diminishing with every passing hour. (It’s true! Cars depreciate even they aren’t being driven.)
Anytime there’s such over-capacity in the economy, there’s also a profit opportunity for whoever can figure out a way to put the over-supply to productive use. So how might northwesterners reap rewards for their unused cars? Well, they could rent them out. Imagine parking at the office, flipping the “rent me” button on your dash, and earning a few extra dollars an hour until quitting time. Imagine leaving town for a week and coming back to learn that your vehicle had earned you $300 on the rental market? On the flip side, imagine that your car-sharing membership card gave you access, on a moment’s notice, to tens of thousands of private cars and trucks sprinkled around your city. You might shed one or more of your household’s own vehicles if you knew there were a hundred at your disposal within a ten minute walk.
Why hasn’t such a market for vehicles’ off-duty hours already developed? What are the practical or legal obstacles?
The practical obstacles are what economists call transaction costs, most of them having to do with information. How can potential buyers and sellers find each other? How can they conveniently ensure payment? How can they tend to liability and insurance?
Car-sharing companies such as Flexcar and ZipCar are hard at work reducing these obstacles. They’ve developed elaborate and expensive transaction and marketing infrastructure—smart cards, onboard computers and GPS trackers, online reservation and billing systems, refueling and car washing systems, advertising and member recruitment. The business challenge for them is to get adequate scale. You need a huge number of billable trips to amortize all that transaction overhead. To add trips, you need more cars, which are very expensive. The idea of creating a market for off-duty vehicles is a natural extension of the car-sharing business model. It’s also an idea that both Flexcar and ZipCar have toyed with.
From a car-sharing business perspective, what could be better than to extend your transaction infrastructure across not only the fleets of vehicles you own but also to private vehicles that might be plugged into your system? Even getting one private vehicle in a thousand plugged in would represent several orders of magnitude of growth in the car-sharing fleet. That’s vastly more billable trips but no additional capital locked up in buying your own vehicle fleet.
The German car-share company Choice has gone from toying with this idea to proving it. It began road-testing a system called CashCar a few years ago. CashCar is a form of vehicle lease. Here’s how it works: I lease a CashCar, just like I might lease any other vehicle. But with Cashcar, I retain the option of turning the vehicle back over to the car-sharing company during idle periods. Whenever someone uses my CashCar, I get a credit toward my lease fees. (Unfortunately, neither I, nor my German-reading father, have been able to figure out whether CashCar has moved from road test to the consumer market. If you read German and have some time, please look into it and tell us what you learn!)
Many of the practical obstacles to ride-pimping are diminishing with the growth of car sharing. But there may still be barriers.
Legal barriers, for example, may be considerable. The car rental business is as regulated and taxed as any other, and those regulations and taxes are designed for the conventional by-the-day rental business. So I imagine that enrolling thousands of cars into a CashCar-like system will require at least a few friendly rule changes from state and provincial capitals. (If you’ve got any expertise on this subject, please enlighten us!)
Insurance and liability issues could also block ride-pimping: if I’m paying you, through Flexcar, for the use of your Hummer and I drive it over the top of someone’s Jaguar, whose insurance pays? If the brakes fail in my car while you’re driving it, who is liable?
In car-sharing, as in much of life in North America, liability and insurance concerns are killers of innovation. Flexcar’s first CEO Neil Peterson once told me that getting insurance coverage was by far the biggest obstacle to his company’s early success. I’m betting CashCar would be even tougher to insure, and under present rules, renting out your wheels to strangers would almost certainly invalidate your insurance. But I’m no expert on such matters, and I can’t see any problems that smart and creative attorneys couldn’t resolve in the design of pimp-your-ride contracts for owners and drivers. (If you’ve got expertise on this subject, please enlighten us!)
Last, I’ll mention the obstacle that many readers probably thought of first: many car owners are too emotionally attached to their vehicles to let strangers use them—even strangers with clean driving records like the members of Flexcar. I mention this last because I don’t believe it’s as big a barrier as you might expect. The beauty of the pimp-your-ride strategy (assuming we can lower the legal and liability barriers) is that it sets in motion a virtuous circle. It can start very small and grow steadily, unlike some all-or-nothing transportation solutions like London and Stockholm’s congestion pricing sy
stems.
