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The cost saving potential of carsharing in a US context

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Abstract

Carsharing is a vehicle sharing service for those with occasional need of private transportation. Transportation planners are beginning to see great potential for carsharing in helping to create a more diversified and sustainable transport system. While it has grown quickly in the US in recent years, it is still far from the level where it can deliver significant aggregate benefits. A key element to the potential growth of carsharing is its ability to provide cost savings to those who adopt it in favor of vehicle ownership. This research seeks to quantify these potential cost savings. The costs of carsharing and vehicle ownership are compared based on actual vehicle usage patterns from a large survey of San Francisco Bay Area residents. The results of this analysis show that a significant minority of Bay Area households own a vehicle with a usage pattern that carsharing could accommodate at a lower cost. Further research is required to indentify how these cost savings translate to the adoption of carsharing.

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Notes

  1. Depreciation costs depend on usage and are not entirely fixed. A heavily used vehicle will generally have a lower resale value than a less utilized vehicle of the same age and type. Nonetheless, depreciation will occur to some degree independent of usage.

  2. Even if parking is bundled with housing costs, there still might be a significant opportunity cost associated with residential parking. In other words, if there is a high demand for parking in the surrounding area, one should be able to rent their assigned parking space to the highest bidder. A scan of Craigslist indicates this type of informal market for parking spaces does exist in the more urban sections of the Bay Area.

  3. This survey was conducted by the Metropolitan Transportation Commission (MTC), which is the Bay Area’s metropolitan planning organization (MPO).

  4. According to City CarShare (2010), a minimum of 25 members living within 400 m of a pod are needed to justify a pod location. This can be achieved with 40 drivers per hectare if at least 2% of all drivers within 400 m join a carsharing program. As carsharing becomes a more recognizable option, a 2% penetration rate in the area immediately surrounding a pod should be obtainable.

  5. This is not unprecedented as there are several pod locations where City CarShare and Zipcar operate side by side.

  6. A tour is a series of trip segments that begin and end at a place of residence. A work tour includes at least one destination that is work-related.

  7. The value of time estimates provided by MTC are for in-vehicle travel time (MTC 1997). It is generally assumed that the value of out-of-vehicle time is double that of in-vehicle time (Small and Verhoef 2007). While there is no good data about the value of time for access trips to and from a carsharing pod, such trips squarely fit into the out-of-vehicle category. As such, the MTC estimates for in-vehicle time have been doubled for this analysis. They have also been adjusted for inflation to 2010 constant dollars.

  8. The carsharing fleets of City CarShare and Zipcar mostly include compact cars but they do provide some diversity of vehicle choice, including trucks and vans.

  9. Vehicle maintenance and registration have monetary costs that can be easily quantified and are accounted for in this analysis. However, independent of the monetary costs, these responsibilities can be a burden that some people might want to avoid.

  10. Based on “blue book” values for a 2007 Toyota Corolla, the resale price starts at $12,000 and decreases roughly $400 for every 10000 km of use.

  11. The AAA (2010) estimate for insurance is around $80 per month but California has higher than average insurance costs.

  12. One could easily find a vehicle priced below the $4,000 assumed in scenario 2. However, as the price of a vehicle falls below $4,000, its reliability and longevity can quickly decrease and the maintenance costs can quickly increase. Thus, purchasing something below this cost may be counterproductive from a long term cost perspective.

  13. The parking rates estimated by MTC are based on commercially operated parking facilities. These rates are used because there is no systematic information about residential parking rates. If residential parking is completely unbundled from housing costs, the residential parking rates should be roughly equivalent to the commercial rates. Even if parking is bundled with housing, MTC’s rates still effectively represent the opportunity cost of a residential parking space (as discussed in footnote 2).

  14. The cost estimates in Table 2 (and Table 3) assume that residential parking is free. In locations where residential parking can legitimately be added to the cost of vehicle ownership, carsharing will provide cost savings for a broader array of commute scenarios.

  15. The estimates presented in Table 2 assume that the vehicle in question is used only for commuting but, in reality, the vehicle will likely be used for some non-work tours as well. Consequently, the cost advantages of vehicle ownership are likely greater than what is demonstrated in the table.

  16. All of the subsequently cited percentages are calculated after applying the household expansion weights developed for the BATS by MTC.

  17. The other 25% were surveyed over a Friday/Saturday or Sunday/Monday. There were no BATS households that were surveyed over a Saturday/Sunday.

  18. For example, the average number of combined weekday tours is 5.40, the average number of combined weekend tours is 1.79 and the average for Monday/Tuesday (combined) is 2.15. Therefore, for a vehicle surveyed over a Monday/Tuesday period, the total weekday tours per week are estimated by multiplying the number of surveyed tours by 2.51 (5.40/2.15). Weekend tours are estimated by multiplying by 0.83 (1.79/2.15). Such calculations were repeated for all unique 2 day survey periods and for all relevant aspects of vehicle usage (i.e., tour frequency, miles traveled, and hours that the vehicle is away from home).

  19. For the most part, the only vehicles that can save more than $100 per month in this scenario are those that belong to households living in zones with high residential parking costs.

  20. In addition to travel diary information, the BATS includes a relatively standard set of demographic information. For each vehicle, the following information is provided: make, model, year of manufacture, year of first possession, and odometer reading at beginning and end of survey period. For households, the following information is provided: residential location, the number of individuals, number of workers, number of drivers, number of vehicles, owners or renters, income, and age, gender, and ethnicity of the householder. For each individual in the household, the following information is provided: age, gender, ethnicity, relation to householder, whether and how frequently he/she works, place of work, industry and occupation of work, whether he/she can drive.

  21. Even if a household does not have more cars than drivers, careful scheduling and carpooling may make some of its vehicles superfluous. However, it seems highly unlikely that a household that would go to such trouble would lack economic incentive to reduce vehicle costs.

  22. Since vehicle usage patterns are the key element in this exercise, ubiquitous access to a pod is assumed when making the cost comparison. Otherwise, pod access costs will obscure the influence of usage patterns.

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  1. Department of Geography and Earth Sciences, University of North Carolina at Charlotte, 9201 University City Blvd., Charlotte, NC, 28223, USA

    Michael Duncan

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Duncan, M. The cost saving potential of carsharing in a US context. Transportation 38, 363–382 (2011). https://doi.org/10.1007/s11116-010-9304-y

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