Car Sharing Gets Personal, With Private Vehicles for Hire

Last Updated Jul 2, 2010 4:38 PM EDT

California is close to revolutionizing the popular "car sharing" concept by empowering you, me and the neighbors to lend out our cars -- for pay. It has the potential to dramatically expand the whole concept, because every private car (at least in California) will be sharable.

The basic idea is that private car owners will make their cars (which, after all, sit idle on average more than 90 percent of the time) available to friends, neighbors or the wider public (their choice). They're reimbursed from $5 to $8 an hour for the time someone else is behind the wheel. Social networking, GPS and cell communications will hook people up with cars.

I think it's a fantastic idea, if all the liability and safety questions are settled. That's a significantly sized "if," of course. The concept, which is greatly aided by cutting-edge cell and GPS mobile technology services, could go viral -- and nationwide -- very quickly. To make it work, I think you need a strong central authority that would field a blanket insurance policy, as well as certify participating vehicles as safe for the road.

My guess is that most people won't be comfortable, at least at first, in letting just anyone drive their cars. They'll want to approve a list the same way they screen friends for Facebook. But that option is enshrined in a personal car-sharing plan being developed in California as a collaboration between City CarShare in San Francisco and Spride, a startup launched by clean-tech entrepreneur Sunil Paul.

A more informal method of personal car sharing could involve using Facebook or Twitter among a small group of friends to lend out vehicles. That form would leave the responsibility for the car (and what happens to it) on the owner.

But larger personal car sharing programs aren't viable, in California or anywhere else, without revising state insurance laws, and the existence of the City CarShare plan is pushing legislation forward. California AB 1871, which passed the state Assembly in June and awaits final Senate action in August, ensures that people who share their cars aren't penalized with the loss of their private insurance (they're covered by commercial policies instead). And the bill also holds owners harmless if their "working" car is in an accident.

The state law could be enacted as early as January 1, 2011. California legislative sources tell me on background that inspection of participating cars is not required in the bill, but is likely to happen anyway, because City CarShare would be liable from both a legal and insurance point of view should bad things happen.

It's quite likely that the California bill will pass -- it won a 10-0 vote in a Senate committee on Wednesday. Several other companies around the country (including RelayRides in Boston and Gettaround in San Francisco) and in Europe (Whipcar in London) also plan to introduce personal car sharing, and they're closely following the progress of the California law.

Traditional car sharing -- which also uses advanced telematics to hook members up with car fleets strategically located around the city -- is also on a roll. The biggest company in the U.S., Zipcar, has been expanding rapidly. In 2007, it acquired chief rival Flexcar, and last April for $50 million it took over the largest car-sharer in Britain, Streetcar. Hertz is also rapidly expanding its car sharing opportunities, including offering electric cars.

Automakers have also been getting directly involved in car sharing. In the spring, Daimler began offering its Car2Go service in Austin, Texas. It adds an innovation allowing members to drop off their cars anywhere in the central city (GPS ensures that Car2Go can find it). The service is expected to expand in both the U.S. and Europe soon.

Car sharing has definitely arrived, now it's time for it to get personal.


Photo: City CarShare