The sharing economy: Car sharing and business travel

April 7, 2015 |

Car sharing services such as Zipcar and Enterprise CarShare are growing in popularity. Are they useful for business travel?Of the sharing economy services discussed in this series, car sharing is perhaps the oldest. The short-term car rental concept took hold in Europe at least 20 years ago. For U.S. consumers, car sharing has been around for more than a decade but it has only really begun to pick up speed in the past five years. 

The concept of car sharing is simple: people don’t always need to rent a car for a full day or more. Car sharing services allow you to rent a vehicle and pay by the hour rather than by the day or week, with fuel and insurance typically included. Members typically pay a low monthly fee, which gives them access to these services. There are many car sharing services available, ranging from small local agencies to offerings from large rental car companies. The two I will focus primarily on for simplicity are Enterprise CarShare and Zipcar from Avis.

Although traditionally aimed at the consumer market, car sharing has started to become popular for business as well, with the larger car sharing companies marketing their service as a virtual  “replacement for your fleet“. 

“You touch your membership card to the card reader on the car and it magically unlocks. You get in and proceed to your first meeting. ”

For business travelers, there seems to be a market as well, as is illustrated by this scenario: You’re only in town on business for an overnight trip. Your hotel has a great shuttle service to and from the airport and other local area stops, so you don’t necessarily need to pick up a rental car at the airport. However, you have a few meetings the next day and you need to be on time. You could hail a cab or summon an Uber, which is great when you’re making one stop – but inconvenient when you have several. You decide to pull out your smartphone and open your favorite car sharing app. After identifying an available car that’s nearby, you book it and make your way to the car. You touch your membership card to the card reader on the car and it magically unlocks. You get in and proceed to your first meeting. 

As a member, you can reserve whatever car you want that’s available in the location that’s convenient, ranging from hybrids to pick-up trucks to luxury vehicles. Refueling is facilitated by a card that’s found in the car. When you’re all done, return the car back to where you picked it up. That’s all there is to it.  It’s a pretty simple and convenient concept. 

Car sharing figures in the U.S. reached 1.2 million users as of 2014, with people sharing more than 17,000 vehicles. North American users now currently account for more than 50% of car-sharing memberships worldwide.

Advantages for Business
According to Zipcar, their services essentially provide three ultimate advantages for business:

  • Saving time compared to going through a rental car business
  • Saving money through reduced weekday rates for business members and other financial factors such as fuel, insurance and parking
  • Providing convenience through its abundance of vehicle models and online account management services

Business programs usually offer direct billing as an option so that their employees don’t have to pay individually. They also allow the company to monitor usage and activity. 

Insurance and Liability
The larger services such as CarShare and Zipcar do provide insurance coverage, however each varies in terms of the coverage offered and the liability protections provided. The companies also offer optional Loss Damage Waivers that can be added on. As with traditional car rental, it is a good idea for company travel programs to develop policies around what is covered and whether or not to purchase supplementary insurance coverage. For employees, it is important to be aware of company car rental coverage policies prior to reserving any type of rental car. 

Sustainability Initiatives
For companies with environmental and sustainability initiatives, car sharing services can be a big plus. Traditional car rental agencies are typically located at or near airports and train stations. Car sharing services place their cars strategically throughout cities – in neighborhoods, near public transportation stops, etc. Instead of driving the extra 20 miles each way in that rental car to and from the airport, you could take the shared, public transportation into the city center and then simply use a car to get around to the few stops you’ll be making.

Convenience vs. Availability
The convenience of car sharing is often surpassed by the concern of availability. While this concept is growing, it has still not fully taken off in all markets. In larger cities you may find an abundance of car sharing options available, but in other smaller markets the choices might be limited. Imagine pulling up your app to book a car and finding no results in your local area – or needing to transport an important client across town and the only car option is a subcompact. Conversely, your preferred car rental agency likely has a parking lot filled with vehicles of all varieties ready and waiting for you to select from for whatever business purpose you might have.

“ It comes down to company culture, business purpose and a number of other factors.”

To Car Share or not to Car Share?
As with my reports on AirBnB and Uber/Lyft, there is no single answer to the question of whether car sharing services are a good option for business travel in your organization. It comes down to company culture, business purpose and a number of other factors.

For travelers with only a short-term, local need for a vehicle at their destination, car sharing seems like an appropriate and cost-effective solution. For travelers who travel frequently, need to use their vehicles for a day or longer and are on the road a lot, the benefits provided from a traditional car rental service would typically be a better option. 

Whatever the case, I expect these services to continue to grow in popularity and scale. They are an important inclusion in the overall “sharing economy” and businesses should continue to keep an eye on them as they evolve over time. 

Have you used car sharing? What do you find beneficial about it? What don’t you like? I’d love to get your take. Let me know in the comments below or on Twitter @TandTNews.