Sharing Economy: Advantages & Disadvantages

By Hart Schwartz | March 2016

In the previous month’s blog, I explained how I went from walking or using public transit, to using car-sharing services (Uber, Lyft, Car2Go, Zipcar). I use these services so often now, that I find them indispensable.

So, this month I will explain the kinds of trips that I used each company for, and why—essentially a comparison of service options from the customer’s point of view. My goal is to highlight the differences between the competing value propositions and better understand the texture and subtleties of the market.


For me, Zipcar is the best for longer trips to accomplish specialized tasks that I couldn’t easily accomplish in any other way. This is because you have to book a Zipcar for at least half an hour, and you have to return it to the spot where you picked it up from, so you’d better know where you’re going in advance and it has to be special enough to justify a concrete block of time and money.

For example, I used Zipcar to take a 3-hour ride to outlet malls to purchase a ton of stuff that wouldn’t fit into a Car2Go and would be weird in a taxi. I’ve found that for these kind of trips to a targeted place in an outlying area, Car2Go cannot be used because the entire time the Car2Go is out of the home area, you cannot end the trip and thus are stuck paying a hefty $15 per hour, a rate which is several dollars higher than the Zipcar range of $8 to $12 per hour for most cars. In addition, the Car2Go Smartfortwo vehicles are generally too flimsy and have too little “oomph” with their acceleration to feel safe taking them on a highway journey to suburban destinations. As for Uber and Lyft, you’re never quite sure until you get to the destination, whether there will be another driver available for the return trip, so in the face of this uncertainty Zipcar appears more reliable. Moreover, the price for a lengthy city-to-suburb, suburb-to-city round trip has typically been quite a bit higher for Uber or Lyft than for Zipcar.


For short, specific rides in the city, Car2Go can rarely be beat. For a short urban ride, like going to a café two miles away to do some work, or a mid-day social meetup, Car2Go is great. If you don’t have time to go find a Zipcar, and don’t want to wait for an Uber or Lyft to show up, you just find a Car2Go on the app, click “start rental,” and hop in. Since I live in central Austin within the home area of roughly 28 square miles , there are several hundred vehicles within a fairly small area, so there is nearly always a Car2Go vehicle available close to my location on the smartphone app.

If you are very specific about your route, the 39-cent-per-minute charge of Car2Go allows you to bring the price dramatically below a comparable Uber or Lyft ride for the same distance. At this price point, and with many vehicles available, Car2Go is an ideal option for point-to-point, short trips that last a few minutes.


I have mostly found these companies the most useful for social visits, such as a one-time visit to someone’s residence in the suburbs, or for a night-time outing where I don’t want to worry about the hassle of parking (even Car2Gos need to be parked!). Uber or Lyft are ideal for these spontaneous situations.

A major limitation, however, is that in a low-density city like Austin, “the suburbs” could mean a 15-mile drive to get from my city center apartment to someone’s suburban location. With all expenses included, Uber and Lyft charge somewhere between $1.75 and $2.25 per mile! It has often been $25 to $35 each way, which when you remember that you need to make a return trip, means that such trips end up costing $50 to $70. To be fair, Uber or Lyft are cheaper than taxis for this kind of city-suburb round trip, since taxis cost closer to $2.50 or $3.00 per mile.


Overall, during my time in Austin I have noticed myself taking Car2Go the most (several times a day); then Uber or Lyft (two or three times per week); and finally Zipcar on rare occasions (maybe twice a month). The flexibility of Car2Go, where you can roam all over the “home area” without worrying about returning the car to its original spot, is extremely appealing. In addition, the minute-by-minute pricing offers a sense of fine-tuned control over price-per-trip, which the other services do not offer. In contrast, Uber and Lyft are pricey except for the shortest rides, more than I would want to pay for the average trip. Zipcar requires you to return the car to the original location, which can be very tedious and unnecessarily run up the price in comparison to Car2Go.

If I had to pin down the aspect of Car2Go that appealed to me most, I think it’s the way in which it simulates personal vehicle ownership, at least if you live in the home area. The wide availability of vehicles in the home area means that you can almost always find a vehicle available nearby. The ability to leave the vehicle at the destination and end the trip, means that it’s very similar to when you have your own car. Many times, I have driven a Car2Go somewhere, stayed there for a couple hours, and then hopped right back into the very same Car2Go, in order to get home. How is this not like owning your own vehicle? It’s actually quite similar, in terms of independence and reliability.

My larger question, and the one I want to end on, is this:

What does it say about the future of vehicle ownership, if I have found that the sharing service that I most enjoyed, is the one that most closely approximates traditional personal vehicle ownership? Does this mean that the future may not actually turn out to be so different from the past?

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

Ben Wear, “Car2Go home area in Austin tightens up to keep cars accessible,” Austin American-Statesman, 8/16/2015,

Hart Schwartz is the Research Consultant of Clarify Consulting Research. He can be reached at