Sales opportunity or ultimately a threat to automakers if personal vehicle ownership declines?
Both Ford Motor Company and General Motors have entered into their first car sharing deals, in what appears to be an industry that is about to grow rapidly in the U.S. after it was founded in Europe decades ago. Car sharing is in essence short term car rentals. A study from Frost & Sullivan projects car sharing will have an estimated 4.4 million users by 2016 with potentially hundreds of thousands of vehicles involved.
The two major social benefits of car sharing are said to be fewer vehicles on the road and lower emissions. Frost & Sullivan estimates that, on average, each shared vehicle replaced 15 personally owned vehicles in 2009, and car sharing members drove 31% less than when they owned a personal vehicle.
Ford is working with Zipcar to provide grants to university student organizations. Zipcar, which bills itself as the world’s leading car-sharing network, is now offering “Students with Drive,” a Ford grant program that provides students with free Zipcar memberships and driving credits to support their community service activities and student organizations.
General Motors is taking a different direction with Relay Rides, an online marketplace that allows vehicle owners to choose to rent their idle vehicles. The owner sets the rates and availability of the car. Relay Rides provides a $1 million insurance policy. GM vehicle owners with OnStar will be able to rent their idle cars through the Relay Rides marketplace starting in early 2012.
For vehicles that are not OnStar enabled, Relay Rides will install a small device in the car to provide convenient access to borrowers. The integration makes all eligible OnStar vehicles immediately “Relay Rides ready” without having to install additional hardware.
Founded in June 2010, Relay Rides is currently available in San Francisco and Boston, and plans to strategically expand to U.S. areas that demonstrate high consumer demand.
The program initially will promote the relationship through various events and demonstrations in California to showcase GM’s OnStar and Relay Rides technology, and will feature Chevrolet vehicles, including the Volt extended-range electric vehicle. Participation in the Relay Rides car sharing program is voluntary.
