What is Car Sharing?

23. Mar 2021 | By Tim Ruhoff

The German legislator understands Car Sharing as the organised sharing of one or more cars on a consent basis. Unlike traditional car rental, car-sharing allows you to rent cars for short periods of time - even by the minute. Car use is charged at a time or mileage rate, or mixed forms of such rates, including operating costs. Sharing cars between neighbours and acquaintances falls under private Car Sharing.

Definition Car Sharing

The English term car-sharing is used in most languages and countries for booking vehicles on a car-sharing platform. As early as 1975, the term appeared in the headline of an article in the London Times: "Car Sharing in London Traffic Facilitation Plans". Pool vehicles are either distributed in fixed rental car parks in a city or large town, or parked on public roads. Fixed rental stations are often located in municipal transport hubs such as tram junctions, train stations and bus stops where they are easily accessible to users. Pre-reserved vehicles are mainly used to reach more distant destinations from these hubs. There are various forms of organisation, some of which are based on a car rental system.

The vehicle must be returned to its original location before the expiry of the booked time. The user must decide in advance where the car sharing operator should deliver the car. Free-float pool vehicles can be parked in any free parking space in a clearly defined usage area. Car sharing is a "blended mobility" tool. It cannot and does not replace public transportation. This concept is rather intended for occasional trips or transport.


Stationary Car Sharing

Stationary Car-Sharing is cheap and widespread. In a sense, stationary car sharing is the archetype of the current car sharing model. With this option, the cars are located in fixed parking spaces and must be returned there after the trip. The biggest disadvantage of this form of car sharing has already been mentioned: the lack of flexibility. You can't leave the house and find a suitable car just around the corner, you have to get to the nearest station first. For this reason, landline car sharing is less suitable for spontaneous short trips.

Stationary Car-Sharing, on the other hand, is always advantageous if you want to cover long distances over a longer period of time. Many providers charge separate fees for time and kilometres. At Stadtmobil Stuttgart, for example, a class A car costs €1.55 per hour during the day, and the fare per kilometre is €0.21 (up to 100 kilometres). This means that the price remains reasonable even if you leave your car for a long time without completing your reservation. On the other hand, there are free-float providers that charge per minute. This can quickly become expensive if you leave the business area and therefore cannot complete your booking.

Another advantage of stationary Car-Sharing is its distribution. While free-floating providers such as DriveNow and Car2Go are almost always found in major cities (and even only in certain areas), there are stationary operators all over Germany - even in the countryside. As a result, this form of car sharing makes a valuable contribution to traffic change, as future mobility must be holistic and not limited to urban centers.

Free-Floating Car Sharing

Free-floating car sharing is a new market segment within traditional car sharing. With this type of system, users can book a car at any time and within a certain area. This type of car sharing currently exists in about 34 cities in nine countries, in cities with very different demographic characteristics and urban forms.

Shared pool vehicles could be part of new mobility services that promote inter- and multimodal travel and serve as an essential component of energy and climate strategies in the transport sector. However, empirical data on the use of free floating car sharing is usually not available for research purposes. To this end, new data collection methods need to be developed to assess the impact of car sharing schemes.

Members of the scheme have access to a fleet of vehicles which they can hire as and when they need them. The fee is based on the rental time in hours or minutes and covers insurance, maintenance, fuel, and often parking. In the newer iterations, called free-floating car sharing, vehicles do not have parking spaces but can be parked anywhere in a city's operating area, which can be as large as 100 km2. Since cars do not need to be returned to their starting point to complete a rental, this service is also referred to as one-way car sharing.

The ideas for a second generation open one-way car sharing service date back to the 1990s. The first pilot tests were carried out in the early 2000s. The first one-way car sharing provider was Daimler Inc through its subsidiary car2go. In 2008, car2go launched a pilot program in Ulm, providing a fleet of 200 diesel-powered Smart ForTwo vehicles to Ulm residents. Vehicles can be picked up or dropped off anywhere in the service area, which included most of the city center. The service uses GPS technology to track the location of each car.