Even a fraction of a percentage of owners is enough to create explosive growth in the car-share fleet. As the fleet grows, so does the market for it. The more cars available, the more people will start renting them—because the system will become ever more pervasive and reliable. Meanwhile, the more money the owners are making, the more that other owners will want to plug into the system. And as the idle-car rental market becomes ubiquitous, it will grow reliable enough that many, many people will feel comfortable shedding one or more of their private cars. The newly car-less (or second-car-less) will become a more reliable group of consumers for the whole ride-pimping system. As the virtuous circle keeps turning, emotional reluctance to share your car with strangers is likely to diminish. Once your neighbors are all pimping their rides, you’re far more likely to do so yourself.
Furthermore, if external trends such as high fuel prices, regulations or fees on emissions of greenhouse gases, rising parking costs, and denser urban development continue, the virtuous circle is likely to turn faster.
A welcome side-effect of this virtuous circle would be to nudge the transportation economy from a market in which we buy transportation by the vehicle to one in which we buy transportation by the trip. A trip-by-trip transportation market results in fewer car trips, because of the first law of car-lessness: when you don’t have a car, you think more and drive less. My family, for example, cut our mileage by about two-thirds when we went car-less.
So fostering an hourly market for off-duty cars could make a big contribution to creating healthy, lasting prosperity. It’d give more people ready access to a car without having to buy one (or a second one). It would help shrink the over-capacity in the vehicle fleet and drive steep reductions in how much driving we do—in ways that generate profits (or savings) for both car owners and nonowners. Along the way, it would help stabilize the climate by preventing greenhouse gas emissions, help stabilize the Middle East by reducing oil imports from terrorism-financing nations, help reduce traffic congestion by eliminating discretionary trips, help liberate parking spaces for other uses, help create jobs by keeping dollar circulating locally (rather than leaving the region to buy vehicles and fuel), help save lives (by reducing car wrecks), and help make us all fitter and trimmer (by spurring us to walk more).
Not a bad deal, all around, or that’s how it seems to me.
Would you, personally, rent your car during off hours? Would you car-share if there were more cars available?
Seth Zuckerman
From the standpoint of systems analysis, Alan, this is a great idea. And the fact that you acknowledge the possibility (!) that people are “too emotionally attached to their vehicles to let strangers use them” sets you apart from many in the wonkish class. But I think this emotional attachment you speak of is only the tip of the iceberg. It’s part of the larger syndrome of transportation modes not being merely a utilitarian choice, but rather a personal statement. (I know, isn’t it crazy, making a personal statement with a mass-produced item? Such are the contradictions of consumer culture.) It’s one of the reasons people will choose to spend billions more on a rail system that moves people no faster than a bus system. See also this article about the reasons car buyers opted to purchase hybrid cars. Surprise: it wasn’t about reducing the net present value of their vehicle ownership and operation costs! It was about the image they projected.So…the feasibility of your idea would depend, it seems, on creating a cachet to being a car-sharer that’s even cooler than being a rugged individual car owner. Which might be a cultural meme that can take hold first in a neighborhood like the one where you live.
Alan Durning
Seth,Excellent point.I believe it was Juliet Schor’s 1999 book The Overspent American where I read that most American men don’t even need to stop and think before answering this question:If you died and came back as a car, what make and model would you be?They appear to have already thought about it. So, clearly, vehicle choice is powerfully linked to identity.(Aside: That may be one reason why bicyclists are politically active as a bloc, while pedestrians are not—even though they’re more numerous. Shoes are not a vehicle. (But they are, certainly, a marker of identity, vis Prada.) I also suspect it has to do with why the bicycling counter-culture (messengers) ride “fixies” so often. Fixed-gear bicycles without breaks are not a highly utilitarian choice (just like stiletto heals). But they sure distinguish the hard-core cyclists from the commuters.)Still, the beauty of the pimp-your-ride idea is that it could start with such a small share of vehicle owners. Even fractions of a percent of vehicles would probably suffice to get the virtuous circle (described above) going. How many people would ultimately join? I can’t say. But surely, there are at least five percent of vehicle owners in the Northwest who have at least one vehicle they’d happily turn into a revenue generator. Beyond that, I’m making no predictions about how big the ultimate market share might be. But given a smack-down between greed and identity, I’ll put at least half of my chips on greed.What’s more, ride-pimping may actually allow car buyers to get fancier cars—reinforcing identity-based consumption rather than contradicting it. If a quarter of the time, my car will be paying me, the added income may give me a bigger car payment budget. More-expensive cars are not, I think, typically more fuel efficient or cleaner-burning, but they may be safer and more durable.
