Tuesday, September 8, 2009

More on North American Carsharing 2009

Roy Russell, founding Chief Technology Officer of Zipcar, read yesterday's feature article on carsharing in North America and immediately wrote to add his experience, thoughts and views on this to further round out the big picture on carsharing in the US . (Additional comments are as always warmly solicited.)


I haven't been with Zipcar for a while now so my only source of information is whatever they choose to say to the press -- I don't have any better numbers that Susan does.

However, I do wonder what the limits to growth of car-sharing are and what would encourage it to be more widely adopted. I do think that it is potentially a multi-billion dollar business, both in North America and worldwide. However, in order to achieve this I think there are lots of regulatory practices that need to change that will make the full costs of personal car ownership more apparent and place car sharing vehicles on an equal footing with these private vehicles.

For example, the cost of parking for residents of most cities is heavily subsidized by the municipality. It costs me $8 per year to be able to park my car anywhere on the city streets with a "resident" permit. However, a car sharing vehicle which is shared amongst 50 "residents" must pay the full commercial cost of parking, perhaps $1200 per year or more. If the cost of a resident permit were increased then many more residents would dispose of their under-utilized personal vehicles, opting for the use of a car-sharing vehicle instead.

If the cost to operate a personal vehicle included a per-mile charge for driving on public roads then we'd be more inclined to use our personal vehicles less, and more of us would dispose of them as the under-utilized assets-turned-burdens they become.

As Susan mentions, insurance is also an important factor. If government regulators encouraged insurance-by-the-mile, where you pay depending on how much you drive then people would respond by driving less. And again, the less you drive, the less you require your personal vehicle for regular daily use, the more appealing car sharing gets.

So I think it will take some enlightened municipalities to lead the way and stop subsidizing personal car ownership as much as they have been. This will result in structural changes that will naturally encourage large-scale changes in behavior. Once the benefits are realized by a few, there will likely be broad adoption of improved practices in most cities.

I have encouraged my local city officials to increase the resident parking permit fee. Their reaction, while predictable, is disappointing. They agree that it makes sense and yet they think that it isn't politically possible. Changing the status quo is hard, made even harder by the fact that this change is an increase in fees or taxes. I think the way around this is to somehow tie the increased revenue to explicitly pay for something, rather than simply fill the general coffers. Locally, I'm pushing for the added permit revenue to pay for increased alternative transit improvements such as bike lanes and bicycle parking. I'm hoping this will generate enough political support to offset the negative reaction from car owners unhappy with the increased fee.

Roy Russell is a software developer, entrepreneur, founding CTO of Zipcar, and Meadow Networks CTO. Prior to that he managed software development for several startups and large high tech companies. (Mr. Russel's picture at the top of this page is a copy of a painting executed by his youngest daughter.)

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