How sharing cars can make cities more livable

Picture a city block. On one side, helmeted hordes whip on two wheels via a protected bike lane, some delivering flowers or sandwiches and others commuting with blazers tucked into baskets. On the other, restaurants spill into the street, tables wedged into curbside structures adorned with fairy lights. At each corner, signs indicate that the bus comes every 10 minutes, connecting the block to other, similar ones throughout the city. There’s one lane devoted to cars, mostly electric taxis, shuttling people around. Completely absent? Street parking.

This could be the block of the future if we choose to acknowledge — and address — the reality that we devote an astounding amount of space to personal vehicles that rarely get used. There are more than 286 million cars in the U.S., most of which are used only occasionally: 95% of the time, the average car sits unused in a garage or driveway, or at the curb. Not only is this economically inefficient — cars are among the most expensive things people own — but it also means that cities waste precious space on personal vehicles at the expense of quality of life and the planet.

One alternative? We share. The rise of car-sharing companies could allow us to get around freely while reinventing what we want the geography of urban America to look like, all while making a dent in carbon pollution.

Companies offering customers access to shared vehicles have proliferated in recent decades as technology has evolved; people can now set up an app, stroll up to a parked car, unlock it with their phone and pay only for the time they spend driving it. Some companies use their own fleets while others rely on peer-to-peer car-sharing. While car-sharing alone won’t solve climate change or make cities more livable, it could get us on those paths.

“We dream of, one day, car sharers outnumbering car owners in urban environments,” said Tracey Zhen, president of Zipcar, a car-share juggernaut that relies on a subscription model. “But I think it's going to take a long time. And it's going to take pretty bold and aggressive changes in policy, and disincentives to drive.”

Cars as a service, not an asset

At present, cars are a staple of daily urban life for many people in the U.S., offering both convenience and headache as parents cart children and groceries to and from home, at times circling the block for parking and paying hefty tolls. Car-sharing promises to offer the good without the bad.

Andrew Byrnes, deputy general counsel and global head of Public Affairs for peer-to-peer service Getaround, said that some of the company’s customers have their own cars and just need a specific kind of vehicle for a specific task, like, say, getting a pickup to lug a couch across town. But many other users integrate car-sharing into a life that is otherwise car-free. Depending on the day, they use public transit, or walk, bike, scoot and hail the occasional taxi to get where they need to go.

“That's the promise of the sharing economy more broadly,” said David Keith, a professor at MIT’s Sloan School of Management who has researched consumer behavior around car ownership. If a car — an “expensive and durable asset” — is shared between people, he said they “can consume it as a service rather than as a product.”

Zipcar relies on a subscription model that, Zhen said, fosters a sense of accountability that makes sure drivers treat the vehicles as well as they would their own car. That means keeping them clean and fueled and returning them on time so other users aren’t inconvenienced. (The company also charges fees if cars are left dirty or with an empty tank, so there’s a financial incentive to be a good user as well.) The company’s model of charging customers a monthly or yearly sum for access to the fleet, in addition to an hourly fee for car use, tends to keep customers locked into the service long term. That’s also helped Zipcar maintain steady cash flow during the early stages of the pandemic and accompanying downturn in demand.

Pandemic notwithstanding, interest in both subscription and non-subscription car-sharing has picked up over the years, especially as car-sharing companies have scaled up. Andrew Mok, the chief marketing officer for Turo, said two recent surveys have shown that roughly 13% of its current users do not currently own a car, and roughly 17% said they do not plan to purchase a car in the next five years, a fact he attributes in part to the high cost of vehicle ownership in certain cities.

“The pandemic has sort of accelerated all of these trends,” he added, which include the use of on-demand services, ecommerce and a general openness to try new business models.

While this benefits the car-sharing companies themselves in the short term, it also shows how quickly cities can morph. Research from BloombergNEF forecasts that the shared vehicle fleet in the U.S. — which includes taxis and ride-sharing vehicles — will reach over 70 million by 2040.

