Image: Getaround.com
MPC's Research Assistant Cecilia, who authored this post, and her husband share their own convertible on Getaround.com
Owning a car has long been viewed as a symbol of freedom and independence, values deeply rooted in the American psyche. However, new trends suggest that car ownership might just be one of the things many Americans want freedom from. As we reported a few months ago, Millenials are leading this change by purchasing far fewer cars than their parents and choosing to live in more urban and connected environments. Does this mean young people are giving up their freedom to move around? Absolutely not. They are simply not interested in owning a vehicle so much as having access to one when they need it.
The proliferation of vehicle sharing services is evidence of these shifts in preferences. Carsharing, just a few years ago at the forefront of transport innovation, has already become mainstream; earlier this year, AvisBudget Group bought Zipcar, the world’s largest car-sharing company, while Chicago’s very own IGO just announced its acquisition by Enterprise Holdings.
At the same time, a new model is gaining popularity: peer-to-peer carsharing. Unlike their “traditional” counterparts, peer-to-peer companies don’t have a dedicated rental fleet but instead take advantage of the army of private cars that, at any given time, are sitting in garages and parking spots. Car owners can put their vehicle up for rental during times when they don’t drive, receiving part of the revenue from rental while being covered by specific insurance. Renters, on the other side, get to enjoy rates typically lower than other rental services, a capillary network of rental locations (they may just have to knock on their neighbor’s door) and a wide variety of car models. This approach was first tested in California, where it quickly gained popularity. In Chicago, two peer-to-peer companies launched last year, Getaround and RelayRides. Hundreds of cars are already listed for rental, although it remains to be seen if they manage to attract a sizeable number of renters.
And what about the increasing number of people without a driver’s license? Another branch of the sharing economy is there to serve them: ridesharing, which capitalizes on the fact that most cars on the road only have the driver’s seat occupied. Usually, ridematching services (such as Chicagoland’s Pace Rideshare) focus on regular commuting trips, but new mobile apps are expanding this option to single, one-off rides. Chicagoans, for example, can use SideCar or Lyft to locate an available driver and request a ride. A registered driver will pick them up at the requested location and drop them off where desired. At the end of the ride, you can compensate the driver with a voluntary donation paid through the app.
Through a more efficient use of existing cars, these services allow people to live car-free, avoiding the biggest costs and hassles of car ownership (from purchase price to insurance, from parking to maintenance), while enjoying the convenience of driving when necessary. Rather than a costly possession, the car becomes a useful service. Clearly, the shift has just begun and it faces some challenges, particularly related to safety concerns and applicable regulations. However, these services reflect a general trend: From bike-sharing to apartment swapping, from designer dresses to sports equipment, the “sharing economy” is becoming a widespread model that is likely to stick.
The roots of this phenomenon are multiple. The economy surely plays a part: In a time of tighter finances, people may choose to rent rather than buy, or decide to share their existing properties to earn some extra cash. Technology is another important factor: Not only do we now have instant access to information and real-time data, but social networks have made us used to connecting with people online and “sharing” contents. Another strong influence, however, takes us back to values: Sharers are often motivated by a sense of community and the desire to help others. In any case, whether the sharing phenomenon represents nothing more than a lull in car consumption or signals the end of individualism in the U.S., right now rideshare symbolizes freedom from the burdens of ownership and isolation. Rather than dreaming of independence in the form of a car, Americans might just be looking for it in the form of a ride.
MPC Research Assistant Cecilia Gamba authored this post.