Paul
Alan, The idea is not without precedent. The Search for Extraterrestrial Intelligence (SETI) Institute was the first to utilize private PCs for parallel processing to crunch signals collected by their radio telescopes to seek out intelligent civilizations. They offered signal processing software for free to anyone who wanted it. It worked like a screensaver, kicking in after some minutes of idle time, downloading a batch of signal data, processing it, and sending back the results. They got their data processed for free, and people go excited about participating. It was pretty successful. In fact there were times when they had a paucity of data so they sent out the same data for processing over and over again just keep everyone engaged. The key was that everyone felt that they were contributing, and contributing on a regular and continuing basis. Certainly we can all feel that by car-sharing we are contributing to the environment. But that’s a kind of amorphous contribution that doesn’t motivate the majority of people. One way of making this happen with car-sharing is to make it a system where your favorite charity gets a cut each time your car is used, kind of the way they do with credit cards. That way, too, you have recruited entire networks of organizations to promote car-sharing, and not just environmental organizations, but any and all charities – some of which are powerful enough to get laws changed to make this happen as well. Anyway, it seems sad to think that preserving our planet isn’t enough to motivate the majority of the population to sign on, but I think it is true, and a charity angle would greatly increase the chances of success.
Alan Durning
Paul,Good thinking.An affinity program would, indeed, help with recruitment!
MichelleV.P.
…er…Since we’re talking about setting in motion a “virtuous circle” here…I might consider renting out my car if this innovative system were called something more pleasing, like rent-a-ride rather than pimp-a-ride!But I’m also wondering if having cars so readily available at every turn would actually encourage more single-driver usage, and thereby discourage those other virtuous circles such as car-pooling and mass transit?
Arie v.
Market based ideas ideas that encourange efficient vehicle use and have been proven abroad may provoke more practical ideas. In Japan tolls, strict parking rules (you must prove you have a spot in Tokyo prefecture), high taxes on luxury vehicles and dramatic tax, insurance discounts on “mini” vehicles, higher – or “true” – gas prices, high densities and efficient rapid transit all combine to discourage vehicle over consumption. Even in a high context society like Japan flex car has not taken off and I’m skeptical about Germany. BTW on the final question, yes I’d share out my 91′ Nissan pickup to anyone not obviously a serial killer. However my wife will give the evil stare to if not taser anyone who parks within 5 meters of her tricked-out Mini Cooper S. I think there are more of her types out there than mine from what I see in the parking lots in the area.
Alan Durning
Michelle,I just couldn’t resist the pop-culture reference in naming this post. Clearly, we’d need different name to market the service.Arie V,Car sharing is much more established in Europe than here, and the growth trends for Flexcar, Zipcar and their local parallels are impressive. Vancouver’s program, a coop, is going strong. Still, they’re tiny niche markets at present—like organic foods in the 1980s.I don’t see this ride-pimping idea as an alternative to but as complement to other reforms such as “true” gas prices and compact communities. I’m just arguing that among the many strategies at our disposal, this one has the benefit of being profit generating, opt-in, and market oriented. And there’s no doubt in my mind that ubiquitous car-sharing would reduce, not increase, driving overall. Paying by the trip, rather than by the vehicle, has huge implications: that’s really the main lesson of this whole car-less series.Sure, hundreds of vehicles would be at your disposal, but they’d cost you, oh, $10 an hour to drive. That price tag stimulates all kinds of creative problem solving and trip reduction.PS This post is cross posted over at Worldchanging.com and there are several additional interesting comments there.
