What’s Ahead for Car Sharing?

What’s Ahead for Car Sharing?

          
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What’s Ahead for Car Sharing?

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  • Principles of the Sharing Economy

    The basic premise of the sharing economy is simple: everything—every product and every service—is sharable, for a price. The sharing economy addresses and meets the needs of both buyers and sellers. Those needs can be seen as the three core principles of the sharing model: value, coverage, and trust.

    • Value in the sharing economy takes shape along several dimensions. For example, sharing enables users to bypass the up-front investment in an asset or service as well as the greater costs that come with ownership. Instead, they pay for the asset or service only when it’s needed, and they can change the type of asset or service, or the timing of its use, whenever necessary. For a driver who needs a car infrequently and for short trips, the cost of renting for a few hours is significantly less than the total cost of ownership.
    • Coverage in the sharing economy refers to the geographical reach of a sharing service, its availability at a given time, and the ease of user access. Availability requires that car-sharing services have relatively large fleets on the road to handle times of peak demand. In some cities, that can pose problems. In London, for example, some services are available in only a few boroughs, because companies have to negotiate terms of service with each borough council individually.
    • Participants in the sharing economy must quickly build the trust and confidence necessary for transactions to move forward. In the business-to-consumer (B2C) car-sharing environment, trust is usually established by the brand and reputation of the service provider, which is most often an automotive OEM or a well-known car-rental company.