How car-sharing will transform transportation

Editor's note: In this interview with Robin Chase, CEO of Buzzcar and former CEO of Zipcar, David Kiron explores the economic, environmental and social benefits of peer-to-peer car sharing.

Why Buzzcar? Why now?

The interesting thing about peer-to-peer car sharing is that it's an idea that's been around forever. When I was CEO at Zipcar, there was one guy who would send me two-page emails that just went on and on and on, saying, "Why are you using that crazy model? You should be using all the excess capacity that's all around. So many people have cars sitting in their driveways; why would you ever do it this way?"

This is a way to make car sharing happen everywhere, not just in dense urban areas and university towns. Zipcar established that people are willing to share cars. We now have established ways to trust other people through social networks, ratings and commentaries  all things that are key pieces of this business.

Car sharing is a win/win/win/win situation. There's no stakeholder for whom it's not a better situation, except for perhaps car manufacturers and car rental companies. I used to have a nightmare, a whole "Godfather" scenario  where I'm sleeping and the car rental companies are coming in with Uzis, and wake me up, pointing their guns at me.

What about the car companies? They are a huge employer in this country and elsewhere.

My last two years in France gave me the most delightful answer to that question. I took a tour of the Paris sewers. Paris is well-known for being one of the first European cities to drain sewage off of city streets. Before the sewers were built, there were 20,000 water carriers in the city. It was a significant piece of employment: carrying water in and gray water out.

As I was on the tour, I was thinking, are we honestly going to say that we wish that sewers and plumbing had never been invented, to maintain those 20,000 jobs? No. And that's what I think about car manufacturing.

I love the Paris example. So how do you see Zipcar and Buzzcar transforming the transportation sector?

A well-used shared car, by which I mean a shared car that is actually being driven most of the day, will be shared by 30 to 50 people. Imagine what happens when 40 percent of those people avoid owning a car altogether, or end up selling their own personal cars, because of Buzzcar's existence. As we move into the future, people won't be avoiding because they will never have bought one to begin with.

Today, each shared car replaces 15 to 20 cars because 40 percent of the members decide to sell or avoid buying a car. In dense urban areas, every car that exists requires three parking spaces: you need one for work, one for home and one for retail. Every car you take off the road, you're taking away the need for three parking spaces.

In terms of parking spaces, that's 450,000 parking spaces that did not need to be set aside in these urban areas. It equals 1.1 million metric tons of CO2 not put in the atmosphere, because people are not driving. And that is one week of New York City's CO2 output. One week that did not get put into the atmosphere because of Zipcar. So I'm proud of that. that we provide, as opposed to just giving away a bunch of money? Those are areas that actually build greater meaning.

This article is adapted from "'How Next-Gen Car Sharing Will Transform Transportation" by David Kiron, which was published Feb. 24 by MIT Sloan Management Review.

Copyright © Massachusetts Institute of Technology, 2013. All rights reserved.