It is estimated that more than1.25 billion passenger cars are currently in operation worldwide, with an expectation for another billion light-duty vehicles to be added by 2050. With these figures in mind, the urgent need for an alternative solution to car ownership grows significantly every year.
Car sharing concept provides an alternative mobility solution. It means fewer cars on the roads, thus commuters can spend less time in traffic, less frustration and delays, and above all less carbon emissions. In the past few years, this concept has been growing in popularity as individuals and families reexamine their transportation needs with car ownership costs. Also, the implementation of strict environmental regulations to limit CO2 emissions in many countries, has led to adopting urban shared mobility solutions and driving the car-sharing market industry growth.
Defining the Concept
Car sharing, also known as peer-to-peer car sharing is normally accessible via a mobile app; drivers can choose and book a vehicle listed by a service provider or simply owned by an individual (Peer-to-Peer). It is primarily designed for a shorter time and shorter distance trips as an extension of the transportation network, providing a service intended to enhance mobility options. Users are digitally registered providing the necessary documentation and payment method. Once approved, registered user will be granted an automated access to on-site vehicles anytime.
Currently, there are three primary forms of car sharing:
- Free-floating Cars are parked randomly on local streets rather than at fixed stations and are located by potential users through GPS. These ‘free-floating’ operations require no prior reservation, and users are not required to register a return time when they take a car.
- Station-based Registered users can pick up a vehicle in the decentralized stations (with reserved parking spots).
- One way Customers can pick up a car at one station and return it to a different one.
Global market overview
Car sharing market is growing fast and with global market size surpassing 2 billion US dollars in 2020 and is anticipated to grow at over 20% CAGR from 2021 to 2027. It is predicted that by 2027 the growth will be at 6.5 billion US dollars.
Number of users for this form of mobility services is expected to amount to 60.5million users by 2026. User penetration is 0.6% in 2022 and is expected to hit 0.8% by 2026. The average revenue per user (ARPU) is expected to amount to US$244.90. It is also expected that 95% of total revenue will be generated through online sales by 2026.
The Growing Popularity
The top 5 countries to earn the most by car sharing are: the United States, China, the United Kingdom, Japan, and Italy.
The growing population in countries including China and India has resulted in overcrowding of transit facilities and rising pollution levels. This has encouraged people to shift to vehicle-sharing for their daily commute. Moreover, factors such as reduced travel costs and less congestion boost the regional market demand.
Many companies are this mobility option to provide pick-up and drop facilities to their employees. Business organizations are taking several initiatives to provide safety, comfort, and convenience to their employees.
Increased flexibility and customer convenience are the major factors augmenting the car-sharing market growth. This mobility option can be profitable, but there are factors that vehicle owners need to consider and account for. Maintenance costs will be higher due to the added mileage from renters. Additionally, insurance costs are likely to increase.
Europe and North America have strong regulations against carbon emissions. So car sharing is quite a famous way in these countries. In Germany, automobile OEMs are investing in the car-sharing market. The market is multiplying in China mainly. A highly populated country like India benefits from car sharing as they suffer from colossal traffic daily. Malaysia and Singapore are also in favor of car sharing.
Key Players in the Car Sharing Market
Prominent players in the car-sharing market include Turo, Inc., Car Next Door, ShareNow., Zipcar, Regina Car Share Co-operative, BlueSG, Mobility Sharing and Corporation, Lyft, Inc., Communauto Inc, Getaround, Inc., Hertz Corporation, .
- Zipcar is an American car-sharing company and a subsidiary of Avis Budget Group. Zipcar was one of the earliest companies to introduce this concept in 2000, and currently operates in more than 500 cities in the USA and globally.
- Share now is German carsharing company, formed from the merger of Car2Go and DriveNow. They are currently in 16 major cities in 8 countries in Europe.
- Turo is one of the largest peer-to-peer car sharing marketplace in the world, operating in more than 56 counties.
- Getaroud was founded in 2009 and operates in more than 950 cities worldwide.
- Enterprise Car share is based in the USA and operates in more than 130 university campuses, 40 dedicated government programs, and 500 business accounts in 35 U.S. States, Canada, and the U.K.
- Sixt Share Operates in Germany, France and the Netherlands.