Steve Mooney
I’ve mused before about a variation of this idea specifically for airports, where a long-term parking lot would pair with a car rental company to allow this kind of casual car sharing.On top of the liability issues, I’d have logistical worries around:1) Standards (How clean does the car need to be to be rentable? Can I trust a car I rent won’t break down? Etc.)2) Valuation (Would my wife’s somewhat beat-up old Honda rent for the same price as, say, a just-off-the-lot Prius? I guess the car’s owner could set the rental rate—or would that make finding a car too complicated for potential renters?)3) Hidden wear and tear (If I owned a stick shift car, I might be worried someone would rent it to learn to drive stick and chew my clutch to a pulp)That said, none of these problems seem insurmountable and there’s clearly a huge personal and environmental benefit in enabling easier pay-by-the-trip driving. I’d love to see this in action.
Arie v.
Granted, I like the theme of paying by the trip, not by the vehicle and the cocktail of solutions or “wedge” approach. I may have overreacted to what I sensed to be an unrealistic and moralistic tone in the thread (e.g. “it seems sad to think that preserving our planet isn’t enough to motivate the majority of the population to sign on”). Technologies such as RFID tags, biometric identification and GPS technology will help Flex car approaches to spread, just not much beyond a niche as you say.
Alan Durning
Steve,All good points. In fact, these are the kinds of challenges that Flexcar and its competitors would need to strategize about. Different companies might adopt different strategies. Rent-a-clunker v rent-a-beamer. Flexcar, for example, operates on a peer-enforced honor system about things like refueling and cleaning. If you burn the fuel level down to one quarter or less, it’s your obligation to refuel. This obligation is simplified by the fueling credit card in each vehicle, so fueling up is easy. And Flexcar thanks you for refueling by taking $2 off your bill. If you don’t refuel, the next driver may leave an angry note in the log onboard each vehicle. Eventually, transgressions get communicated to the company. It’s easy to imagine analogous arrangements for ride pimping, in terms of fueling and cleaning. The pricing question has also been scouted by car-share companies, which charge extra for premium vehicles such as sports cars and pickups. In ride-pimping, there might be a discount rate for old clunkers—with a provision that clunkers aren’t guaranteed to perform the way other vehicles are.My wife and son were talking and decided that they’d want an onboard breathalizer (sp?) linked to the ignition in their car, if they were going to rent it out to strangers.Arie, how does biometric identification comes into play?
MichelleV.P.
How about calling it something like RideHop Co-Op? And, members could be known as RideHoppers. BTW, with my limited German, maybe the “Choice” link, posted in the main article, is supposed to go here?
Arie v.
Biometric identification is the soon to be ubiquitous (and to some scary) notion of having your credit attached to your retinal scan or finger print. Walk up to a car, put your finger on the door handle, and bam you’ve made a contract and it’s yours. Gone in 60 seconds – or 6!This came to mind from some of the scenarios laid out in this lengthy thread. My skepticism aside this ranks among the all-time-greats for feedback and serious discussion.
Chris C
This business model also underpins much of the vacation industry – for example, lots of condos at ski areas are owned by an individual, with the understanding that a manager will rent it out most of the time, except for the week or two per year that the owner wants it. Charter yachts in sunny locales are the same way, I think. This example has some of the same issues; the charter company is responsible for making sure renters are competent enough that they won’t land the owner’s boat on a rock. I’d imagine there’s plenty of insurance too.So it’s not *that* radical an idea, but making it work for something most people think of as a daily need, not an occasional vacation toy, would be the trick.
Rich E.
I wonder how many people would resist because of the (justified or not) need for the freedom to go anywhere anytime. Even though an owner might go years without needing their car during the business day, they might not want someone to rent their car lest the owner actually need it for an “emergency”.
Alan Durning
Great point, Chris C. Those instances are quite parallel.Rich E, you raise an interesting challenge. But I’m inclined to think that people would actually be more willing to pimp their ride if ride-pimping were fairly common. In case of emergency, you’re covered by using someone else’s car. In fact, ride-pimping might make you more willing to commute to work without your car, since one reason some people resist alternatives to driving alone is the possibility they’ll need their car for an emergency. (Hence, many employers offer “guaranteed ride home” programs.)This point, like some others described in comments over at Worldchanging, suggest that pervasive ride-pimping may have dynamic effects. That is, it may drive larger changes than you’d first imagine.One point made there is that ride-pimping might actually accelerate turnover of the vehicle fleet, which would be a benefit for jobs and air quality.
