Hold off on Zipcar’s Eulogy: Planners are Key to Carsharing’s Next Act

The recent purchase of Zipcar by Avis is just the latest sign that carsharing is in a period of flux. As shared-mobility evolves in the next few years, planners can play a crucial role in ensuring that the industry serves those in need of alternatives to car ownership, generates revenues for municipalities, integrates with public transportation, and delivers wider benefits.

4 minute read

January 14, 2013, 2:26 PM PST

By Scott Le Vine @scottericlevine

The news that Avis is buying Zipcar is cause for alarm to some – won’t a plodding conglomerate simply smother the innovation and creativity that brought carsharing from promising concept to a thriving industry with a million-plus members?  Since when did a car rental company care about sustainability, or doing well by their customers, or indeed anything but making a quick buck?

But now’s not the time for eulogies.  Carsharing is in a period of flux, and events are moving rapidly.  As Zipcar’s long-deposed co-founder puts it: this is “part of the transition to the future”. And planners will be key to this transition.

So let’s look at two important questions:  1) What’s the big picture here?, and 2) What exactly is the role for planners?

First, carsharing and car rental are not nearly as distinct as some carsharing proponents argue.  Carsharing is by the hour, no?  Well there’s nothing to stop car rental firms from more sophisticated pricing.  But carsharing has members while rental has just customers, right? Not in Switzerland, birthplace of carsharing, where you can use it on a one-off basis with no subscription – which sounds an awful lot like car rental.  I’m not the only one that has trouble drawing a line between them: research by Joe Schwieterman shows that carsharing sometimes inadvertently gets caught up in taxes on car rental (visitors don’t vote, right?) with eye-watering tax rates the unintended consequence.

The rental industry sees carsharing as a natural evolution of their business: the application of new business practices, enabled by networked mobile computing, to an old need.  They were sponsoring early carsharing pilot projects back when today’s Zipsters were in diapers.   Avis, in public, has been studiously un-interested in carsharing until now – but not so regarding the possibilities of ‘virtual car rental’.

Car rental firms see policies that support carsharing as one-sided, and they may have a point: Research for the British rental industry body (BVRLA), by my colleague Sally Cairns, due out in the next few months, is expected to show that car rental can provide distinct sustainability benefits, in similar ways as carsharing, not least by enabling some users to own fewer cars than they otherwise would. 

And let’s not forget: carsharing is changing in other important ways as well – and Zipcar had arguably fallen a step behind, a judgment supported by its sliding share price. There will of course be important segments of the carsharing market that can’t be efficiently served by Avis-Zipcar or Hertz, but in the next few years the line between carsharing and car rental will become ever less distinct.  No one quite knows how to make real money in carsharing right now, but the big car renters don’t want to be the next Kodak, watching in blissful ignorance while photography went digital.

But what is the role for planners?

Carsharing doesn’t exist in a vacuum, and place matters – greatly.  Whichever ways shared-mobility evolves in the next few years, it will continue to depend on privileged access to public street space in very specific places and under very particular terms.  Shared-mobility hinges on public sector buy-in; the industry knows this & acts accordingly.  It can’t reach its market without planners helping – and letting – them.  In 2013 planners will need to take off the kid gloves, now that in many cases we’re dealing with serious businesses (and ones that can look after themselves, thank you very much).  In Zipcar, Avis is buying a sort of public trust, and planners will be responsible for seeing that they are a good steward.

The question for planners to reflect on, then, is what are reasonable policy objectives to pursue.  A few of my suggestions:

  1. Fairness: Planners should ensure these services reach those most in need, and who have the most to benefit by avoiding the fixed costs of car ownership.  Not having a credit card or bank account shouldn’t be a barrier.  Also, big changes are taking place now in how young adults travel; there is an opportunity to encourage operators to take on young drivers as they become licensed, starting them on ‘judicious automobility’ right off the bat.  Emerging technologies can help manage the risks.
  2. Wider benefits: Reductions in emissions, traffic levels and parking needs are possible – but planners will need to bear in mind these are not the only goals worth achieving, and that impacts are likely to change over time.  It will take many years to fully understand the impacts.
  3. Revenue: The market can support, in places, payments for permits-to-park of thousands of dollars per shared-car per year.  In a time of austerity such a new stream of revenue can help meet planning objectives. 
  4. Integration with public transportation: Carsharing tends to be used quite infrequently, and can thus be complementary with public transportation, bicycling and walking.  There are major opportunities for joint ticketing, last-mile solutions, etc. that planners hold the keys to.

Critically, planners will need to keep towns and cities from signing long-term contracts with operators while technologies and services are evolving rapidly.  (Washington DC’s four generations of parking deals in the 2000s are instructive.)  Flexibility and room for maneuver will continue to be essential policy instruments for planners in this time of change, as we seek to ensure the public interest gets a fair shake.

Scott Le Vine

Scott Le Vine, AICP is an Assistant Professor (Urban Planning) at the State University of New York (New Paltz), a Research Associate at Imperial College London, and a Visiting Professor at Southwest Jiaotong University (Chengdu, China).

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