Baby, you can drive my car

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05 Jul 2019 by smartleasing

The so-called sharing economy is booming, and it’s not limited to rideshare services such as Uber and accommodation service Airbnb. Car sharing is also an expanding sector. If you don’t own a car, advances in digital technology make car-share services an easy, cost-effective way of getting around. And if you do own a car, it can also be a little money-spinner if you don’t mind a stranger getting in your driver’s seat.

Who’s doing it?

Lots of people. According to recent Roy Morgan research, 200,000 people in Australia are using car-share schemes, and this figure is expected to grow to 1.5 million in the next ten years. The trend is expanding so rapidly that business information analyst IBISWorld predicts car sharing will be one of the top five growth industries in 2017-18, generating $103 million in revenue.

The key players

There are two different types of car sharing: companies that manage a fleet of vehicles and rent cars on-demand, and facilitators that enable private citizens to list their car for hire.

Australia’s largest car-sharing provider is GoGet, which has 3,000+ vehicles throughout the country and over 100,000 users. Other fleet providers include Flexicar and GreenShareCar. Neighbour-to-neighbour car-share facilitators include DriveMyCar and Car Next Door.

Fleet operators

Companies such as GoGet manage a fleet of branded vehicles parked in designated spaces across the city. Drivers sign up to a plan, starting at $49 a year, find and book a car by the hour or day(s), use a smart card to access the vehicle, and drive away.

The hourly rate varies depending on which plan you sign up for. The $49 starter plan costs $10.90 an hour for a standard vehicle, plus 40 cents per kilometre, or $89 a day including 150km of travel. Other plans charge a monthly fee but lower hourly rates. All plans include petrol, and you can choose from varying levels of insurance liability.

Neighbour-to-neighbour car sharing

Thanks to technology, anyone with a reasonable car and internet access can list their vehicle for private hire by the hour, day or longer. Car Next Door's community of 130,000 car sharers rent cars for as little as $5 an hour or $25 a day.

Borrowers apply online and are vetted and approved within three hours. They then select a car near them and use a lockbox code on their phone to retrieve the keys. The owner sets the hire rate and chooses from three distance rates: 21 cents, 33 cents or 45 cents per kilometre. Membership is free, but there is a $5 booking fee, although this is waived for frequent users on a $19-a-month plan. Fees include petrol and insurance.

DriveMyCar specialises in long-term rentals, providing private car leases from seven days to 12 months, starting at $21 a day.

What are the benefits?

Car sharing is a cheap and convenient way of accessing a car for intermittent use. It saves drivers the cost of buying a vehicle as well as the ongoing running expenses, including petrol, servicing, registration and insurance. The terms are much more flexible than traditional car-hire companies, and vehicles can be sourced in the user’s neighbourhood.

The scheme can also be a financial bonanza for car owners who can earn cash – up to $7,000 a year with Car Next Door – on a vehicle that would otherwise be sitting idle (owners pay a $60 monthly fee for insurance plus a share of their earnings).

Proponents of car-sharing say it also has environmental benefits: reducing congestion, decreasing car ownership and freeing up inner-city parking spaces.

Just as companies such as Airbnb have revolutionised the way we travel, car sharing is set to change forever the way we view our vehicles and car ownership. With a little organisation and some careful research, you can either cut out the costs of owning your car while still having the flexibility of a runabout on hand, or boost your income by putting your otherwise unused car to use.