What’s Right About Car Sharing

By Hart Schwartz | February 2016

For the past 6 months, I’ve been writing a peer-reviewed study of the recent explosion in car-sharing and ride-sharing (Zipcar, Car2Go, Uber, etc.). In a draft version of the study, I wrote of “business model growth barriers,” documenting issues such as insurance, theft, regulation, real estate costs, etc. However, peer review persuaded me that I may have been a little too hard on these companies – after all, they must be popular for a reason, right?

My recent move to Austin, Texas prompted me not only to use these services for the first time, but also to purchase my first smart-phone. In fact, I needed the phone primarily to use sharing economy transportation. As I settled into Austin, I discovered sharing-economy, phone-based travel to be indispensable.

As background, before moving to Austin I had not owned a vehicle for over a decade, during which I mostly lived in places with very frequent public transit service, such as Toronto, New York, or Washington DC. In these denser cities, I had preferred to walk whenever possible and had even actively resisted getting a smartphone due to annoyance at its intrusion into my social interactions. But in Austin, this didn’t work. Let me explain what happened to make me become a “believer.”

My very first evening in Austin, I got exhausted by several to-from trips by foot, to Wal-Mart to purchase basic household supplies. Even though the Wal-Mart was just three-quarters of a mile away – extremely close by local standards! – the walk was totally disorienting, because it was along an Interstate frontage road with very little cover between myself and the road. Whereas I had been used to walking the densely packed, historic, and architecturally intricate buildings of the “embassy row” section of Washington DC in the evenings, I was now walking along a barren stretch of Interstate in an unfamiliar city, just to get to a Wal-Mart Supercenter at 10 pm to buy some towels and toothpaste.

The next morning, I sought to go to a co-working space (2 miles away) where I figured I would spend the day getting stuff done and interacting with local “knowledge workers.” But how would I get there? And there it was. It was like a shimmering mirage with a halo over it, and angelic music playing. A Car2Go vehicle sat there, on the street right in front of my apartment building. Hallelujah, sing the praises!

At this point, it was only the first inkling of my conversion, since I did not yet have a smart-phone. Rather, I used my physical Car2Go card, which was in my wallet, and after touching it to the dashboard of the car, I was driving, arriving at my co-working space in 6 minutes, for a grand cost of about $4.50, instead of walking to a bus, waiting, paying $1.75, waiting some more, and then walking some more. A dramatically inefficient trip became efficient. I have seen the future – and the future is now! It may not be hoverboards but it’s pretty damn close.

As time passed, it became clearer and clearer that I would become converted not only to Car2Go, but also to a smartphone so that I could access the full range of sharing economy travel services. Alas! I set out to race to the nearest ATT store to finally get a smart-phone. “Race” is a relative term, though, when you don’t even know where the store is and you are waiting what seems like endlessly for a bus that may or may not take you to the place whose location you’re not even sure of. In my stymied confusion, I made a vow to myself that no matter how annoying I had previously found smartphones to be, that this time I would give them a full and complete trial. Time to join the modern world.

And ever since then, this is exactly what I’ve done. Once I switched to full-time smartphone use, not only did I start reading a lot of online newspaper articles on my phone, but more to the point, I found travel more efficient. For instance, if I were tired in the evening but wanted to fit in some exercise and a trip to the grocery store after having worked all day, it became possible. What would have been a very long, convoluted ordeal with the bus became a snappy, specific, convenient itinerary. Get in a Car2Go, travel a mile, leave it, get back in, travel another mile, leave it, do an errand, hail an Uber for the next leg. A mile in a shared vehicle saved 15 to 25 minutes of walking, not to mention the physical energy which is conserved for actually performing the errands once at the destinations.

These may seem like small benefits, but they really do add up over time. The new services significantly reduce the grind and frustration of not getting where you want to, when you want to. This grind can accumulate over time and become exhausting and immobilizing. In other words, the range of choice for an average day is greatly expanded, because you know that no matter what unexpected tasks may arise, the flexible availability of the car-sharing services means that you will be able to accomplish what you set out to do on any given day.

What I hope I’ve answered, in this personal narrative, is the question of “what makes this worth the money?” These services didn’t exist a decade ago – and once they were invented I actively ignored and avoided them – and now they appear indispensable to me. I am willing to pay for them. How could this be?

Put another way, “what is the conversion factor?” Most companies can only dream of situations where they invent something so useful that droves of people who never heard of it before now find it so crucial that they are willing to pay for it. I am more than glad to put up with the smartphone’s intrusion into the rest of my life. For every social dance where I find it awkward to have the phone quietly demanding my attention while I am dancing, or for every dinner party where I find it annoying that I am tempted to read the news on my phone during lulls in the conversation, I have to remember that since I don’t own a car, I may possibly not have ever arrived at this social event at all, without my phone tapping into shared transportation.

It’s a very ironical dance of benefits and drawbacks. I confess that when possible, I do occasionally leave my phone at home so that it doesn’t distract me. But such occasions are far and few between. I need that thing!

Read more from the February Issue of our Fuel for Thought newsletter.

Hart Schwartz is the Research Consultant of Clarify Consulting Research. He can be reached at hschwartz@clarifyconsulting.com.