Who would have thought that Bill Ford, the executive chairman of the Ford Motor Co., and GM Ventures, the venture capital arm of General Motors, would invest in peer-to-peer car sharing companies?
The big automakers historically craved market share, which means selling as many new cars as they can. If Americans decide that they don't need a car -- or maybe that they only need one, instead of two or three -- the car companies could be hurt.
But Bill Ford's Fontanalis Partners, a firm that invests in "the future of mobility," invested last month in a campus-based car sharing startup called Wheelz, and GM Ventures is backing RelayRides, another startup that announced Monday that it is rolling out its service nationally.
Maybe the peer-to-peer car sharing biz is going to be a big deal. Certainly it's revving up.
To learn a little about car sharing, I arranged to speak last week with Jeff Miller, the co-founder and CEO of Wheelz. Next week, I'll interview Shelby Clark, the founder and chief community officer of RelayRides, at VERGE DC, a conference organized by GreenBiz, where I'm a senior writer. (Please join us a VERGE DC if you can.) I'll also be interviewing Steve Case at VERGE; he's been an advocate for the sharing economy as an investor in Zipcar and in a vacation home-sharing company. [For more, see How Steve Case and his company are driving the sharing economy in The Atlantic and my own blogpost, The sharing economy and me.
Miller, who is 
33, co-founded Wheelz last year with Akhtar Jameel, who formerly ran R&D for Mercedes-Benz North America. The company said last month that it raised $13.7 million from Zipcar and Fontinalis Partners. It currently operates on two college campuses -- Stanford and Berkeley, with USC and UCLA coming soon -- and it wants to expand, as rapidly as possible. It's one of a slew of peer-to-peer car-sharing companies that want to scale up because, otherwise, they could be left in the dust.
That's because peer-to-peer car sharing is a business that will be shaped by the network effect -- that is, the business and its network will become more valuable and useful as more people participate. The network effect helped build eBay, Craigslist and, for that matter, Zipcar which has become the dominant car-sharing brand.
Unlike Zipcar, peer-to-peer sharing companies like Wheelz and RelayRides connect individual car owners with renters, who typically pay $5 to $10 an hour for a car. They rely on mobile and Internet platforms that manage reservations, provide insurance, make payments and use electronic and GPS technologies to make it possible for the renters to unlock (and then lock) cars. It sounds complicated, but it's not.
And as companies like RelayRides and Wheelz like to tell you, peer-to-peer car sharing solves a widespread problem -- some people want mobility without owning a car, while some owners of cars that site idle would like to earn extra income (sometimes thousands of dollars a year) by renting.
"Does it really makes sense that cars are parked for 23 hours a day?" Miller asks.
Next Page: How Wheelz and RelayRides are different from Zipcar
I can understand why peer to
I can understand why peer to peer car sharing can be a win-win situation for the car owner and for the person renting. The article points out some of the economical or practical reasons very well. And I think from a social stance it's really good as it increases mobility. I was also a student with no car and too few bucks to rent one. And I remember missing out on a lot of things because of that.
However I find it inaccurate to say "the environmental benefits of car sharing are obvious"....
Yes car sharing has a certain environmental benefit if and only if, several persons are in the car during the same ride.
Peer-to-peer car sharing is about different people riding separately in the same car. The effect of that is that you increase the usage of the car per day. More fuel burned and more emissions mean less environmental benefits. And then add to that the loss in fuel efficiency of public transportation means the people renting the P2P cars were normally taking before. There is some loss in environmental benefits coming from that.
I am pretty familiar with Life cycle assessment and from that perspective P2P car sharing has no actual environmental benefits since it does not reduce the cars on the road (rather the contrary) nor does it reduce the number of manufactured cars since its clients are people who cannot afford buying a car in the first place.
On the other hand I can see how, through a calculation artifice, a car manufacturer could claim that its environmental impact linked to manufacturing operations is decreased because it sells cars that are used for P2P sharing.
So P2P car sharing: socially super! Environmentally neutral at most.
One only needs to look at
One only needs to look at Kodak to see what happens if a company gets locked into the idea that their business model does not stretch beyond manufacturing a single product and then defend that market share to the death. Kodak's reluctance to cannibalise their film market with digital products opened the door for the rest of the market to eat their lunch, right in front of them!
Managing a car fleet might be a good move for improved product design.
Car sharing may appeal to a
Car sharing may appeal to a very small niche segment who can't afford a ride any other way, but it's just a dumb idea on so many levels. Why would I ever choose to allow a stranger to destroy my car for the pittance that I could earn from this? And why would I ever depend (reliability + safety) on a stranger to maintain and make their car available when I need it? This is the hole that Zipcar fills, by keeping inventory, managing the quality, ensuring sufficient availability, etc.
This is discussed in detail here, especially in the comments:
http://blog.getscaffold.com/roll-out-the-carsharing-roundup
It's all a little too idealistic if you ask me.