Zipcar, Getaround and Turo overlap in the cities where they operate, and each cited similar top markets: New York, Boston, San Francisco and other dense areas where both owning a vehicle is costly and other transport options abound. Cities, said Zhen, are where the “challenges of congestion and population density” are coming to a head, alongside the impulse for sustainability.

A boon for climate, held up by cultural inertia

“But how does this have any bearing on climate change?” you might ask, thinking of your own car sitting quietly in a garage, emitting no carbon between impromptu beach trips. You would be right, but the climate benefits of car-sharing are a lot more abstract than simply getting cars off the road.

Climate advocates talk a lot about upping public transit use to decarbonize the transportation sector more broadly, which was the biggest chunk of emissions in the U.S. for 2020. But moving away from a culture centered around car ownership more generally — even if they’re electric! — has important downstream effects as well.

“Studies have shown that car-sharing is sort of like a gateway to multimodal mobility,” said Getaround’s Byrnes. Once people move away from relying on their own car for everything, he said, they begin to be more intentional about which transportation options they use.

More public transit users and more bikers beget less congestion, while less need for parking begets denser housing closer to city centers, leading to even less car use. In essence, car-sharing has the potential to prompt a virtuous cycle. What’s not to love about a city with more options for fun, shopping and dining right at your fingertips? Yet these companies — and cities themselves — are being held hostage by policies that subsidize car ownership. In many cases, cities are even tying their own hands behind their back.

“We’ve given [away] all this great real estate in terms of roadways and parking spaces. It’s either free or it’s really cheap to drive into cities and to park,” said MIT’s Keith. “If we're really serious about this, we need to discourage the status quo so that people are motivated to try some of these new and innovative on-demand services.”

Policy options for doing so include congestion pricing, adding high-occupancy vehicle lanes and raising parking fees, while encouraging alternatives to driving like cheaper (or free!) public transportation and expanded and protected bike lanes. This can also come in the form of subsidizing central parking spots specifically for car-share vehicles, which many major cities in the U.S. have already done.

Meanwhile, third-party subscription services specifically for multimodal transport have begun to emerge. The Finnish startup MaaS Global, for instance, offers users access to buses, trains, taxis, bikes and even shared cars for a flat monthly fee that shifts depending on a user’s habits. Certain universities already have similar programs as well.

But Keith isn’t particularly optimistic. “I think we’re still a way off from demonstrating that those things are possible or viable,” he said, given that his research shows that there is value for many people in the mere act of owning a car, divorced from how much use it gets.

Policies that disincentivize car ownership are fairly common in Europe and elsewhere. But Keith said there is very little evidence that U.S. cities would actively try to make driving less attractive, calling it “a bit of third rail” politically. Part of this is simply that powerful people tend to have cars and therefore have a personal stake in keeping ownership costs down, though there is also the question of equity. Many low-income people live in transit deserts on the outskirts of town and have no choice but to drive to get to their jobs in the center. Is it fair to force a janitor with a two-hour commute into the Financial District to pay more for the privilege?

In New York, a congestion pricing plan is currently under a multiyear review after state lawmakers approved a controversial proposal to toll drivers entering parts of Manhattan during times of peak traffic. (However, there are some signs that tides may be shifting: A recent poll showed that more urban voters support than oppose congestion pricing.)

Zipcar’s Zhen, though, is more optimistic that we have the potential to change. The main barriers to car-sharing so far have been societal, she said. There are many cities in the U.S. that make life without a car virtually unnavigable, and they have intentionally been built that way because cars have been intrinsically linked to how we see ourselves.

“The American Dream is that you graduate from high school, you get your driver's license, you get a car,” she said. “And I think that the notion of the rite of passage of car ownership is really changing by generation. If you talk to the Gen Z … the notion of ownership is just not as important to them. Whether it's a house or music or clothes or cars, they’re happy to live in this pay-for-access economy for everything.”