Corporate Car Sharing as an employee benefit

Corporate car sharing or car pooling means that employees of a company share a common pool of company cars and use these cars regularly. Corporate car sharing is similar to public car sharing: vehicles are booked by employees for several or just one trip for a certain period of time and are parked in the company's parking lot or in front of their own door after the trip is completed. In order to be able to offer corporate car sharing in the fleet at all, a framework agreement must be concluded in advance in which the general conditions are defined. Only then can company employees use Car-Sharing independently. If an employee reward policy is in place, it is important to adhere to it.

Corporate car sharing is particularly economical for a company if its own fleet is rarely used and the costs for its own pool and management are higher than the total costs associated with car sharing. Corporate car sharing offers a sustainable and flexible mobility solution for your business operations. However, before you adopt corporate car sharing in your business, you need to know exactly how busy your vehicle fleet is. Corporate car sharing offers many benefits - we have summarised the most important ones.

Many company vehicles are used inefficiently. With corporate car sharing, you can make the most of your vehicle fleet to reduce the total number of cars and leasing costs. Corporate car sharing promotes sustainable corporate mobility. Instead of company cars, in many cases you can reduce your company's fleet by using pool vehicles and thus reduce CO2 emissions.

The company car is still seen as a status symbol in many industries, but young companies in particular are focusing on flexible mobility that benefits not just one company employee, but at best the entire company. One thing is certain: giving up mobility altogether is not an option. Thus, the pool car is a successful alternative for many employees.


Privates Car Sharing

The term private car sharing refers to the sharing of a vehicle or vehicles where the owner lends their vehicles to others for a limited time. This concept is also referred to as neighbourhood car sharing, private car sharing or peer-to-peer car sharing.

Private car sharing can be seen as a special form of booking vehicles, where participants enter into a private contract for the shared use of one or more vehicles. In this case, car sharing is carried out privately - usually by a small group of known people. However, private car sharing can also be arranged professionally by an operator via car sharing software, who takes care of the booking and billing system.

In order to legally support this model of car sharing, the Verkehrsklub in Germany, for example, offers a neighbourhood car contract. In addition, there are also various providers of suitable car insurance. Depending on the system provider, there are different models of car and damage insurance. The regular car insurance of the car owner usually does not cover the full damage if the owner hands over his car to a person who is not listed in the insurance policy. In the event of a claim, the regular insurance company may refuse to pay if it is found that the terms of the policy have been violated.

Combined Car Sharing offers

Car sharing combi offers combine the advantages of stationary offers with the free-floating offers for the entire car sharing fleet with a single supplier and in one tariff system. Customers can choose the appropriate type of offer for each purpose without changing the system. CarSharing combined offers can thus further optimise the benefits of Car-Sharing for clients by avoiding unnecessary car journeys.

Previous research has shown that stationary CarSharing systems drive vehicle drop-off far more than purely free-floating systems. Initial results now show that combined offers can achieve stationary car sharing results and possibly even surpass them.

The use of the combined CarSharing offers differs from the offers of car2go and DriveNow. The tariff system and the range of offers reduce the risk that free-floating vehicles are only used for short trips through the city in parallel to public transport. Therefore, the combined proposals seem to be a good way to further integrate the free-floating business into the ecological network.

The service providers book-n-drive and stadtmobil Rhein-Neckar have a positive balance for their combined offers: Customer reviews are very positive for both projects and orders. Thus, both providers are equally confident that the combined Car-Sharing has already passed the test phase.


Distinction between peer-to-peer and RideSharing

The booking of vehicles can take place between different actors. For example, between companies and individuals ("B2C"), a company and other companies (" B2B ") or between individuals. In a peer-to-peer car sharing platform, individuals share vehicles using peer-to-peer car sharing software. Individuals act either as providers (" peer-to-peer providers ") or as users (" peer-to-peer consumers ") of the resource. However, the nature and orientation of intermediaries can vary widely.

RideSharing is the common use of a vehicle to transport people from one place to another. This includes both a classic private car ride with friends, acquaintances or work colleagues as well as booking a trip through a professional agency. In the latter case, a distinction is made between traditional stationary car sharing agencies and online car sharing agencies. Here, for example, a driver who still has free seats in the car for his route can offer his trip as a ride-sharing opportunity. This, in turn, can be booked by people who have to travel the same route for a fee.