How to save some bucks through Car-Sharing Models


A common feature when one looks into how households allocate their income on a monthly basis is that a significantly large proportion of household income is being directed towards motor vehicle expenses. This is partly due to high car maintenance costs, insurance, parking, petrol, and licensing expenses. Ideally, a healthy budget should allocate about 35% of household income towards housing costs, living expenses 25%, motor vehicle 15%, savings 15% and debt 10%.  Households can save on motor vehicle-related expenses by exploring car share programs as viable alternatives to private car ownership. This concept encourages people to share trips together to reduce costs and optimize collective travelling. Some cities in emerging markets such as Brazil are already making use of car sharing as a means to curb congestion and air pollution.

How car sharing directly impacts your wallet

With car sharing, users avoid the need to purchase, park, insure and maintain a vehicle. The total cost of car ownership consists of variable costs (fuel and maintenance) as well as fixed costs (purchase price and insurance). Fixed costs constitute about 60% of the total costs, and are incurred regardless of how much a vehicle is used. Using car sharing instead of a private vehicle shifts the cost ratio towards variable costs. In this way, car sharing users can avoid the fixed costs of owning a car and access vehicles on a pay per use basis, which provides the opportunity to save money.

Zipcar Concept

In North America, most cities have a transportation plan that focuses around sustainability and using environmentally friendly modes to reduce emissions. Carsharing is part of a larger trend of shared mobility. Zipcar, for example, is one of the world’s leading car-sharing networks. It is a subsidiary of Avis Budget Group and today over a million people across 500+ cities and towns globally having access to over 12,000 Zipcars. Zipcar provides automobile reservations to its members, billable by the minute, hour or day; members may have to pay a monthly or annual membership fee in addition to car reservations charges. The main factors driving the growth of carsharing are the rising levels of congestion faced by city dwellers; shifting generational mind-sets about car ownership; the increasing costs of personal vehicle ownership; and a convergence of business models. Zipcar provides automobile reservations to its members, billable by the minute, hour or day; members may have to pay a monthly or annual membership fee in addition to car reservations charges. Generally, carsharing contributes to sustainable transport because it is a less car intensive means of urban transport.

Zip Cars – “Wheels when you want them”                  

Source: piggybankadvisor.com

The model. A car sharing service can be effectively formed by a group of 12 individuals coming together to share 3 or 4 vehicles, which they can rotate occasionally amongst themselves. According to The Economist, carsharing can reduce car ownership at an estimated rate of one rental car replacing 15 owned vehicles. Car-sharing presents a potential of sustainable urban mobility. However, for his model to work in Zimbabwe, city authorities will need to be ready to support the sharing culture so that this alternative to car ownership is successful. Another way to support this development would be by providing access to parking spaces for shared-cars.

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