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Why No One You Know is Driving his Own Car This Weekend

NEW YORK (MainStreet)—Rental cars have been a mainstay of American travel for the last century. Early rentals, within a few years of the Model T's appearance, cost 10 cents a mile. Considering inflation, today's average of about $60 a day isn't such a bad uptick for customers of the Big Eight: Alamo, Avis, Dollar, Enterprise, Fox, Hertz, National, or Thrifty—all at a far-flung airport or strip-mall not-so-near-you.

But, the car rental industry has moved deep into many American cities, where car ownership is less of a necessity with multi-modal transit options. Plus, the hassle of parking restrictions, tickets, higher insurance premiums and minor dings also makes car ownership less desirable.

"I don't see car ownership being a lot more expensive, necessarily, in the city, than elsewhere," says Chris Brown, Executive Editor of Auto Rental News, "but, psychologically, there is a real movement to seek specific transportation forms for specific purposes in specific locations rather than the all-purpose car."

In this crowd-sourced economy, membership-based "car-sharing" options like the ubiquitous Zipcar, have combined the option of renting with the convenience of proximity, targeting urbanites with particular needs—like moving that EXPEDIT bookshelf you just bought on Craigslist. "Share" sounds a little more, shall we say, crafty or conscientious than the corporate-sounding "rental." To clarify: you are renting a Zipcar for a fee—not borrowing it or sharing it.

Nomenclature aside, Zipcar places its vehicles within spitting distance of the consumer's house or apartment at a designated parking spot or terminal (similar to bike share programs), and governs the whole transaction with a web and app interface.

Zipcar started in Cambridge, Mass. in 2000, spread to Washington, D.C. in 2001, and New York in 2002. By decade's end, its cars could be found in a dozen other American cities (after mergers with Seattle-based Flexcar as well as London-based Streetcar) and doubled its membership rolls.

It also convinced some people that, perhaps, they really didn't need a car, after all.

Kate Thomas, who works in government relations for a national non-profit based in Washington, D.C., sold her car after moving to the city in 2005. But, after several years of bumming rides with friends or figuring out bus transfers to run errands, she joined Zipcar last year.

"I signed up just before I changed apartments a mile away—for all the little errands related to a move," she said. "Now I Zipcar occasionally for big grocery runs."

The caveat? Demand regularly outstrips supply. "Zipcar meets my car-sharing needs, but it does require some advanced preparation because reservations can fill up easily, especially during peak times like weekend days," she said.

Robin Jarvis, a Chicago librarian, signed on to car-sharing for similar reasons and sees the same convenience benefits, adding, "There is no need to deal with a rental car agent every time you want to run an errand. Plus, there are cars located in my neighborhood, so it relieves a lot of the logistical headache."

You probably have your own anecdotal evidence of Zipcar's populist success—just count how many you see parked on the street or careening around the corner. And, that success has made the Big Eight nervous enough to start paying close attention.

In 2008, Enterprise started WeCar (which became CarShare), and Hertz started Hertz On Demand (which encourages customers to "rent spontaneously"). Those vaguely Euro-looking white cubes in 10 U.S. cities? That's Car2Go, which Daimler launched in the U.S. in 2010.

As for Zipcar, Avis Budget Group bought it this year for $500 million.

If the corporatization of the car sharing world gives you hives, then RelayRides offers a slightly different model, on par with the apartment sharing company Airbnb. The Boston-orginated web service brokers an hourly or daily rate between private renters and private owners (who are rated by how quickly they respond to a request, how often, and user-reviews on vehicle reliability).

If there's one disadvantage, though, it's that you're driving someone's car—not a company car.

"Conceptually, I am all for a peer-to-peer rental and, environmentally, I'm for it," says Brown, "but, we have yet to see liability issues being fully tested."

Jarvis is just as cautious. "You really don't know what you'll get with a private car, and Zipcar provides vehicles in good condition that they maintain," she says.

Brown is optimistic that the field of car rental or sharing options will continue to grow. "I definitely see an industry shift to the blurring of lines between car sharing and traditional car rental," he says. "So, why make the delineation between the two? They can service an urban core as well as grow out of that core into automated, decentralized rentals beyond the city."

--Written by William Richards for MainStreet

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