Can Car Sharing Facilitate A More Sustainable Car Purchase?

Paper in proceeding, 2015

Car sharing is normally seen as an alternative for the car; however for many households the option of not owning a car may be unthinkable. In this study we explore the idea of combining car sharing and vehicle ownership in order to change the consumer behavior of car purchases in a way that reduces energy usage, air pollution, and greenhouse gas emissions by improving the fuel efficiency of the consumer fleet. We consider the personal vehicle as a bundle of functional attributes (such as seating, luggage space, performance, all-wheel drive (AWD), towing, roof rack) and symbolic attributes (such as vehicle brand, new technology, environmental friendliness). In this case we look at the distinction between “daily use” and “peak use” attributes. If the vehicle attributes could be unbundled, the personal vehicle would include only those features needed on a daily basis, likely reducing capital costs and improving fuel economy, with car sharing or another service providing the occasional “peak use” features, increasing consumer welfare. However, the transaction costs of unbundling the complete “daily use plus peak use” vehicle into a “daily use” vehicle and a shared “peak use” vehicle would have to be sufficiently small for most consumers to consider this option. In the paper we qualitatively explore what the car sharing service would need to look like for the transaction costs of the service to outweigh the capital investment and operating costs of a bundled vehicle. We also explore the readiness of car sharing or rental car companies to provide this type of service. The study consists of three parts: the first being an overview of the related literature on car choice and car sharing. The second part consists of an inventory of available models in car sharing fleets in order to assess the availability of “peak use” vehicles. In the third part we interview experts and representatives from car sharing and rental car companies in California and Sweden. We find that car sharing today does not cover the needs for unbundling the vehicle. Most car sharing services today have focused on providing the primary vehicle for people without a vehicle. There are not enough “peak use” vehicles available in these services to guarantee access when the consumer needs them. However, new business models, such as combining business and private members, traditional car rental companies joining the car sharing space, and the growth of peer to peer car sharing, may offer the possibility to widen the vehicle models available.