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Cat Boardman/Medill


Drivers switch gears from car ownership to sharing

by Cat Boardman
Jun 4, 2014


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Cat Boardman/Medill

Car sharing has reduced car sales by 500,000, according to Alix Partners. But some in the auto industry point out that loss is less than 10 percent of the 15.6 million vehicles sold last year alone.

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Cat Boardman/Medill

Sharing membership is expected to reach 26 million by 2020, up from 2.3 million last year, according to a study by market research group Frost & Sullivan.

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Kate Mitchell and Emily LeClair figured out how to save several hundred dollars a month by selling something each rarely used: their cars.

Mitchell, a 32-year-old Lakeview resident, saves about $600 driving Zipcars instead of her 2013 Honda Accord. LeClair, a 28-year-old who lives in Andersonville, uses RelayRides, a peer-to-peer sharing company, saving about $170 a month after selling her 1994 Buick Park Avenue.

“I think people are realizing that their car is something they can make money off of,” LeClair said. “People are realizing I don’t need to have one 365 days a year. I can just get one when I need one.”

More and more drivers like Mitchell and LeClair, both millennials, are switching from car owning to sharing, saving on expenses and hassle.

Worldwide car sharing membership is projected to grow to 26 million by 2020 from 2.3 million last year, according to market research firm Frost & Sullivan. Navigant Research predicts more conservative, but still rapid, growth of more than 12 million members by 2020.

While this is good news for car-sharing companies, it suggests that fewer people will be purchasing vehicles.

Each car shared means 32 fewer autos purchased, according to research firm Alix Partners. A joint Zipcar and the Washington, D.C.-based Transportation Research Board study states that each Zipcar takes 15 personally owned cars off the road. Alix Partners estimates that about 500,000 fewer car purchases have been made, and predicts that another 1.2 million will be avoided through 2020.

Joe Schwieterman, transportation expert at DePaul University, said this could mean trouble for automakers in the future.

“We have a sharing economy where everybody doesn’t need a set of wheels,” Schwieterman said. “That’s a game changer for auto ownership, and part of the reason car sharing is a bit of a threat to the car companies. I can tell you they’re looking quite nervously at this trend.”

Susan Shaheen, transportation researcher at the University of California, Berkeley, said car sharing could bring opportunities for automakers too.

“Many automakers are now looking at mobility services as a new market opportunity in which they touch the daily lives of their customers by providing a variety of vehicles in different settings to meet their mobility needs,” Shaheen said.

BMW and Daimler started car sharing services that recently rolled out in several U.S. cities and are looking to roll out elsewhere, and Toyota, Ford and Volkswagen are pioneering pilot programs in Japan and Europe.

However, most automakers haven’t caught on to the trend, and some observers think they won’t need to.

“By and large if you think about the numbers, I don’t think it’s necessarily driving Americans away from car dealerships,” said Joe Wiesenfelder, executive editor of Kicking Tires, the Cars.com blog. “I do think they’re still buying.”

Auto sales rose 11 percent in May, resuming the uptrend that was interrupted by severe winter weather in January and February. Sales rose 7.6 percent in 2013 to an annualized selling rate of 15.6 million, the best level since before the 2008 recession, as the economy and jobs market improved and consumers were able to upgrade their vehicles.