City Carshare

Providing cars without encouraging over-use
March 1, 2000

Pricing Distortions Encourage Automobile Dependency

One of the reasons that driving is increasing can be traced back to the fact that the true costs of car usage are not efficiently captured in the various costs charged to motorists. Two forms of pricing distortion are important to understand. First, most of the costs of car use are fixed, rather than variable. To many of us, a car seems like food or rent-a necessary expense. But the true cost of each car trip is dramatically higher when you average out all the fixed costs of owning the car. By the time we've paid the fixed costs of insurance, financing, and registration, there's an incentive to "get our money's worth" by driving as much as possible. The problem is inherent in private car ownership-it encourages over-reliance on the car.

Second, most of the true social and environmental costs of car use are "externalized"-not reflected in the costs charged to drivers. Relatively inexpensive gas, free or cheap parking, and free roads all encourage driving, making a trip on transit actually seem more expensive. Not reflected in the prices of car use are the costs of roads and parking, the costs of long-term environmental deterioration, the cost of using the military to ensure cheap oil, the costs of providing ambulances for accident victims, or the social costs of unsafe streets and deteriorating community life. As a city, we need to commit ourselves to increasing mobility for each resident while protecting a high quality of life. Gas taxes, congestion pricing, and registration fees begin to internalize the social cost of driving into the prices paid by drivers. Car-sharing, which separates use from ownership, is a way to turn the fixed costs of ownership into variable costs.

There will be many trips that are best taken with a car. Many places are designed to encourage driving, with acres of free parking isolating one destination from another, and sidewalks disappear to make way for more lanes of traffic. But there are alternatives that can move us incrementally in a different direction. Car-charing, which is working successfully in Europe and Canada, is such an alternative.

What is Car-Sharing?

Car-sharing is a neighborhood-based, time-share car rental that allows people to use vehicles when needed, and to pay based on how much they drive. Cars are kept in small neighborhood lots, within easy walking distance of housing and transit. When members want to use a car, they call an 800 number or visit an internet site to reserve a car. At the lot, they check themselves in with a personalized keycard. They receive a monthly bill in the mail for car usage. Members save money on insurance, maintenance, repairs, registration, and monthly payments. They pay only for the amount they drive, based on a combined hourly/mileage charge. The prices are competitive with rental cars, and in most cases dramatically better. For instance, members would be able to check-out a car for an hour-long errand and pay roughly $8.50 for a 20 mile trip. Car-sharing prices will make the full fixed costs of driving visible in each trip, allowing members to weigh the real needs of each trip and make their decisions based on a fair trip-cost comparison. Car-sharing makes almost all the costs directly proportional to the amount a car is used. Consequently, it starts to make sense to evaluate each trip based on its real requirements. Car-sharing makes cars available, but it does not encourage over-use. This shift in economic incentives can reduce the number of cars in an urban area and support a practical shift away from over-dependency on automobiles.

Carsten Petersen, co-founder of Stattauto Berlin, had this to say when asked about how his organization educates people about the negative impacts of the automobile: "The education is done by economic forces. If you're a member of car-sharing, you will use the car when you need it. You will see on your bill that one drive is pretty expensive, and not driving is cheap. So after you get your first Stattauto bill, people who had private cars will call and say car-sharing is expensive! We tell them, you had the price list and car driving is a luxury. Drive less and you'll pay less...and then they do. This is the educational process."

Car-sharing is cheaper than private car ownership. However, because most of the fixed costs of private ownership are invisible to drivers on a day-to-day basis, car-sharing serves as a wake-up call to just how expensive driving really is.

Car-sharing also lets each person decide how much they value residential parking because car-sharing members pay only for part of a parking space, in proportion to how much they drive. Unfortunately, under San Francisco's current system of minimum parking requirements, the costs of parking (often as much as $40,000 per space) are bundled into the cost of new housing. Either you have a parking space or you don't. If you have one, you are paying an inflated price for your housing; if you don't, you have less access to a car when you need one. By offering people car-sharing instead of a personally-dedicated parking space, we can cut down on housing costs, reduce land area devoted to warehousing cars, and increase mobility for San Franciscans.

City CarShare

A group of transit activists and planners are starting car-sharing in San Francisco under the name of City CarShare. In October of 1999, the San Francisco Board of Supervisors voted unanimously to support City CarShare's three-year car-sharing pilot project. Some of the features of City CarShare's service include:

Decentralized and self-accessing fleet

Where typical rental car agencies store vehicles in large parking facilities and rely on attendants to check vehicles in and out, a car-sharing operation uses a decentralized, neighborhood-based, self-accessing system. Members call a local number to reserve a vehicle, walk to a nearby parking spot, and drive off. The access system replaces the ongoing labor cost of attendants and desk clerks with one-time capital costs of reservation and access technology. This "high-tech" approach to connecting people with vehicles is both less expensive than relying on paid attendants and more convenient in that it allows shared vehicles to be kept close to members in all neighborhoods of the city.

Different vehicles for different uses

Most vehicles offered by a car-sharing service are small and fuel-efficient, but pick-up trucks and vans are also made available to members who need to carry something heavy or take several people on a trip. Car-sharing ameliorates the tendency of private car owners to purchase a vehicle large enough to accommodate occasional camping or hauling tasks. Members of a car-sharing organization are free to use small cars for most trips while remaining confident of being able to get specialized vehicles when the need arises.

Mix of members

Car-sharing appeals to several major groups of people: non-car-owners who can use the increased mobility to avoid purchasing a car; owners of a single car who would be willing to sell it and become "car-free"; households with two or more vehicles that would use the flexibility of car-sharing to reduce their ownership to one vehicle; and businesses that would make the vehicles available to employees for work-related purposes, cutting down on car-commuters. This mix of potential users is important because it ensures that the vehicles will be used at different times throughout the day, balancing out the demand cycle.

Starting Now

Car-sharing makes it easier for people to give up their car and to switch to more sustainable ways of getting around. For the environment, that translates into reduced emissions, less fossil fuel consumption, and less waste from manufacturing new cars. For San Francisco, fewer cars on the streets, less space devoted to roads and parking lots, and more space available for the things that make our city great, such as farmer's markets, public parks, sidewalk cafes, and community gardens. The board of City CarShare is organizing to bring car-sharing in San Francisco with the goal of opening its doors before the end of the year. Our project is inspired by dozens of car-sharing projects already successfully lessening the impact of the automobile in Europe and Canada.SPUR logo

Elizabeth Sullivan is the executive director of City CarShare.


About the Authors: 

Elizabeth Sullivan is the founder a former executive director of City CarShare and the former program director of the Neighborhood Parks Council.