Car rental Is car sharing headed for the Big Time?

Hertz logo.jpg

Hertz, the worlds largest car rental firm announced on 16 December 2008 that it is entering the car sharing market with its new Connect by Hertz division.

The first cities served by Connect by Hertz are New York, London and Paris, with expansion to an additional 20 cities in North America and Europe planned for 2009 according to an article in the travel industry magazine Travel Weekly.

Why is Hertzs announcement significant?

With one exception, car sharing services have been small undertakings typically by non-profits or cooperatives. Up until Hertzs announcement, the only significant exception had been Zipcar, a for-profit car sharing enterprise with operations in a number of large cities and university locations.

Hertzs plunge into the fray signals the interest of the industry giant in having a slice of a growing market.

Car sharing and car rental have one thing in common: both offer short-term use of a vehicle that the driver does not own. Beyond that, they diverge significantly.

– Car rentals are normally for at least one day or longer, while car sharing can be for as little as one hour or up to one day, but seldom more than that
– Car rentals are mostly used by visitors to a city (especially at airport and rail station locations) whereas car sharing is normally used by local residents
– Car rental base rates do not include fuel and insurance while car sharing rates do
– Car rental companies do not require membership but car sharing services do
– Car rental companies have many vehicles available at a relatively small number of locations (airports, train stations, downtown and suburban), whereas car share services might be found throughout a city but with far fewer vehicles at each location (sometimes only one)
– Car rental companies are large, for-profit enterprises whereas car sharing enterprises can be either for-profit or non-profit

How does car sharing work? What follows is lifted from the Zipcar modus operandi.

Zipcar logo.jpg

– You become a member of the car sharing service
– You book on-line for the specific date and time, pick-up location and vehicle type
– Your go to the pick-up location where your membership card unlocks the car (and access to the keys)
– You drop off the car where you picked it up and your credit card is billed appropriately

A quick look at the How it works page at Connect by Hertz reveals the same kind of operation, as does Community Car, a small independent car share service in in Madison, Wis.

For other questions see Zipcars FAQs page. It’s quite comprehensive.

Car sharings appeal is obvious.

Love em or hate em, cars offer great convenience for moving people and goods. But theyre expensive to operate and for such a large capital investment too often just sit there doing nothing and going nowhere.

Many people living in large, dense cities such as New York and San Francisco choose not to own cars because it is very expensive to do so and often unnecessary due to extensive transit networks and the close proximity of work and play.

Plenty of other people in large cities and elsewhere don’t own one because of the impact on their financial health or because of their concern about the impact of ubiquitous ownership on the environmental health of the planet.

Still more people do own cars but have the occasional need for a different type of vehicle (e.g. a pick-up truck) on a very short-term basis.

Finally, university students (and some business people) have the need for quick use of a car without the hassles or expense of finding a place to keep the thing the rest of the time.

These are some of the key markets car sharing services are targeting.

For long-distance trips, a conventional car rental is likely to be the less costly choice since car sharing services usually have mileage charges beyond a certain free allowance and there isn’t a break for keeping the vehicle for periods longer than one day. You have to do the math to compare. Also car sharing services do not allow for one-way travel (pick-up one place, drop off in another).

But if you need a vehicle just a couple of times a month for local, short-term use then the cost and convenience of car sharing beats ownership and (usually) conventional car rental hands down. Remember, that gas and insurance are included, plus you don’t need to be concerned with owning or renting a garage to house the vehicle when it’s not in use.

Click here to take a look at the current Zipcar rates in San Francisco.

Now that Hertz is going to be competing in the car share business it will be interesting to see where prices go. In New York, Connect by Hertz will compete with Zipcar. When Connect by Hertz comes to San Francisco, theyll compete not only with Zipcar but also with City CarShare, a non-profit operating in both the city and the East Bay.

I can see an eventual blurring of the lines between car rentals and car share for some travelers, both business and leisure. In the past as a travel agent Ive seen people foolishly rent a car for an entire trip when they would have been far wiser to use taxis or transit to get from and to the airport, and then just drive a car for the short periods they really need one.

Perhaps in time Hertz will offer complimentary or reduced cost car sharing membership to its Hertz # 1 Club members. And with a large multi-city firm such as Hertz or Zipcar, a single membership will be all that is necessary in order to use car share services in different cities.

Would a car sharing service work in Chico?

Thats a good question which I cant answer but Id be curious to hear comments from local readers about that.

Its worth noting that both Zipcar and Hertz are aiming at cities and also specific universities. Zipcar has a headstart with service at over sixty universities including in the Golden State five U.C. campuses, plus USC and the University of San Diego.

Heres a complete list of cities and universities that have car sharing or where it is under development. Youll find a number that are in Chicos population range or smaller. (The list is from It also indicates which services are for-profit and which are non-profits.)

Also thanks to, I found a couple of excellent blogs about car sharing: Carsharing.US and CarSharing World. Carsharing.US is written by David Brooks, who founded Carsharing Portland in 1998, which ultimately became part of Zipcar.

Over the coming years it will be fascinating to see how large a share of the vehicle miles driven belong to the car share segment.

This entry was posted in Car rental. Bookmark the permalink.