MichelleV.P.
Speaking of pop-culture references, check out these un-pimp my ride parodies from Volkswagen.
Alan Durning
Seriously funny!
ant_chang
Although I like the grand vision of this business idea, I wonder if there are smaller steps that could be taken in between that people can take (before anything like this ever came to fruition). For example, I live in the SF Bay Area and my wife and I own two cars but I only drive my car maybe once per month for work or for the odd trip and there. I take the train to work (I live 1/4 mile from the train station and the train station on the other end is a 15 min walk from my office), I live in a suburban downtown that has a plethora of restaurants, grocery stores / farmer’s markets, cafes, etc.), I have a bike I can use for further trips, and my wife and I can use her car if we are driving into SF, visiting relatives, etc. I originally toyed with the idea of selling my car and moving to a 1 car household, but I couldn’t convince my wife so I started looking for alternative solutions to having an car that would sit idle 99% of the time. Then I found out that my friend was moving to SF but didn’t want to drive the hour commute to her job in Santa Clara. So I offered to “car-share” so that she could take the train 3/4 of the way down, pick up my car from the train station and drive the last 1/4 to her office (which is not that accessible by public transit). This has worked our splendidly as she can take public transit most of the way to work and it lowers the cost of transportation for both of us. On top of that, I have co-worker who lives in the same city as me and takes the train to work but she doesn’t live within walking distance of the train station so her husband drops her off every day (which has not always worked out their schedules, especially since he travels for work quite a bit). So we have been talking about sharing the car 3 ways so that she can take the car during non-work hours (drive to/from the train station), my other friend can take it to work, and then once per month (or whenever I need it) I can use it on the weekends. All of this leads to the car still sitting idle 23 hours out of the day but I feel like car-sharing among a small group of neighbors, friends, etc. is a solution that ultimately reduces the number of cars that people need to own, buy, pay for, and use.
Alan Durning
Ant_chang,Car-sharing among friends is a great step. How little it happens is interesting to me.We do a fair bit of using neighbors’ vehicles, paying them back in gas money or other favors. But the coordination is a bit of a barrier. And there’s all the social baggage around borrowing. A market transaction is simpler and a CashCar-like system would probably facilitate the growth of car sharing.
Robyn
Whatever happened to taxis?
PatF
When i became carless in DC about 8 years ago, i learned that it’s impossible for a driver to buy insurance without a car. That’s one of the first problems that would have to be solved. GEICO, et al., insure the car, not the driver. If i, as a driver, can buy insurance from FlexCar or RideHop Co-Op, a lot of the issues disappear. And i’m willing to lend my Jeep to anyone who can prove they know how to shift with a driving school note.
Alan Durning
PatF,My wife and I have a very inexpensive “non-owners” car insurance policy from USAA. I wonder if other insurers offer such coverage.
jp_stephens
I struck upon an idea of car pooling and I thought a bidding process like ebay will enhance the experience of car pooling and at the same time allow drivers to make some money by filling the empty space in their vehicle. I was dreaming of anyone wanting to go somewhere, just log-in and find a rider who is travelling to the same destination or close to it. I have seen my neighbours in the same supermarket, and i seen my friends in the same mall, why not hitch a ride instead of driving myself. Well, it is embarassing to ask them! How about an online platform which will allow drivers to find riders. It will allow drivers to make some money to offset fuel and maintainance costs and it will allow riders to travel cheaply. If the concept of carpooling is embraced, and if we can reduce the number of single driver cars on the road, it will substantially reduce the number of vehicles on the road, will reduce emissions, less infrastructure costs for parking and I believe it will be a win for everyone! With this idea, I developed a site http://www.cabiecar.com which I thought will take off, I thought it would be fun to bid on a travel space and a feedback mechanism on the riders and drivers will propel this platform to allow users to have a unique and fun experience both online as well as on the ride! Any input would be helpful!